Why drug companies are betting big on ‘pharmerging’ countries


So-called pharmerging nations–developing countries where use of pharmaceuticals is growing rapidly–are expected to see the fastest growth in total drug spending over the next three years, making them attractive targets for drug makers. But, big pharma beware: Pharmerging nations’ reliance on lower-cost generics will make it a tricky opportunity to play.

Demand for drugs in pharmerging markets will expand at a compound annual growth rate of as much as 11% through 2018, according to a recent report by the IMS Institute for Healthcare Informatics. While that would be a slight slowdown from the past five years, it’s vastly faster than growth across the major markets in Europe and Japan, where growth is expected to be flat and up to 4%, respectively. Pharmerging markets will account for nearly 50% of absolute growth in drug spending in 2018.

These sweeping trends have grabbed drugmakers’ attention, and many of them are already…

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