Januvia Success Story

8/2/2019 Januvia Success Story

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Launch Evolution AcrossPharmerging MarketsIMS LEAP STUDY 2010


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Headline

The dynamic, high-potential pharmerging

markets offer tremendous opportunities

for pharmaceutical manufacturers facing

mounting pressures in the mature

markets. But as more companies embrace

these new growth drivers in their long-

term strategic plans, they face the

challenge of a new and very different

environment for launching a global brand;

complex, demanding and changing fast.


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IMS HEALTH LAUNCH EVOLUTION ACROSS PHARMERGING MARKETS 1

IMS LEAP Study 2010Launch Evolution Across Pharmerging Markets

The dynamic, high-potential pharmerging markets offer

tremendous opportunities for pharmaceutical manufacturers facing

mounting pressures in the mature markets. But as more

companies embrace these new growth drivers in their long-term

strategic plans, they face the challenge of a new and very different

environment for launching a global brand; complex, demanding

and changing fast. What guidance can they draw from the historic

performance of previous launches in these markets? Where is the

greatest potential for product success today? And what does it

mean for the launch planning process at the global and local

levels? In a major analysis of launch evolution in pharmerging

markets, the IMS LEAP Study 2010 brings much-needed

answers to these important questions with unparalleled insights

into the key dynamics, developing trends, and changing drivers of

launch success.

Despite the global economic downturn, the paradigm shift

in pharmaceutical growth away from the established drivers

of old to a group of high-potential pharmerging markets

has continued to gather momentum. Collectively, the IMS

Tier 1, Tier 2 and Tier 3 pharmerging markets1 have been

steadily gaining share at the expense of the U.S. and top five

Europe (France, Germany, Italy, UK and Spain), accounting

for close to 34% of global growth in 2009 (Figure 1).

Traditionally, pharmerging markets have been something

of a postscript for global pharma, with many

multinationals preferentially launching in the major

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010(f) 2011(f) 2012(f) 2013(f) 2014(f)

Rest of World*Tier 3 PharmergingTier 2 PharmergingTier 1 Pharmerging

8% 13% 16% 19% 26% 20% 26% 41% 34% 41% 40% 52% 47% 49%

% Contribution from pharmerging (Tiers 1-3)

Source: IMS Health Market Prognosis March 2010. Market size rankings in constant US$. * ROW: includes mature markets and other non-pharmerging markets.

FIGURE 1: PHARMERGING MARKETS CONTRIBUTION TO GLOBAL GROWTH HAS STEADILY INCREASED

1. Pharmerging Shake-up, IMS Health, 2010. Tier 1 (China);Tier 2 (Brazil, Russia,India);Tier 3 (Venezuela, Poland, Argentina, Turkey, Mexico, Vietnam, S.Africa,Thailand, Indonesia, Romania, Egypt, Pakistan, Ukraine).


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2 IMS HEALTH LAUNCH EVOLUTION ACROSS PHARMERGING MARKETS

mature markets before even considering opportunities in

the emerging sector. Today, with eight pharmerging

countries among the top 20 world pharmaceutical

markets and China on the brink of achieving top three

status, (Figure 2), more companies are reassessing the

focus of their global launch plans.

Some of the worlds leading pharmaceutical

multinationals are already achieving more than a quarter

of their growth from the pharmerging markets; mosthave called them out as a key strategic priority; and all of

the top 15 players2 are accelerating efforts to strengthen

their presence within them either through research

investments, licensing deals, co-marketing arrangements,

buy-outs, or similar.

