Janifha Evangeline | Saturday, 09 September 2023
Despite the alluring potential, the majority of global pharmaceutical companies have not been able to establish a stable position in emerging markets; only 10 to 20 percent of multinational corporations' total income comes from developing nations.
Cheap generic medications and medical supplies have been more widely available due to competition, which has also led to significant expansion in the manufacturing and distribution industries, particularly for SMEs (Small to Medium-sized Enterprises). However, as more competitors and products enter new countries, population growth cannot keep up, posing significant hurdles for local distributors there. Weak players who are unable to adjust to this new reality and shifting playing field will disappear and perish. In order to maintain competition and increase revenues, distributors in growing countries spanning Africa, Asia, the Middle East, South America, and East Europe require an efficient, diversified approach. The pharmaceutical sector is one that has a significant impact on people's health. The pharmaceutical sector, like other industries, has several difficulties. Three typical challenges that impact pharmaceutical distribution globally and solutions to address these issues are listed below.
Premature Distribution and Logistics Networks It's crucial to first understand the difference between a supply chain and a value chain. A supply chain is the process or phases via which all parties involved culminate in the fulfillment of a client request, whereas a value chain is a set of related acts a corporation uses to acquire a competitive advantage. Since the supply chain and value chain in emerging nations are usually undeveloped, stiff, and fragmented, distributors must cope with these restrictions. The solution is to determine the distributor's alternatives within the supply chain, then search for the weak points and make small adjustments. By differentiating that area of the value chain, you may strengthen an existing competitive advantage or forge a brand-new one by observing what other distributors are not doing or doing poorly. While you cannot, for instance, make your country's roads better, you may think of a new delivery method for your clients that is more flexible or catered to their requirements. Other considerations include:
Supply Chain Evolution: It's crucial to "future proof" your local supply chain by maintaining flexibility; it's probable that your country's supply chain is developing, so be sure you do the same.
Role of technology: Accept the part that technology plays in your value chain. Even though most poor nations will have technical limitations, think about how you might invest in new software and technology that can increase efficiency.
Local competition: Analyze the supply and value chains of your rivals in great detail. Consider what you could change.
Brand protection: Ensure that the brands you are distributing are protected by utilizing methods of distribution that differentiate your products, raising customer expectations, and providing value-added services.
Complex Regulatory Environments Any pharmaceutical or medical device distributor who has found
success in their own country is well aware of the difficulties posed by the regulatory system there. While the pharmaceutical industry in the majority of emerging nations is either uncontrolled or insufficiently regulated, compliance is increasing quickly as governments work to better manage the importation and distribution of these vital goods for the wellbeing of their populations. Financial and distribution planning can be highly challenging since the product registration procedure, which may be delayed in the system for years, might take years. The solution is to find smart distributors who will have a strategy in place for when and how to introduce their items to the market. Even well-established distributors, who may have 100 or more registered items in distribution, must continue to expand their product line. Such new items should be meticulously designed, especially taking into consideration how to operate in accordance with local regulations and the lead time from the beginning of the registration procedure up to the point of completion and market launch. Consider incorporating or adding goods like OTC medications, medical equipment, or healthcare items that can be introduced sooner while waiting for the registration of more strictly controlled medicines to be finalized, for instance, if 10 new products are scheduled for registration.
Uncertain Pricing and Product Supplies The distributor must always strike a balance between price and quality. Distributors in emerging countries have fewer alternatives, but developed markets have a more segmented product variety, which means there is demand for all price ranges of a product. The best value for the minimum acceptable quality level of a product is the most crucial factor for a distributor to take into account because of the lower spendable income of the ordinary consumer in developing nations. As an illustration, even a basic thermometer at the appropriate price range must still perform properly and live up to the expectations of both your client and the consumer. Your market might not have a need for a sophisticated, pricey clinical thermometer with all the bells and whistles. Shortages of particular medications occur often in a distributor's nation since pharmaceutical items have lengthy lead times for payment, manufacture, shipping, and customs processes. If they are the sole players in the market, distributors who have stock of these items would often make large profits without their knowledge or consent. While the dynamics of emerging economies need distributors to concentrate on affordable, acceptable-quality pharmaceutical and medical items, the trend in the majority of markets is that quality standards are improving, thus the distributor must also change. As the average consumer's income improves, so does their purchasing power and willingness to spend more money on necessities like healthcare items. But it takes years for this tendency to develop. Differentiating their products while remaining within the range of acceptable pricing points is one strategy used by the most successful distributors to cope. Often, increased expenditures are not necessary for such difference; instead, inventiveness is needed. While making unanticipated gains isn't always a bad thing, it may also be seen as an indication of poor preparation. Even while some market factors and situations will be hard to forecast, they may nevertheless be feasible to adequately prepare for. Many pharmaceutical and medical distributors in developing nations focus their business strategies on addressing market gaps and rely on timing that is predicated on insider knowledge and assumptions. But this is hardly a long-term business strategy. Instead, effective distributors recognize that their clients desire constancy in supply, so they regularly offer a variety of items, despite the fact that many of the products have lower profits.
