Drug companies enter Indonesia and the Philippines
For Immediate Release.
Melbourne, 18th February, 2010 - An increasing number of Pharmaceutical (Pharma) companies are targeting emerging markets. Indonesia and the Philippines are starting to gain considerable attention thanks to their burgeoning healthcare systems. A recent report* by independent market analyst Datamonitor shows that Pharma's interest in Indonesia and the Philippines will rise as both are currently reforming and expanding their respective healthcare systems.
INDONESIA: an attractive market in the long term
Indonesia is the fourth most populated country in the world and therefore has a large patient population. The introduction of a full universal health insurance is a much-needed step to increase access to healthcare, given that only 26% of the Indonesians are covered by health insurance and the fact that they often find medications to be unaffordable. This is one of the primary aims of the government, which targets to cover all its citizens by 2013. However, given the large size of its population and the low current coverage, opportunities for the Pharma industry will likely only be seen in the long run.
In the absence of a true universal healthcare, Indonesians without coverage opt for cheaper drugs, namely branded generics that are usually produced by the local industry. "The market remains dominated by branded generics despite the availability of even cheaper unbranded generics, indicating a huge market potential for Big Pharma as Indonesians seem to be willing to pay more for a reputed brand" says Maura Musciacco, healthcare analyst at Datamonitor.
THE PHILLIPINES: beneficial in the short term
Reforms of the universal health insurance system have made greater headway in the Philippines, with 78% of the population covered. This, in combination with dominance of more expensive branded drugs over cheap generics, generated a market valued double that of Indonesia's in 2008, with sales of $2.1 billion.
"The prices of medicines in the Philippines are some of the highest in the region, ranking second to Japan. With 14% of the Filipino population living below the poverty line of $1 per day-double that of Indonesia-this makes patient access a major challenge" comments Musciacco based in London.
Due to the mounting need to make drugs both accessible and affordable, the government has taken strong measures likely to create a challenging environment for foreign companies. In mid-2009, the government imposed 50% price cuts on 21 essential drugs, which will certainly impact sales for these companies going forward.
Enter with caution
Multinational players have garnered considerably higher sales and faster growth rates in the Philippines reflecting the country's more fertile market for foreign companies. Going forward, however, branded Pharma will find the Philippines to be more challenging given it is shifting towards a generics-based market. In the long run, Indonesia will offer a larger market where multinationals can better position its high-value drugs due to a more Western disease pattern.
Notes for editors
* Datamonitor's Emerging Markets Series: Indonesia and the Philippines - Opportunities for multinational pharmaceutical players, October 2009, DMHC2562
Datamonitor's Emerging Markets Series: Indonesia and the Philippines report provides a comparative overview of recent events affecting the macroeconomic and pharmaceutical landscape in Indonesia and the Philippines. It also examines different drivers and resistors for growth in these markets and analyzes the growth drivers of multinational and domestic players operating in here.
Ms Maura Musciacco, Datamonitor analyst and report author, is available for comment.
To arrange and interview or for further details regarding this report, please contact Delphine Jersier in Datamonitor's Melbourne office on +61 3 9601 6725, or email [email protected]
For London, please contact Mary Vingoe on +44 (0)161 238 4082 or [email protected]
For US, please contact Alan Sott on +1 570 687 9315 or [email protected]
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Datamonitor is the world's leading provider of online data, analytic and forecasting platforms for key vertical sectors. We help our clients, 5,000 of the world's leading companies profit from better, more timely decisions. Through our proprietary databases and wealth of expertise, we provide clients with unbiased expert analysis and in-depth forecasts for seven industry sectors: Automotive & Logistics, Consumer Markets, Energy, Financial Services, Healthcare, Retail and Technology. Datamonitor maintains its headquarters in London and has regional offices in New York, San Francisco, Dubai and Sydney. See www.datamonitor.com for further details.
Drug companies enter Indonesia and the Philippines