Among a flurry of recent announcements in this area are

Abbotts acquisition of Piramal Healthcare in India - a deal

that could make the U.S. giant the number one player in

this country; GSKs and Lillys commitment to double

revenue in emerging markets by 2015; Pfizers discount-

card system in Russia offering drug price cuts of up to

50%; and the purchase of Medley, Brazils third largest

pharmaceutical company, by Sanofi-Aventis, to name

but a few.But, as the launch environment has continued to evolve in

pharmerging markets, along with the competitor profile,

Tier 3 PharmergingTier 2 PharmergingTier 1 Pharmerging

2004 Rank 2009 Rank 2014(f) Rank1 United States 1 United States 1 United States

2 Japan 2 Japan 2 Japan

3 France 3 Germany 3 China

4 Germany 4 France 4 Germany

5 United Kingdom 5 China 5 France

6 Italy 6 Italy 6 Brazil

7 Spain 7 Spain 7 Italy

8 Canada 8 United Kingdom 8 Spain

9 China 9 Canada 9 United Kingdom

10 Mexico 10 Brazil 10 Canada11 Brazil 11 Russia 11 India

12 Australia 12 Mexico 12 Venezuela

13 South Korea 13 India 13 Russia

14 India 14 Turkey 14 South Korea

15 Netherlands 15 South Korea 15 Turkey

16 Turkey 16 Australia 16 Greece

17 Belgium 17 Greece 17 Australia

18 Greece 18 Venezuela 18 Poland

19 Russia 19 Poland 19 Mexico

20 Poland 20 Belgium 20 Netherlands

Source: IMS Health MIDAS, Market Prognosis March 2010; Market size ranking in constant US$.

FIGURE 2: THE PHARMERGING MARKETS ARE REDEFINING THE ESTABLISHED WORLD ORDER

2. Pharmaceutical companies with sales of more than US$15bn in 2009.


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have the rules for successful engagement also now

changed? What sort of launch trajectory can be expected

today? How much time do companies have to get it

right? And what does it all mean for their launch plans at

the global and local level?

A MAJOR LEAP FORWARD

To answer these important questions, IMS Health has

conducted a major study into the evolution of launch

performance across the pharmerging markets. Building

on the heritage of our groundbreaking research into the

elements of launch excellence across therapy areas in the

mature markets3, the IMS LEAP Study 2010 brings

unprecedented insights into the changing dynamics, key

drivers and evolving priorities for launch success in the

critical pharmerging sector.

In this first instance, we have focused on the IMS Tier 1

(China) and Tier 2 (Brazil, Russia, India) pharmerging

markets1 the four leading emerging economies in

terms of absolute GDP and anticipated pharmaceutical

market value growth through 2013 (however, this is not

to suggest that the opportunity is not just as favorable in

Tier 3 markets).

Drawing on gold standard, audited pharmaceutical sales

data from the IMS Health MIDAS database4, the study

evaluated over 260 NCEs and branded generics

launched into the Tier 1/Tier 2 pharmerging markets

since 1998 and which fulfilled the following key criteria:

Minimum global sales of US$250m and US$4m in

Tier 1/Tier 2 pharmerging markets in 2009

Launched in at least one Tier 1/Tier 2pharmerging market and one Top 8 mature market

The study considered only products first launched

globally post-1998; products launched globally

before this date but later on in pharmerging

markets have not been analyzed

For comparative purposes, products were segmented

according to their global launch date into three waves of

four years each:

Wave I: 1998-2001

Wave II: 2002-2005

Wave III: 2006-2009

The key findings that emerged from the study are

discussed in the following sections.

GROWING CONTRIBUTION OF LAUNCHES INPHARMERGING MARKETS

New launches are positioned to play an increasinglyimportant role in the expansion of pharmerging markets.

Products launched within the last four years (Wave III)

were responsible for 19.9% of sales in the Tier 1/Tier 2

pharmerging markets, compared to 15.5% in the Top 8

mature markets. They already account for an average 6.5%

share of growth in the sector (10.9% in China) versus

4.1% in the Top 8 mature a contribution that is set to

continue rising as more companies recognize the value of

these markets as a major source of revenue growth.

