Frost & Sullivan: Escalating Costs of Drug Development Drive the Pharmaceutical Companies to Tap Opportunities in Emerging Markets

LONDON, June 24, 2010 - The increased cost of drug development has impelled pharmaceutical
companies to seek better opportunities in emerging markets to successfully
expand and sell their products. Most pharmaceutical companies consider
emerging markets lucrative due to their economical infrastructure and
manpower costs and a significant untapped market potential with a large
population.

    (Logo: photos.prnewswire.com/prnh/20081117/FSLOGO)
    (Logo: www.newscom.com/cgi-bin/prnh/20081117/FSLOGO)

New analysis from Frost & Sullivan (www.pharma.frost.com), Global
Pharma-Biotech Alliance Analysis, finds that healthcare reform programmes in
emerging markets have dramatically improved the level of healthcare coverage
in these countries. The regions covered in this research service include the
so-called BRIC countries, Brazil, Russia, India, and China. In fact, China is
expected to be the third fastest growing pharmaceutical market in the world
by 2011.

"With companies focusing on emerging markets, they would need to address
the varying medical requirements of each of these markets," says Frost &
Sullivan Research Analyst Swetha Shantikumar. "Therefore, there will be an
overall shift in the pharmaceutical industry from a very Western centric
model to a global one."

Disease areas that were once considered niche are now given priority and
the more prevalent disease therapeutic areas in the mature markets have taken
a backseat. Vaccines, biologics, over the counter (OTC) candidates and
generics are the principal revenue generators in the emerging markets.

However, weak intellectual property (IP) laws, escalating drug costs, and
low reimbursement rates for drugs plague the current healthcare system in
China. Implementation of the plan will go a long way in attracting financial
investments from pharmaceutical companies across the globe as the plan also
involves revamping IP laws and providing healthcare coverage to all. This
will create a huge market potential that the pharmaceutical companies can
capitalise.

"For instance, one of the main drawbacks of the Indian pharmaceutical
industry is weak IP laws and policies," explains Shantikumar. "The new Indian
patent code has addressed that and several other issues, yet there remains a
clause that disallows patents for treatments that are not more efficacious
than those already available."

Although the emerging markets have several restraints, it does not stop
the big pharmaceutical companies from investing in countries like India and
China, which offer greater advantages such as intellectual talent pool, cheap
land and labour, and investor-friendly governments.

"These companies need to re-evaluate their priorities and develop
customised strategies that are suitable for the emerging markets," concludes
Shantikumar.

If you are interested in more information on Frost & Sullivan's Global
Pharma-Biotech Alliance Analysis, please send an e-mail to Katja Feick,
Corporate Communications, at katja.feick@frost.com, with your full name,
company name, title, telephone number, company e-mail address, company
website, city, state and country.

Global Pharma-Biotech Alliance Analysis is part of the Pharmaceuticals &
Biotechnology Growth Partnership Services programme, which also includes
research in the following markets: Global Active Pharmaceutical Ingredients
(API) Market - An Outlook, Strategic Analysis of European DNA Microarrays
Market, Life Sciences Funding, Overview of the Healthcare Industry in Central
and Eastern European Countries, Global Skin Cancer Therapeutics Market, and
European Lifestyle Disorders Therapeutics Market, among others. All research
services included in subscriptions provide detailed market opportunities and
industry trends that have been evaluated following extensive interviews with
market participants.

About Frost & Sullivan

Frost & Sullivan, the Growth Partnership Company, enables clients to
accelerate growth and achieve best-in-class positions in growth, innovation
and leadership. The company's Growth Partnership Service provides the CEO and
the CEO's Growth Team with disciplined research and best-practice models to
drive the generation, evaluation, and implementation of powerful growth
strategies. Frost & Sullivan leverages over 45 years of experience in
partnering with Global 1000 companies, emerging businesses and the investment
community from 40 offices on six continents. To join our Growth Partnership,
please visit www.frost.com.

    Global Pharma-Biotech Alliance Analysis
    M5C3

    Contact:
    Katja Feick
    Corporate Communications - Europe
    P: +49-(0)-69-7703343
    E: katja.feick@frost.com
    www.frost.com
    Twitter: twitter.com/frost_sullivan

Katja Feick, Corporate Communications - Europe, Frost & Sullivan, +49-(0)-69-7703343, katja.feick at frost.com