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Market Entry Strategy Development

Study to prioritize strategic value across 30 countries in Europe and the Middle East based on revenue potential and ease of market entry

Situation

As growth opportunities in established markets dwindle, pharmaceutical companies are turning to emerging markets to bolster revenues. However, doing business in these markets carries a great deal of risk. Emerging market investments are threatened by volatile economies and unstable political systems. Moreover, revenue gains are hard to achieve due to competition from generic manufacturers and lower consumer purchasing power.

In order for pharmaceutical companies to take full advantage of emerging market opportunities, market entry strategies must be informed by comprehensive and country-specific market intelligence.

Solution 

A pharmaceutical company looking to introduce a range of infectious disease and oncology drugs in 30 markets throughout the Middle East and Europe appointed Axios to develop market entry strategies for both reimbursed and self-pay patients.

To determine which countries to prioritize, the study considered three main factors: revenue potential, ease of market access and strategic value. In the first phase of the analysis, the revenue potential for each country was projected. Countries were then classified into tiers for both reimbursed and self-pay markets according to revenue potential. From this analysis, the ten countries exhibiting the highest potential across disease areas were prioritized.

In order to investigate ease of market access, it was necessary to look beyond the macroeconomic indicators and statistics and understand the local factors and field-level realities which shape pharmaceutical markets in emerging economies. Axios accomplished this by leveraging its experience in emerging markets and interviewing physicians, insurance providers and public officials in the prioritized countries.

Following this analysis, the strategic value that the prioritized countries presented for the company was considered. Taking into account other factors beyond market size, smaller countries in less-explored regions were considered alongside larger and more mainstream markets. Finally, reimbursed and self-pay markets were ranked in a tiered system according to market potential. In markets where the highest revenue potential was identified, Axios offered guiding principles for successful market entry.

Results

For pharmaceutical companies looking to invest in emerging markets, it is essential to gain a thorough understanding of country-level realities affecting not only revenue potential, but also ease of market access. Combined, these two factors are effective in assessing real strategic value, which in turn can be used to guide market entry decisions that minimize risk while harnessing potential.