CLOSING TIME GAP

Positive developments in the pharmerging markets,

including greater government investment in healthcare,

rising demand for drugs to treat typically Western

diseases and a strengthening of regulatory and IP

requirements in some cases, have increased the ability

and willingness of multinational players to launch in

pharmerging markets. Many have been quickening the

pace at which they do so: for products already launched

in at least one mature and one Tier 1/Tier 2

pharmerging country (and which fit the study criteria),

our analysis reveals a halving in time to market between

first global launch and first launch in a pharmergingmarket over the last decade, from 2.5 years in Wave I to

1.25 years in Wave III (Figure 3).

Notwithstanding this finding, it is important to bear in

mind that our analysis considers only products that have

launched in at least one Tier 1/ Tier 2 pharmerging

market in addition to a mature market, and that overall,

only a third of all global NCEs introduced since 1998

have reached the former. Furthermore, in many cases

the first pharmerging launch is in Brazil and rarely in

the Tier 1 market China, where it can take two years

longer to register a product versus some of the mature

countries. However, the trend is clear: products are

launching earlier in pharmerging markets than they were

over a decade ago.

3. Defining Global Launch Excellence, IMS Health, 2007; Achieving Global Launch

Excellence, IMS Health, 2008 & Searching For Global Launch Excellence,IMS Health, 2009.

4. The IMS Health MIDAS database includes sales in audited pharmaceuticalsegments in more than 70 countries, amounting to over 94% of the globalpharmaceutical universe. Retail and hospital channels are included whereavailable. Data reported for India are derived from the Secondary Sales Audit (SSA)


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SHIFTING EMPHASIS TO SPECIALIST CARE

Not only are companies launching much sooner into the

pharmerging sector than they have done in the past (even

though no major product has yet launched earlier in a

pharmerging market), they are also changing the nature

of the drugs that they launch. The traditional strategy of

entering these markets with products focused mainly on

primary care is giving way to much stronger emphasis

on specialist launches5. Our study shows that specialist

products now account for 55% of launches in China,Brazil, Russia and India compared to only 47% in Wave I.

Furthermore, drugs in the specialist sector have

experienced the greatest reduction in time to market

versus those in primary care, with an average time lag of

only 1.5 years now compared to 3 years a decade ago.

The greatest decline overall can be seen among oral

anti-diabetics, which are now reaching the first Tier

1/Tier 2 pharmerging market on average 1 year after

first global launch compared to 3 years in Wave I; and

CNS drugs which have experienced a similar reduction

in time to market. The fastest pharmerging Tier 1/Tier 2launches in these therapy areas have been MSDs Januvia

(sitagliptin) in Brazil and J&Js Invega (paliperidone) in

Russia - only 2 and 3 quarters, respectively, following

the first global launch.

Overall, we believe this to be a function of improving

infrastructure, selective company strategies and the

opening up the regulatory environments.

CHANGING RULES FOR INNOVATIVE DRUGS

To better understand these findings and determine what

kind of launch investment has the greatest potential to

positively impact the pharmerging markets, we

considered therapy classes according to type, using an

IMS segmentation6 based on the level of patent

protection and an objective measure of innovation to

come up with three key market segments:

1. DIFFERENTIATED: Classes characterized by significant

product innovation. There are often no generics

available and payers exert little influence on treatment

decisions.

2. COMMODITY: Classes with products that are minimally

differentiated, other than by price. Payers, potentially,

have a great stake in prescribing decisions.

Wave IIIWave IIWave I

Pharmerging Tiers 1-2

Average number of quarters delay in first pharmerging Tier 1/2 launch vs. first global launch

Primary Care

Specialist Care

Oral Anti-diabetics

CNS drugs

10

9

7

5

12

8

6

12

5

4

11

4

3

8

5

Source: IMS Health MIDAS 2009

FIGURE 3: THE TIME TO FIRST LAUNCH IN A TIER 1/TIER 2 PHARMERGING MARKET HAS HALVEDIN THE LAST DECADE

5. IMS Health definition based on positioning of dynamic market in terms ofprimary care vs specialist physicians6. Understanding New Commercial Models in the Pharmaceutical Industry, IMSHealth Special Report, 2009. Segmentation covers Top 8 markets (U.S., Japan,France, Germany, U.K., Italy, Spain and Canada).


