Changing Market Demographics and Related

¶ … changing market demographics and related factors in foreign countries continues to be an important issue for major pharmaceutical companies. More specifically, the largest drug companies headquartered in the so-called "First World" have learned to by somewhat shy of the international market in less developed poorer nations, largely because the latter do not offer the same degree of patent protection as wealthier more developed nations. However, pharmaceutical companies are beginning to re-evaluate that concern for several reasons.

Authors Point-of-View:

The author acknowledges the traditional (albeit learned) bias against marketing proprietary pharmaceutical formulations in poorer nations that do not offer patent protection comparable to those available in the wealthier nations where such drugs are typically developed. On the other hand, the author suggests that this apprehension is undergoing a change on the part of pharmaceutical companies for the following reasons: First, the growth of the economies, and therefore, the middle classes in poorer nations presents a potentially lucrative market that drug companies may have a difficult time resisting. Second, market growth in the wealthier nations has slowed, substantially because of increasing competition from the sale of generic drugs and also because of increasing government legislation and controls that limit prices and profits on pharmaceuticals in those countries. Third, pharmaceutical companies are beginning to realize the extent to which the populations of underdeveloped nations actually represent potentially lucrative markets.

In that regard, the author makes the important point that, to date, when pharmaceutical companies set up operations in developing nations, it has almost always been to take advantage of lower manufacturing costs and not as a function of the potential value of the populations of those nations as new consumer markets in and of themselves. But pharmaceutical companies are beginning to realize that the populations of those nations also represent potential untapped markets because many of their health issues have not previously been the inspiration for pharmaceutical research.