Interview: Tarek Rabah

What scope do you see for increasing research and development (R&D) activity in emerging markets?

TAREK RABAH: R&D investment requires economic stability and the implementation of health care regulations, as well as simple, clear investment processes. In emerging markets, stakeholders need to collaborate to establish and enhance R&D. Many of these markets require proper legislation to regulate R&D, or currently have slow processes of approval and implementation.

Collaboration can help set up integrated business models and regulations that will help create an appropriate environment for R&D. AstraZeneca, for instance, is committed to investing in Algeria to accelerate local production via all available options that are already being studied with the aim of accelerating the availability of innovative medicines for Algerian patients. Investments in local production provide an opportunity for businesses to collaborate with academics, researchers and external partners. This investment will contribute to a real transfer of technology, know-how, and to the reinforcement of local production capabilities, material and human capital.

How important are intellectual property rights?

RABAH: We must first consider the process of developing a new drug. Among the 10,000 candidate molecules that are developed in laboratories, only one will make a difference and reach pharmacies. The process from molecule discovery to clinical trials and market launch takes about 10 years, with a budget and workforce that amounts to $1.2bn and 10,000 professionals in over eight countries. Intellectual property rights are crucial in the development of these products. The patenting processes for treatments must be designed bearing investment efforts in mind.

To what extent do you think product pricing is a factor in cost-sensitive markets?

RABAH: Globally, pricing is a very sensitive issue, especially reference pricing, which is the model mostly used in emerging markets. This model links prices between countries of different scale and economic status, thus affecting prices in ways that are not always rational. Drug development is lengthy and costly. It is also a chain and an ongoing process; the success of one drug will trigger and support the development of other molecules. Therefore strong collaboration among the industry’s stakeholders and regulatory authorities can make a difference in generating the best solution by allowing the patient early access to medication, and can help in cost rationalisation for the government.

Moreover, the implementation of intellectual property rights plays a major role in the collaboration through protecting the new molecules and gaining room for generics in a timely and orderly manner.

What role do emerging markets play in terms of revenues for large-scale drug companies?

RABAH: Five years ago, emerging markets were contributing just 5% of pharmaceutical companies’ profits. Since then, the picture has changed significantly. Today, they make up to 25-35%. This shift is fuelled by many factors. Emerging markets have a young and growing population with increasing socio-economic structures and GNP ratios. They host most of the global population (5.5bn) and they hold 43% of the world’s wealth, which has allowed them to emerge quickly from a state of poverty to become world financial and trade markets. Moreover, the epidemiological profile in the country is changing rapidly as cardiovascular diseases, diabetes, obesity and cancer are on the rise.

Clearly, the stakes are rising: the challenges are important and the opportunities are big. Resolving those challenges and grabbing these opportunities is feasible and within reach. Indeed, the collaboration and open dialogue of stakeholders in the health care industry carries critical importance for the long-term development of these markets, allowing the population to better understand the diseases and their risks, paving the way to a far healthier and informed population.