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3. TRANSITIONAL: Classes that fall between the above two

extremes and are likely to undergo significant change.

When time to market is considered within the context

of these three market segments, it can be seen that the

largest reduction in time to market is apparent in the

differentiated category, i.e. products associated with a

high degree of innovation (Figure 4).

The traditional perception of pharmerging markets as

home to tail-end, typically commoditized products, thus

appears to be changing, reflecting improvements in

access to healthcare, rising demand for innovative

medicines, a growing, more affluent middle class with

greater purchasing power, and broader public and private

healthcare coverage. These markets may still represent

largely lower-cost bases with continued relevance for

low price primary care products, but government

programs and healthcare initiatives are clearly opening

up new opportunities for companies to increasingly

deploy their specialist and differentiated portfolios.

VARIABLE UPTAKE

Despite sharing many similar characteristics, there are

significant distinctions both within and across the

pharmerging markets that clearly set these markets apart

both from each other and from mature markets - in the

way they are structured, the way they operate and in the

various hurdles to market access they present. These

differences are manifested in highly variable uptake curves

within the countries studied, compared to those observed

in mature markets (Figure 5).

Products launched in India, for example, tend to follow a

shallow uptake curve that plateaus quite quickly. Here,

faster genericization due to poor IP protection and a

strong presence of local players has created a fragmented

market where a high share is difficult to achieve.

Conversely, in Brazil - where launches are often linked

with U.S. market entry - rates of uptake are more in line

with those of the mature markets in terms of the higher

share that products can expect to achieve within their

given therapeutic area. It is important to note that

Brazil has included many innovative drugs in its

reimbursement list.

Wave IIIWave IIWave I

Average number of quarters delay in first pharmerging Tier 1/2 launch vs. first global launch

Differentiated

Transitional Commodity

9

8

5

11

10

7

8

5

6

Source: IMS Health MIDAS 2009

FIGURE 4: THE BIGGEST DECLINE IN TIME TO MARKET CAN BE SEEN IN DIFFERENTIATED SEGMENTS


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Wave IIIWave I

% of product launches able to improve their

performance by at least 1 decile 6 months after launch

RussiaBrazil IndiaTier 1/2 China

Source: IMS Health MIDAS 2009, in constant US $

16.1

11.0

16.5

13.0

10.4

8.3

20.9

11.1

18.2

12.5

20%

Overall, fewer than 20% of launches see significant changes

to their launch trajectories after these first, critical six months.

This window of opportunity is also apparent in the

pharmerging markets, where, again, the success (or

otherwise) of a launch can largely be determined within

the first six months: in Wave I, only 16% of brands were

able to improve on their initial launch trajectory

(defined as moving up at least one decile six months

after launch) (Figure 7).

Moreover, it appears that opportunities for a second

chance are becoming more scarce: in Wave III only

11.0% of Tier 1/2 brands showed an improvement after

the first six months, suggesting a toughening ofconditions in these markets. While common to all four

countries, this decline was greatest in Russia.


CommodityTransitionalDifferentiated

Mature Markets

Average country launch uptake curves by market segment

0 1 2 3 4 5 6 7 8 9 10 11 12

40

30

20

10

0

China

Quarter After Launch

%V

alueMark

etShare

%V

alueMark

etShare

%V

akueMarket

Share



0 1 2 3 4 5 6 7 8 9 10 11 12

40

30

20

10

0

Brazil

0 1 2 3 4 5 6 7 8 9 10 11 12

40

30

20

10

0

Companies have a higher chance of successin launching a differentiated product in

pharmerging (even steeper & deeper curvesvs. mature markets); conversely, commod-itized & transitional products fare worse

FIGURE 6: VARIATIONS ARE ALSO APPARENT IN THE BEHAVIOUR OF DIFFERENTIATED AND COMMODITIZEDPRODUCTS VERSUS THE MATURE MARKETS

FIGURE 7: THE SIX-MONTH WINDOW OF

OPPORTUNITY EXISTS IN PHARMERGING MARKETS

Source: IMS Health 2009, in constant US $


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WHAT DOES THIS MEAN FOR THE PHARMACEUTICAL

INDUSTRY?

