Pharma Futures 3 Emerging Opportunities

Pharma Futures 3
Taking as a starting point the five
key challenges of operating in
emerging markets outlined above:
(1) complexity; (2) affordability; (3)
accessibility; (4) government relations;
and (5) the social contract, PF3
undertook research into how other
companies in other sectors have
developed successful models for
operating in these markets. The intent
was to investigate whether innovative
ways to address affordability and
accessibility can extend the reach of
the market to meet the needs of
greater numbers of consumers.
The research did not address what
will still need to be done to meet the
needs of the poorest who simply
cannot afford to pay, though the PF3
Working Group was in agreement that
this pressing issue should receive
urgent attention, and all expressed
their willingness to be involved in
finding solutions to this systemic
market failure.
*
Social enterprises are defined by
Wikipedia as: ‘social mission driven
organizations which trade in goods or
services for a social purpose. Their
aim to accomplish targets that are
social and environmental as well as
financial is often referred to as having
a triple bottom line.
PF3 reviewed ten cases in depth,
available on the Pharma Futures 3
website (www.pharmafutures.org).
This report looks at a selection of
these, including Nokia, as an example
of a Western multinational which is
evolving its business models to reach
beyond the urban centres to rural
populations in India and China.
It highlights how two global firms
based in emerging markets, Cemex
and Manila Water, are proving adept
at innovation solutions to better align
societal needs with shareholder value.
And finally its study of the Aravind Eye
Hospital and Fabio Rosa illustrates the
potential for social enterprise* models
to leverage the market to offer health
and energy solutions.
While PF3 did not conduct in-depth
research into current pharmaceutical
approaches in emerging markets,
the project identified evidence that
the industry is undertaking various
initiatives to reach low-income
consumers with affordable, accessible
medicine. Select case studies of
PF3 pharmaceutical participants can
be found on pages 36–37.
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These efforts are a positive signal that
some companies are actively
exploring solutions to extend the
reach of needed medicines and
healthcare services in these markets.
What follows below is an attempt to
uncover possible lessons from other
sectors to shed light on how current
experiments with new business
models can be developed and scaled
to achieve much greater impact.
In reviewing the case studies, PF3
identified three common elements to
the business models that appear to be
most successful in meeting the needs
of lower income consumers: (1) they
are human-centred; (2) they have
taken a radically new approach to
understanding affordability; and (3)
they have sought new means of
achieving market penetration, by
taking a much more active role to
ensure that their offering is accessible.
In addition to these guiding principles,
success in new markets requires a
healthy dose of patience, a willingness
to experiment and a can-do mindset.
‘It is only when you can sit down
and have a beer with your customers
that you can truly understand
their hopes and fears.’
Luis Sota
Patrimonio Hoy
Social enterprises are profit-making
businesses set up to tackle a social or
environmental need. Many commercial
businesses would consider themselves
to have social objectives, but
social enterprises are distinctive
because their social or environmental
purpose is central to what they do.’
Note: social enterprises can be forprofit
or not-for-profit; it’s the mission
rather than the legal structure that
distinguishes them.