As the emerging markets develop and adopt an increasingly westernised lifestyle they will unfortunately have to cope with treating an increasingly westernised set of diseases. This comes about due to increased wealth, changes in diet, urbanisation and increased longevity.
In conjunction with Atlantic Securities we analysed which therapy areas were likely to grow significantly in emerging markets as a result of this shift and mapped this to European and US pharmaceutical companies which have existing drugs that treat these symptoms. The main growth areas are: Vaccines, Type 2 diabetes, Oncology, Cardiovascular and Dementia.
Large pharmaceutical drug companies face a number of well known headwinds, particularly in their home markets in the EU and US where governments are tightening safety regulations (making it harder to get new drug approval) and are keen to get better value for money and make savings in their bloated healthcare bills – which translates into falling drug prices. Also many of the patents on the biggest drugs are expiring which opens the market up to competition from cheaper generic products. The drug companies are responding by targeting significant cost savings to reduce the negative impact on their margins and various approaches to limit the impact of generics (e.g. partnering with genetics companies).
Read more on Blue & Green Investor