One clear, overriding conclusion from our analysis isthat the rules of the launch game in pharmergingmarkets have changed. As companies press ahead withtheir plans to drive growth in this critical sector, theability to adapt to a fundamental shift in the launchenvironment with well-planned, fully-integrated

strategies for market entry, will be essential for theirlong-term success. Four key considerations should beplaced at the forefront of their decision making:

1. LAUNCH EARLIER IN PHARMERGING MARKETS - POTENTIALLY

AHEAD OF MATURE

With a clear trend towards faster launch into China,Brazil, Russia and India, the imperative to addressthese key growth markets during the creation ofinitial global launch plans is critical - the long-timestrategy of focusing first and foremost on the majormature markets no longer holds good.

Global players that do not extend their drugdevelopment and launch planning to include early andthorough consideration of opportunities in the Tier1/Tier 2 pharmerging markets run the risk of leavingsignificant untapped revenue potential on the table. Incertain cases, companies should even considerlaunching earlier in pharmerging than in maturemarkets: some branded generics may encounter moreattractive markets in the pharmerging sector; evencertain innovative products may be able to capitalizeon greater growth potential and tap into anunsaturated market early on, creating the chance to

achieve higher market share a challenge that isbecoming increasingly difficult in mature markets3.

This will call for a rebalancing and restructuring ofglobal launch plans to address many newconsiderations over and above those required for atraditional focus on the U.S., Top 5 Europe and Japan.The impact goes beyond the commercial organizations:R&D need to understand the requirements for launchin pharmerging markets and build capabilities toleverage the opportunity; corporate functions,including regulatory affairs, must develop a clear

understanding of market access requirements inpharmerging countries; and local organizations needto power up their operations to meet the demands ofthis new agenda.

2. DONT UNDERESTIMATE THE POTENTIAL FOR INNOVATIVE LAUNCHES

Behind the greater variation in the pattern of uptakein the pharmerging markets is the higher probabilityof gaining significant market share when launchingdifferentiated products rather than those incommoditized or transitional therapy areas.

Our findings suggest that it is possible to achieve highermarket share with an innovative product in pharmergingmarkets in differentiated therapy areas. With strong and

continued investment in market conditioning, companiesmay thus have a greater chance of establishing aleadership position than they would in saturated maturemarkets. All Tier 1/Tier 2 pharmerging markets havestated plans to extend their coverage, either of thepopulation or of the number of drugs reimbursed.Countries like Brazil, which already boasts highcoverage of its population, plans to increase the numberof drugs covered, with particular emphasis on innovativedrugs (the plan is to increase the number of innovativemolecules reimbursed from 107 to 144 by the end of2010), while other countries will focus on extending

population cover with more commoditized drugs. It istherefore imperative that the opportunity for innovativedrugs is assessed at a country-by-country level, and thatthis knowledge is used to focus on understanding howto optimize the value of their portfolio and developstrategies that better support the high growth opportunities.

3. PLAN TO MAXIMIZE THE 6-MONTH LAUNCH WINDOW

The extreme importance of the first six monthsmeans that strategies for launching into thepharmerging markets must be built well in advancewith careful planning of pre-launch activities toensure optimal readiness across all relevant functions.

New capabilities and commercial models may berequired to penetrate high growth segments, and earlyestablishment of KPIs will be essential to measuringinitial performance against plans. Paramount will begreater and earlier investment in launch preparation atboth an international and local level.

A compelling example of planning ahead is thelaunch of BMS Hepatitis-B product Baraclude inChina7. 18 months prior to expected approval, BMScarried out detailed pre-launch market research andstarted building the required infrastructure, including alarge and well-trained sales force to help educate

physicians. Full alignment across global, regional andlocal entities allowed BMS to achieve a truly excellentlaunch that not only became market leader (c.20% share


7. Sowing the Seeds of a Blockbuster Launch in China, IMS Health, 2009


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of the whole Hepatitis antiviral market) but also managedto grow the overall Hepatitis-B market in China.

