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GEN News Highlights : Feb 17, 2012
Merck & Co. Raises Its Bet on Emerging Markets
Firm aims to grow its share of sales in these areas from 18% to 25% by next year.!--h2>
Almost two months into 2012, Merck & Co. has revealed a key goal for the year: grow its share of sales in emerging markets from the current 18% to 25% by next year, with a long-range objective of improving from fourth among big biopharmas to first or second within five to seven years, Indian newspaper The Economic Times reports.
Merck’s view of emerging markets is more expansive than some of its rivals, since it encompasses not just the BRIC nations but also South Korea, Mexico, and Turkey. In Brazil, Merck reported plans Febraury 15 to launch a joint venture with Supera Farma Laboratorios to market, distribute, and sell 30 branded and branded generic products across a range of therapy areas from Supera’s. Cristália, one of Supera's owners, has products primarily focused on psychiatry, anesthesia, and pain relief, while Eurofarma, Supera's other owner, has a portfolio that includes oncology drugs.
Merck will own 51% of the joint venture. “This venture is an important step forward in our strategy to grow our business in key markets and improve global access to our medicines and vaccines,’’ Merck CEO Kenneth Frazier said.
“The strategy for each country is uniquely different,” Kevin Ali, president, emerging markets for Merck, told The Economic Times. "We will focus our research and development on products that are important for a particular country. Both primary-care drugs and speciality products will get our attention."
In India and other countries, Merck will launch about seven products this year. Those products will range from therapeutic drugs to vaccines and biosimilars, KG Anathakrishnan, Merck India’s managing director, told the newspaper.
Merck has another 19 products in late-stage development that will be launched first in the U.S. and Europe, then in India. The company has 14 manufacturing partnerships in India presently and will forge more to strengthen the market share of drugs that are available in India already.
In China, sales grew 37% year-over-year—to $834 million from $611 million—“and continues to be a key driver of growth in the emerging markets,” Merck said earlier this month in announcing fourth-quarter and full-year results. In the fourth quarter alone, Merck racked up $221 million in sales, up 28% from $173 million in Q4 2010. Small wonder then that the company is looking to increase its presence in China, announcing recently that it would establish an Asia R&D headquarters for innovative drug discovery and development in Beijing. Similar comparisons are not available individually for other emerging market nations since they are lumped into regions like Latin America, Asia Pacific, or Eastern Europe/Middle East Africa. In the U.S., by contrast, 3Q year-over-year sales rose just 6% to $4.515 billion, while January-through-September sales edged up just 1% (to $12.511 billion).
Hence the move by Merck, like other big biopharmas, toward pursuing sizeable sales gains in emerging areas. It’s easy to generate big year-over-year gains early on, after showering new attention and sales muscle in a different part of the world. But to make those gains stick longer-term, they’ll have to outsmart competition posed by generic firms by securing IP protection, a notorious task in emerging markets. As these regions fortify their IP rules, Merck and other big firms will also have to out-innovate rivals in these countries as local innovation is also growing.
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