Emerging markets have historically been looked at as markets driven by poverty, strife, lack of access, primitive healthcare practices and complete lack of awareness and affordability. These markets were looked with suspicion and a fair degree of disdain by both regulators as well as manufacturers. Accused of stealing critical IP to questionable quality standards, these markets were not necessarily prioritised in global large Bio-pharmaceutical HQs.
However if we exclude Japan, over 4.5 Billion people live in the continent of Asia, a majority of them in China, India and Indonesia. The total population living in the continent of Africa is about 1.2 Billion. These continent are home to some of the poorest in the world. Put together, these two continents account for close to 75% of all of humanity on this planet. People who are treated with disdain and derision by the world’s largest pharmaceutical companies.
But there is an interesting subplot to this whole story. Though economically backward, these countries are also some of the fastest growing economies in the world. China is a dominant world player and will overtake the US as the world’s largest economy (although not on a per-capita basis) in the near future. India is on its way towards being the third largest economy by the end of this decade. These Asian countries are also more stable from a Politico-Social standpoint with strong governance systems either through single-party rule as in China or vibrant democracies like the rest of the majority of Asia. Africa is one of the least explored continent from a growth standpoint. As per an IEA report, Africa which reported a total GDP of approximately $7.5 Trillion in 2018, could reach as high as $ 25 Trillion by 2040. A nearly 3.5 timesgrowth from the current levels. A region rich in natural resources and a fast growing population, many parts of Africa do suffer from poor governance, weak systems and internal strife. History however teaches us that once prosperity starts and wealth distribution become slightly more equal than before, governance and systems catch up at accelerate progress.
But the question is: How is this relevant for our discussion on healthcare? Well it is. As countries become more economically prosperous, they become more assertive. Seeking greater healthcare access, while also retaining the ability to pay for that healthcare. On the other hand, decades of healthcare ostracism forced them to either become more self reliant or seek cheaper sources of health supply.
This is where large economies like India and China stepped up. Early investments in the chemical industries helped position china as one of the world’s largest sources of pharmaceutical raw materials and Active pharmaceutical ingredients. India on the other hand became a leading generics player, mastering chemistry for reverse engineering innovator pharmaceutical products as well as formulation sciences. Using these early start and a generously convenient interpretation of IP laws (India did not recognise the global IP regime till 2005), both these countries developed a thriving pharmaceutical industry domestically. Countries like South Korea and Taiwan repeated a version of the above events to build strong local competences in Bio-tech and bio similars.
Fast forward to the decade of 2010. India has the highest number of US FDA approved plants outside of the US. And China manufactures over 40% of all the API used worldwide. Together, India and China supply over 80% of the medicines that are consumed by patients in the US. New US FDA manufacturing plants are now being approved in countries like Bangladesh, Myanmar, Indonesia, Malaysia etc. Countries that one would not have imagined anywhere on the world pharmaceutical manufacturing map at the turn of the 21st century. Countries in Africa have locked in low cost supply sources from India and China. They are also focusing on local manufacturing, borrowing a leaf out of the India/China playbook.
Today as the world is in the grip of the COVID pandemic, the only hope is the emergence of vaccine. So much has been said of the truly cutting edge mRNA vaccines from Pfizer and Moderna. But the fact remains that a majority of the world’s population, including those living in Europe will likely get vaccinated either with Synovac, manufactured in China or Covishield, manufactured in India. When one sits back and thinks to all those years of scarcity and ostracism, one can’t help but wonder how the world has come a full circle. True, there is still a lot to do to improve quality, enhance scale, invest further in science etc. But this nobody can deny-Healthcare has truly emerged in emerging markets.