4. ADDRESS THE COMPLEXITIES

The highly variable uptake of launches within therapyareas across the Tier 1/Tier 2 pharmerging countriesunderscores the extremely diverse nature of thesemarkets and the very different patterns of behaviourthat they display. And while healthcare reforms may becreating new opportunities, they are also shaping a

launch environment that is becoming increasinglyfragmented. Companies need to understand thedifferences, navigate the complexities and tailor theirapproaches accordingly. Strategies must be adapted tothe specific requirements of each individual countryin terms of portfolio, commercial models, businessmodel, systems, structure, and people, with earlyattention to such key issues as:

AFFORDABILITY: With generally lower levels of incomeand greater emphasis on out-of-pocket or privatepayment for healthcare, affordability is an importantconsideration for launching in pharmerging markets.

Many multinational companies are implementingdiscounted price schemes to overcome this potentialhurdle. At the same time, our analysis has shown thatwhile many transitional and commodity products aresubstantially cheaper than in the mature markets,differentiated products appear able to still commanda premium price. These factors should be taken intoaccount when sizing market potential and pricingnew brands.

ACCESS: Healthcare access can be a challenge forpopulations living outside the major cities inpharmerging markets. Companies that are able to

successfully penetrate more rural areas may benefitsignificantly from being first to market in tapping thepotential of large, under-treated populations.Novartis and Sanofi-Aventis, for example, haveworked to promote healthcare access in rural Indiaover the past few years to extend their patientoutreach, alongside a $19.5bn government programto improve healthcare for over 700m Indian villagers.However, targeting rural areas may not be theoptimal approach for all products, particularly in thedifferentiated/premium segment where affordabilityand access to specialist care will become an issue(examples of both approaches illustrated in

Diabetes: A Case in Point on page 10).

LOCAL NUANCES: In addition to fulfilling global launchrequirements, companies must adapt their approachto the market conditions of each individual country

and use their knowledge of the anticipated launchtrajectory to ensure an early focus on the segmentsof greatest potential. It is important to rememberthat many therapy areas are under-developed inthese countries, and simply launching a first-to-market product will be no guarantee of success,even in the face of seemingly considerable patientpotential. In many cases, upfront investment inmarket conditioning and a continuing focus onphysician and patient education will be key. In allcases, it will be important to ensure that the criticalquestions for a successful launch have beenaddressed. For example: Have you built acomprehensive plan for city/rural rollout? Are youprepared with the right distribution strategy?

THE FUTURE MODEL?

The Tier 1/Tier 2 pharmerging markets offer majoropportunities for launching new drugs and more globalplayers are shaping their long-term strategies to secure aslice of the rapidly expanding pie. As they do so, theywill need to be extremely clear about their approach to

driving a successful launch. Faced with the challengesand complexities of the changing landscape, thedecisions they make on the right portfolio for thesehigh growth markets must be determined not on thebasis of todays environment but in anticipation of theone to come. At an international level, early integrationof pharmerging markets into global launch plans will becritical, based on a detailed understanding of how tomaximize the opportunities within them. Locally,success will be dependent on appropriate adaptation ofthe full pre-launch strategy.

Our study has revealed four key considerations for

companies in search of a successful launch in theTier1/Tier 2 pharmerging markets:

1. Launch earlier in pharmerging markets -

potentially ahead of mature

2. Dont underestimate the potential for innovative

launches

3. Plan to maximize the 6-month launch window

4. Address the complexities

As conditions continue to toughen in the maturemarkets, optimizing performance in the pharmergingsector will be increasingly important for global successand sustainable competitive edge. Companies planningtheir global launch strategies with an eye on maximizinggrowth must do so in the knowledge that pharmergingmarkets are now an essential front-end priority not anoptional late-stage reserve.



