“The reason that pharmaceutical market access professionals are excited about AsiaPacific (APAC),” says Jeff Weisel, Managing Director APAC, “is not just because of the developed markets with mature payer systems; it’s also the potential from emerging markets with larger populations and evolving payer systems.”
In this market access update, Jeff explains that while APAC markets may appear to be particularly complex, market access strategies will be improved by:
- Thinking of the region as 2 distinct groups or archetypes
- Seeking opportunities for growth in markets with larger populations and evolving public healthcare systems as well as the more traditional developed markets
- Appreciating the priorities of public healthcare systems within the region
- Understanding the role of private sector healthcare in the emerging APAC markets
- Exploring the opportunities for improving the development and day-to-day execution of market access strategies in a post-COVID-19 landscape.
How would you describe the APAC market access landscape to someone who is new to the region?
First, let’s start with some basic definitions of what we mean by APAC for this discussion. Most companies would include China, Japan, Korea, Taiwan, Hong Kong, Southeast Asia (Singapore, Malaysia, Indonesia, Thailand, Vietnam, the Philippines), Australia, New Zealand, and India as markets of interest in the APAC region.
APAC is the biggest and most diverse region of the world, and it is diverse in every conceivable way. There are different geographic and population scales and a broad spectrum of economic and healthcare development; from rich countries like Australia and Japan to emerging countries like Vietnam and India.
It’s also the most dynamic region. At the most macro level, more people in APAC are getting older and richer faster than in any other place or time in history. As people get older and richer, they also have more chronic diseases and cancer, putting more burden on healthcare systems. More recently, it has been the pace of technology change as APAC now leads the world in many aspects of developing and adopting new technologies such as mobile and digital platforms.
Faced by this scale, diversity, and dynamism, it can be daunting for market access professionals, and especially for those outside APAC looking in. They could make overgeneralizations about the region or go the opposite way and get hampered thinking about their business country by country.
Is market access in APAC different from other regions, such as Europe?
It is quite different from Europe which, even with its multiple countries, is a lot easier to get your head around. In Europe, individual markets are broadly similar in terms of health status, economic development, healthcare systems, and in some respects operate under a single set of rules.
Pharmaceutical manufacturers can assume that their products will enter the individual markets within Europe in similar ways, populations will have the same healthcare needs with similar disease burdens, and governments will mostly fund medicine in more or less the same way. And, even from a regulatory point of view, there is a single point of entry in the European Union.
Most of this common framework doesn’t yet exist in APAC; successful market access in APAC is like completing a puzzle. So that’s the starting point—appreciating that you must have more than one approach to the region.
How can market access professionals begin to make sense of the APAC region?
To make sense of this, you can identify 2 distinct groups of countries based on their level of economic development and healthcare spending.
In one grouping are the developed markets: Australia, New Zealand, Japan, Korea, Taiwan, Hong Kong, and Singapore. These are markets that, in many respects, have systems and levels of economic development and patient expectations that are similar to those in Europe. They also have universal healthcare systems and national, government-led reimbursement. So, the rules familiar to European operations broadly apply here, with some tweaks. Healthcare spending per capita is in the $3,000-$5,000+ range; in other words, in line with other OECD countries.
In the other grouping are the emerging markets: China and most of Southeast Asia, including Thailand, Indonesia, the Philippines, Malaysia, Vietnam, as well as India. In these markets, healthcare spends per capita ranges from a little over $1,000 in Malaysia to only around $200 in India. Even in China, it is still under $1,000 per capita, although it is a vast market, of course.
What are the priorities for healthcare systems in the developed APAC markets?
The expectations and requirements of governments in the developed markets, where there is comprehensive universal healthcare coverage, is around getting the best technologies and the best outcomes for what they’re spending. In other words, “How do we get the best value?”
The developed markets are also more focused on ageing populations, and treatments for cancer and chronic diseases. And people here expect high-quality care, so anything less than that would be unacceptable and may well become an issue at election time.
In emerging APAC markets, where do healthcare systems put emphasis?
Healthcare funding systems are still in various stages of evolution in the emerging APAC markets. For example, many of these countries such as Thailand, China, and Indonesia already offer some kind of universal coverage, but this coverage is often limited by cost constraints to older treatments. They have large populations to enroll and millions living away from major urban centers. They lack the resources and funding to progress at pace.
Consequently, for these countries, the emphasis is not yet primarily on maximizing and optimizing the universal healthcare system, it’s still around expanding the system—building hospitals and clinics and training healthcare professionals—especially outside the main cities.
Health ministries in emerging markets are also still grappling with infectious diseases as well as managing the rapid growth of cancer and lifestyle-driven chronic diseases. Of course, infectious diseases have come back on the agenda of both emerging and developed markets with the COVID-19 pandemic, which emerged first in the region.
What’s the role of private sector healthcare in the emerging APAC markets?
