Access Trends in Emerging Markets

Access Trends in Emerging Markets

  • February 2019 •
  • 156 pages •
  • Report ID: 5780057 •
  • Format: PDF
Governments in emerging markets are under growing pressure to provide patients with access to innovative drugs, but pricing is the subject of increasing debate. After years of stalemate, innovative drugs have begun to reach public formularies as both parties appear ready to compromise.
China takes the lead as market access hurdles begin to shrink

Governments in emerging markets are under growing pressure to provide patients with access to innovative, life-changing (sometimes life-saving) drugs, while the price tags attached to these products are the subject of increasing debate. After years of stalemate, during which patented brands were virtually absent from public sector drug formularies in many emerging economies, both parties appear ready to compromise. Policymakers are overhauling regulatory frameworks in a bid to encourage the development and registration of innovative new drugs, while regulators and manufacturers are negotiating managed entry agreements (MEAs), paving the way for the inclusion of more specialty medicines in public formularies.
Events are moving fastest in China, where policymakers have already delivered major regulatory improvements, and where more than 50 patented brands have been added to the country’s National Reimbursement Drug List (NRDL) over the past two years. Elsewhere, the pace of change remains much slower, and patented specialties still face significant barriers to market access in most emerging markets. However, China’s market opportunity is too big for research-based manufacturers to ignore.

IP deficiencies are a cause for growing concern

While they are keen to facilitate patient access to innovative medicines, policymakers are equally anxious to curb rates of increase in pharmaceutical expenditure. Access to low-cost generics is key in that respect, and a desire to maximize the availability of cheap drugs has mitigated against the imposition of more robust intellectual property protection frameworks. Recent directions of travel are concerning for originators. More patents are being subjected to legal challenges, the prohibition of second-use patents is increasingly widespread, while compulsory licensing provisions have been broadened in countries such as Russia, Indonesia, and Turkey.

Development and regulatory frameworks are improving

By contrast, significant improvements in the regulatory frameworks governing new drug development and registration are being witnessed in a growing number of emerging markets. Clinical trial authorization procedures are being expedited, local trial waivers are being issued more widely, national medicines agencies are hiring more expert reviewers, and fast-track approval procedures are being introduced for breakthrough products and orphan drugs. Regulators in some emerging markets are now willing to grant “reliance-based” approvals, acknowledging the detailed scrutiny to which new drugs have been subjected in the US and Europe.

Price remains the key barrier to reimbursement and formulary listing

Innovative medicines are prohibitively expensive for the vast majority of patients in emerging markets, while price is also the biggest stumbling block for originators seeking the inclusion of new drugs on payer formularies. Health technology assessment (HTA) agencies have been established in a number of emerging markets, but the methodology employed by these bodies to assess innovative medicines is often opaque, and the suspicion is that they focus primarily on cost rather than cost-effectiveness.
In the absence of more widespread public formulary listings, patented brands have struggled to make significant headway in most emerging markets. Recent moves towards the use of managed entry agreements promise to break this market access impasse, but it is clear that manufacturers will have to give significantly more ground than they have previously been willing to cede in return for reimbursement listings.

Post-launch barriers will continue to hamper market access

Import tariffs hamper access to original brands in most emerging markets – especially where their impact is compounded by the imposition of internal taxes on medicines and the addition of unregulated mark-ups by distributors, retailers, and, in some countries, providers. The compounded financial burden imposed by import tariffs amounts to more than $6bn a year in China alone, and exceeds $13bn in the E7 countries (Brazil, Russia, India, China, Mexico, Indonesia, and Turkey). China has however announced the removal of import tariffs from a range of drugs, while the introduction of a harmonized Goods and Services Tax (GST) in India promises to deliver significant improvements in supply chain efficiency there.

Cost-containment initiatives will affect prescribing and promotion

MEAs may mitigate the impact of innovative medicines on payer budgets, but new drug reimbursement listings will still drive up pharmaceutical expenditure. As a result, cost-containment measures will be ramped up in a bid to limit the impact of innovative medicines on healthcare finances. Price controls will be a favored target, but measures aimed at physicians and efforts to limit the impact of promotional activity on prescribing behavior will also feature.