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Diabetes is today one of the worlds most challenging

and costly healthcare problems. A major cause of

premature illness and mortality, it is growing to

pandemic proportions and is one of several chronic

diseases called out by the WHO for global action. Of

particular concern is the rise in Type 2 diabetes.

Traditionally a disorder of the middle-aged and

elderly, this is now affecting people at a much younger

age. It is also becoming increasingly common inrapidly developing economies, particularly China and

India, fuelled by the combined effect of mass

urbanization, increasingly Westernized diets and a

general decrease in levels of physical activity. At the

same time, additional risks, epitomized by the global

rise of overweight and obesity, have become more

prominent.

EARLIER ENTRY, STRONGER COMPETITION

In response to the increased significance of diabetes in

developing countries, a large number of global anti-

diabetics have been launched into the Tier 1/Tier 2

pharmerging markets. The picture is broadly similar to

the mature markets we saw twelve years ago, but

includes several innovative product classes (GLP-1s

and DPP-IVs), higher share of insulins, slightly lower

share of traditional products and very low share of

glitazones (Figure 9). Overall, competition is

increasing and the launch space is changing fast as

more multinationals include these markets at an earlier

stage in their global launch plans.

Of all the leading therapy areas, the newer generationanti-diabetes sector8 has experienced one of the

largest reductions in time to market from global to

pharmerging launch (in China): in Wave I, Actos

(pioglitazone) was on the global market for approx

5.75 years prior to its first pharmerging launch; in

Wave III, Januvia (sitagliptin) was launched (in Brazil)

just 6 months after its first global entry.

STUDIES IN STRATEGIC PLANNING

The importance of achieving the steepest and deepestmarket penetration curve possible within the six-

month window of each country places heavy

demands on the planning and execution of every

launch. Two recent examples in the diabetes area

illustrate the power of an informed, fully-integrated

strategic plan in achieving this goal, albeit by taking a

different approach to the market:

TARGETED, PREMIUM, DIFFERENTIATED APPROACH IN THE

INDIAN MARKET:

One of the greatest pharmaceutical success stories

in Indias recent history, is the game-changing

launch of Januvia/Janumet (sitagliptin) that

revolutionized the local, low-cost diabetes market

with a premium price approximately five times

greater than that of alternative new-generation

anti-diabetics.8

Success was gained through the relentless pursuit of

a focused scientific promotional strategy that was

based on a highly targeted approach leveraging

in-depth knowledge of the Indian market.

By positioning the product with targeteddoctors/diabetologists in specified geographical


Diabetes: A case in point

100%

Traditional

anti-diabetics

Glitazones

DPP-IVs

and GLP-1s

Insulins

Source: IMS Health MIDAS 2009, in constant US $

5%

8%

17%

24%

14%

50%

14%

45%

35%

46%41%

Pharmerging(Today)

Developed(Today)

Developed(12 yrs ago)

FIGURE 8: VALUE SHARE OF DIABETES BYTREATMENT TYPE

8. Defined as glitazones, DPP-IVs, GLP-1s


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areas the company ensured that marketing efforts

were directed at high ROI segments while

competitors continued employing a mass market

approach. With an accompanying integrated disease

management program strengthening the value

proposition and an external strategy of pricing

Januvia at c.25% of the average price in the Top 8

mature markets (high for India), the Januvia

franchise currently boasts a 10.4% share (in quarter1 2010) among the new-generation anti-diabetics8

in just over a year since launch, compared to only

1.3% share for a key competitor (in the same time-

period) which discounted its price to as low as 7%

of the price in mature markets. In addition, the

drug also benefited from Indias recently improved

IP protection laws, which is creating an increasingly

favorable environment for innovative launches.

MARKET CONDITIONING ACROSS PHARMERGING COUNTRIES:

An alternative, but equally successful approach by

Novo Nordisk has focused on more of a blanketstrategy, mostly in commoditized segments in

diabetes (e.g. insulins, biguanides) to get access to

the vast Tier 1/ Tier 2 market populations.