In these emerging markets, the role of the private sector in both healthcare delivery and funding is still being defined. If you look at China, Southeast Asia, or India, they’ve all announced they are implementing some kind of national, government-led healthcare system. Yet, at the same time, in all these countries, private health insurance is growing at double-digit rates.
Why would both be happening at the same time? The answer is that private healthcare is a lifestyle choice and a rapidly rising middle class isn’t satisfied with the government-backed scheme, and so choose to pay for access to more care and better service. That’s not the case in Korea or Australia, because the state-funded system provides comprehensive access to care.
Even though most of the APAC emerging markets have launched some form of universal coverage, private insurance is growing at an incredible pace because the state scheme doesn’t cover everything. It covers generics, for instance, and very basic treatments. But if you want more than that, you must either self-pay or use a private insurance scheme.
From a market access perspective, it’s helpful to view the APAC region as 2 different markets, but where is the growth coming from?
The reason that pharmaceutical manufacturers are excited about the APAC region is not just because of the richer developed markets with mature healthcare systems where they traditionally focused; the opportunity is with the growth potential of the emerging markets, with their larger populations and evolving healthcare systems.
If you go back 5 -7 years, the 2 groupings, developed and emerging, were about the same size in terms of the pharma market and overall healthcare spend. But since then, the emerging markets have grown much faster and are expected to continue to do so, making market access in these markets a strategic imperative for all pharma companies wanting to be competitive in the region and globally.
Transform your market access in Asia-Pacific
The Asia-Pacific region is critical to the future growth plans of pharmaceutical manufacturers and Avalere Health are leading ground-breaking market access projects in the region.
How should pharmaceutical companies build their market access strategies for the dynamic and diverse APAC region?
For the developed markets, companies already largely follow the same strategies that they do for new drugs in Europe. They build dossiers of clinical and economic evidence which are then submitted to the relevant government agencies assessing new health technologies. Though there are some local differences—Korea and Taiwan also reference prices from baskets of global markets, for example, and Singapore and Hong Kong only provide comprehensive public coverage to lower income patients—the submission process and evidence requirements are mostly aligned with other major markets.
Access strategies for emerging markets must start from a couple of basic facts. First is that the submission process and evidence requirements in these countries are still much less well defined (with the notable exception of Thailand), reflecting the less mature healthcare financing systems and shortage of trained resources specialized in this area. Second (and more fundamental) is the difference in per capita spend between the emerging markets and their developed market counterparts. It doesn’t make sense to assume that the access strategy for Australia would be the same for Thailand when expenditure levels in the latter are less than one-fifth of those in the former.
When you combine limited financial resources with payer systems that are still evolving, the obvious focus for emerging markets is on containing cost. Since they are less able to determine the pharmacoeconomic value of innovative drugs, the usual path is simply not to reimburse newer therapies at all or only on a highly restricted basis. China has leveraged the size of its market to extract sharply discounted prices for access to their National Reimbursement Drug List but other emerging markets are not able to exert that sort of pressure on pharma companies and therefore can’t fit the new treatments within their constrained budgets.
Historically, many companies would often simply overlook the smaller emerging markets, but more recently we see more innovative approaches to address affordability and availability for patients in these markets. Patient access programs, collaborations with private insurance companies, and even dedicated separate brands are among the strategies being deployed in the region.
PRMA Consulting is now Avalere Health
How have COVID-19 restrictions impacted the development and day-to-day execution of company access strategies in the APAC region?
On one level, the pandemic is having a significant impact on how healthcare is delivered and paid for in the region. APAC markets have arguably led the way in adopting telemedicine platforms where patients can consult a physician, get a prescription, and even pay for their medicine and arrange for delivery—all on their mobile phone. Pharma companies must consider this new reality when formulating their access strategies.
With many APAC regional headquarters in Singapore, market access professionals, like their commercial and medical colleagues, spent a lot of time traveling to visit their market affiliates to align with their local teams and maintain relationships with stakeholders. Face-to-face meetings were seen as culturally appropriate and business-critical, even with the much longer flight times and higher costs found elsewhere.
These interactions moved online very quickly during the pandemic; even larger scale conference events went virtual. Like in every other industry, pharma companies are now reassessing the need for such high levels of physical travel. Much like the similar discussions about balancing working from home versus the office, the general sense is that we won’t return to how things were before.
Digital applications are certainly making life easier. There are robust systems that improve collaboration between global, regional, and local teams as they assess risks and opportunities in APAC markets. So, while travel will resume at some level, we are seeing an increasing digital transformation of market access in the APAC region that is giving companies more efficient ways to gain insight, collaborate, and drive action.
Closing the access gap
One challenge facing pharma companies across both developed and emerging markets is the “access gap” where products are launched in the region often much later than in the US and Europe. With APAC presenting big opportunities for growth, closing the access gap is a major priority.
How do you do it?
We will continue to explore potential strategies for closing the gap in both developed and emerging markets in future articles so please subscribe for the updates.