What is the BRIC deal?

 

In the pharmaceutical arena we have historically tended to focus on 7 key markets that provide, in 2013, 90% of the market revenue. These markets are typically the US, the EU 5 – UK, France, Germany, Spain, Italy and Japan. These countries all have mature pharmaceutical markets and arguably give an indication of any particular global market segment.

 

Aside from these 7 key markets we include a Rest of the World (ROW) section.

 

Now the ROW section, particularly in the pharmaceutical arena, can be changeable. Many factors affect a market, but in growing or emerging markets these factors can be endless as well as changeable. For example; the Chinese pharmaceutical market as a whole was valued at $88bn in 2012, with traditional Chinese medicine (TCM) making up $32bn of this. What constitutes TCM, how does TCM interact with modern medicines etc. etc. is the subject of many studies and reports at the moment.

 

As well as ascertaining each national market nuances, another key aspect to forecasting growth in emerging markets is by looking at GDP per capita; this can give us one indication of the worth of any given market.

 

Below is a table that breaks down the key emerging markets;

 

Table BRIC Population, GDP 2000 & 2010, CAGR & GDP per Capita 2000 & 2010 ($/per annum)

 

 

Brazil

Russia

India

China

 

Population

(2012)

 

 

194m

 

142m

 

1.15bn

 

1.33bn

 

GDP 2010

 

 

$1,988bn

 

$1,232bn

 

$1,310bn

 

$4,985bn

 

 

GDP 2000

 

$1,234bn

 

$259bn

 

$474bn

 

$1,198bn

 

GDP Avg. Growth Rate

1990-2010

 

4.2%

 

4.5%

 

8.1%

 

9.5%

 

GDP Per Capita

2010

 

$10,499

 

$14,913

 

$3,015

 

$6,778

 

GDP Per Capita

2000

 

$7,207

 

$1,775

 

$1,534

 

$2,379

 

 

                                                                           GMR Data 2013

 

 

The strong growth highlighted in the table above equate to high numbers of the BRIC countries population moving into the middle class income bracket of $6,000 to $30,000 (GDP per capita, per annum). As increasing numbers of the population move into the middle classes, evidence shows that the rate of annual doctor visits increase, annual spending on both prescription & OTC drugs increase and levels of health education increase.  

 

So we can see definite growth in these key emerging sectors, what this means is that when we look at key pharma markets over the next decade, the ROW sector will begin to become more important. Dependant on the particular pharma market we are discussing, the ROW sector generates between 0-10% of global revenue in 2013, tellingly as we look ahead to 2023, for these same markets, our forecasts, dependant on the sector, begin to generate 18-27% of a market’s revenue. That is why in economic terms ‘BRIC’ is a big deal.