Meeting healthcare needs in emerging markets
Half of the world's smokers and 75 percent of people with high blood pressure live in emerging economies, like Brazil, Russia, India and China. In the next decade, cancer rates are expected to climb 50 percent in emerging market countries, and the incidence of obesity and diabetes also will rise.
“You are going to see us shift our center of gravity toward some of the faster-growing markets, significantly expand the size of our sales forces and step up clinical development activities in an effort to take businesses already growing rapidly to even higher levels,”
says Joseph Jimenez, Head of the Pharmaceuticals Division and member of the Executive Committee of Novartis.
By 2020, Novartis projects that emerging markets will account for 20 percent of the company's total global prescription drug sales, an increase from 8 percent today.
Today, Novartis is working to address healthcare needs in emerging markets in several ways:
- In China, Novartis is building a biomedical research and development center that will focus on infectious causes of cancer that are endemic to Asia.
- In Brazil, Novartis is expanding production of active pharmaceutical ingredients, including a chemical precursor of Diovan, the world's top-selling blood pressure medication.
- In Central and Eastern Europe, Sandoz, the generic pharmaceuticals division of Novartis, is the leading generics company, providing access to affordable medicines.
Helping families stay healthy in India
A staggering 65 percent of India's population does not have access to medicine. Novartis is working to bridge this divide through an initiative called Arogya Parivar, which means "Healthy Family" in Sanskrit and combines healthcare education with the sales of affordable Novartis medicines.
The mainstay of the initiative is a team of 200 health advisors who visit rural villages, where 70 percent of India's population lives. These advisors often are the only people who talk with villagers about health issues and diseases such as tuberculosis, asthma and diabetes. Novartis trains these advisors, who are not Novartis employees, in health topics, public speaking and ethics.
Health advisors bring doctors to villages for periodic "health camps," which up to 2 000 villagers attend. Doctors treat those in need with prescription and over-the-counter medicines, which Novartis makes affordable with weekly treatment costs of USD 1.25 or less.
Building Russia’s top OTC business
Novartis has developed the number-one over-the-counter (OTC) business in Russia, delivering affordable medications to a growing number of consumers.
OTC medicines, from pain relievers to decongestants, are popular in Russia because they appeal not only to consumers seeking affordable treatments, but also to the country's growing, health-conscious middle class.
But according to Dionysios Bouzos, Region Head Russia/India/China for Novartis OTC, the success of Novartis OTC in Russia required a lot more than having products with wide appeal. He says the key factors to OTC success in Russia include:
- A comprehensive information system that tracks sales at more than 25 000 pharmacies, untangling underlying trends in this complex market
- Tenacious local management
- Strong brands
- The flexibility to respond quickly to rapidly changing market conditions
Novartis is looking to duplicate this approach in other emerging markets, and is planning to launch 40 more OTC products in Russia in the next three years.
Gathering strength in numbers
To help fulfill unmet medical needs in smaller emerging economies, Novartis has set up an organization called Group Emerging Markets. This organization pools resources from across Novartis divisions, making it possible for Novartis to invest in new markets and create affordable, innovative solutions to public health challenges.
This collaborative approach is being implemented in nine pilot countries, and is popular with key customers such as the King Hussein Medical Center in Amman, Jordan.
"Our needs extend far beyond oncology products to anti-infectives, painkillers and even simple OTC products," said Dr. Mahmoud Serhan, the medical center's Chief Executive Officer. "In our decision-making process, we prefer to deal with one face at a supplier. By combining the forces of all its divisions, Novartis has become an ideal partner."
The new approach is one of the models tailored to local conditions that Novartis is assessing to drive growth around the world. In 2008, aggregate year-on-year growth for Novartis in these pilot countries accelerated to 26 percent from 11 percent the previous year.