Successful players have launched their entire

diabetes portfolio in emerging markets, offering a

wide range of product options, building strong

physician loyalty with heavy emphasis on education

and promotion, and successfully targeting and

penetrating areas beyond the large urban centers.

Spurred by first mover advantage and continuing

high investment, the company has established an

exceptional reputation in the diabetes arena in such

pharmerging markets as China, where it hassecured a high market share within some of the

countrys more remote regions, and in India and

Russia, where it has achieved major reach with

physician and patient disease awareness programs

including a diabetes bus and mobile test centers

(in Russia).

Conversely, lack of investment has reaped poor

rewards for some companies. For one major player

in the newer generation sector8, a high turnover of

reps and middle management, lack of continuity,

limited attempts at trust-building and nocommitment to continuous investment resulted in

recourse to a co-promotional deal in China and a

low position/success despite the product being

highly successful in mature markets.



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KEY FINDINGS

CLOSING TIME GAP: For drugs launched in at least one

pharmerging country, the time lag between first

global launch and the first entry into a pharmerging

market has halved in the past decade, from 2.5 years

to 1.25 years. Although the first launch country

continues to be Brazil in many cases, the other Tier

1/Tier 2 pharmerging markets are also now rising to

the forefront. The decline is greatest for specialist-driven and differentiated products and for the key

areas of oral anti-diabetics and CNS drugs. With

more companies quickening the pace of their

outreach to the pharmerging sector, the need to

reprioritze these markets in global launch strategies is

more important than ever. Those that fail to do so

run the risk of leaving significant untapped revenue

potential on the table.

CHANGING RULES: There is a noticeable and higher

variation in average launch uptake among the

different pharmerging markets studied compared to

the rates observed in the mature markets. Launches in

India typically follow a very shallow uptake curve;

those in Brazil are more typically in line with average

uptake in the mature markets. Companies looking to

expand in the pharmerging sector must focus on

understanding how to optimize the value of their

portfolio within the context of these variable patterns

and invest in market conditioning.

Differentiated products have a greater chance of

achieving higher market share in China and Brazil,the two largest pharmerging markets, than in mature

therefore it may be easier for companies to establish

leadership positions in these unsaturated markets.

Conversely, the potential benefit from launching a

transitional product in some therapy areas is more

limited than in mature and the dynamics at launch

appear more in line with commoditized products.

NARROW WINDOW: Fewer than 20% of launches in the

pharmerging markets are able to significantly improve

their launch trajectory after six months a finding

that is consistent with the Top 8 mature markets3. It

appears hardest to do so in Brazil, where less than

10% of Wave III launches were able to improve on

their initial uptake compared to 17.6% in India. Steep

and rapid penetration of the pharmerging markets is

therefore essential. With such a narrow windowavailable for launches to make their mark, the

imperative for early and full launch preparation -

including contingency planning and the establishment

of KPIs is greater than ever.

It is becoming increasingly apparent that companies

need to conquer the pharmerging markets if they

want to succeed globally. The findings of the IMS

LEAP 2010 Study point to four key implications for

the pharma industry to do this successfully:

1. Launch earlier in pharmerging markets -potentially ahead of mature

2. Dont underestimate the potential forinnovative launches

3. Plan to maximize the 6-monthlaunch window

4. Address the complexities

FOR FURTHER DETAILS ON THIS STUDY 2010AND HOW THIS AFFECTS YOUR BUSINESS,

PLEASE CONTACT:

Yosh Tarapore, Thought Leadership, IMS Health

[email protected]

Eva Casal, Management Consulting, IMS Health

[email protected]

David Campbell, Global Lead Pharmerging Markets,

IMS Health [email protected]


The IMS LEAP Study 2010


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HeadlineABOUT IMS

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market intelligence products and services that are

integral to clients day-to-day operations, including

product and portfolio management capabilities;

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consumer health offerings; and consulting and services

solutions that improve productivity and the delivery of

quality healthcare worldwide. Additional information is

available at http://www.imshealth.com

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Tel: 81 03 5425 9000

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