Letter from the Editor

Contributed by:

Taren Grom, Editor

NOTE: The content below contains the first few paragraphs of the printed article and the titles of the sidebars and boxes, if applicable.

It may not be Jules Verne’s rendition of “Around the World in 80 days,” but for many pharmaceutical company managers it’s time to brush up on their language skills and make sure their passports are in order. The world is definitely getting smaller. Companies that were once aligned as being multinational are changing to global. The difference might be subtle, but there is indeed a distinction. According to several sources, multinational organizations are companies that have established identical units of their domestic business in different countries and markets, whereas global organizations are one step ahead. Rather than establishing identical units, global organizations share resources on a global basis to provide superior quality products and services. These global capabilities will be ever more important in coming years if companies are to capitalize on new markets. And they will have to address these new mar kets if they want to be successful in the coming decades. This month’s Forum addresses the challenges companies will face in these new markets. IMS reports that the United States, as well as the top five European countries, is expected to have growth of only 4% to 5% and Japan only 1% to 2%. It’s the “pharmerging markets” that hold the greatest potential — 12% to 13%. Among the leading 15 markets — China, Brazil, Mexico, South Korea, Turkey, India, and Russia are expected to have a higher CAGR until 2011 than the traditional markets. These emerging areas are being defined as having a transitional disease profile, growing access to medicines, and expanding public health programs. All in all, pharmerging markets are expected to account for 24% of the total market growth, while the top seven mar kets are expected to contribute just under 50% of the growth. Goldman Sachs, which coined the term BRIC (Brazil, Russia, India, and China) about a dozen years ago, has expanded its growth areas to now encom pass the Next 11, or N11, a list of coun tries that have promising outlooks for investment and future growth between now and 2050. While many of us will no doubt be too busy sipping cool drinks with little umbrellas around the pool and enjoying retirement to see if Goldman Sachs’ pre dictions come true in 42 years, the groundwork needed to address these countries’ populations is being laid today. These countries were identified based on macroeconomic stability, political maturi ty, openness of trade and investment poli cies, and quality of education. The N11 includes: Korea, Vietnam, Indonesia, Philippines, Iran, Turkey, Egypt, Pak istan, Bangladesh, Nigeria, and Mexico. According to Goldman Sachs, among them, Korea and Mexico are particularly important. Mexico will become the sixth largest economy. By 2050, Korea will become richer (in income per capita) than any of the current G7 countries (Canada, France, Germany, Italy, Japan, U.K., U.S.) except the United States. GDP per capita of Korea will reach $81,462 USD (in market exchange rate) in 2050, if every thing goes smoothly, while Mexico’s GDP per capita will reach $52,990 USD. The United States’ GDP per capita, standing at $89,663 USD in 2050, will be still slightly richer than Korea’s. The opportunities are vast as are the risks. According to Ernst & Young, phar maceutical firms identify the most impor tant risks as political, compliance (laws and regulations), and currency or treasury risks. They also identify fraud, bribery, and corruption as significant obstacles. (Please turn to page 14 for more information.) While it may not take us 80 days to go around the world, we will need to make the journey. Just remember to pack a book — the lines at security aren’t get ting any shorter. Taren Grom Editor Hola,Ni hao,Annyong ha shimnikka — companies are saying hello to new opportunities in newmarkets. Taren Grom Passport for success I PUBLISHER Lisa Banket EDITOR Taren Grom CREATIVE DIRECTOR Marah Walsh MANAGING EDITOR Denise Myshko SENIOR EDITORS Robin Robinson Elisabeth Pena Villarroel FEATURES EDITOR Kim Ribbink CONTRIBUTING EDITORS Cynthia Borda Carolyn Gretton DESIGN ASSOCIATE Cathy Liszewski NATIONAL ACCOUNT MANAGER Cathy Tracy CIRCULATION ASSISTANT Robert Harrison Copyright 2008 by PharmaLinx LLC, Titusville, NJ Printed in the U.S.A. Volume Eight, Number Three PharmaVOICE (ISSN: 1932961X) is published monthly except August and December, by PharmaLinx LLC, P.O. Box 327, Titusville, NJ 08560. Periodicals postage paid at Titusville, NJ 08560 and additional mailing offices. Postmaster: Send address changes to PharmaVOICE, P.O. Box 292345, Kettering, OH 454290345. PharmaVOICE Coverage and Distribution: Domestic subscriptions are available at $190 for one year (10 issues). Foreign subscriptions: 10 issues US$360. Contact PharmaVOICE at P.O. Box 327, Titusville, NJ 08560. Call us at 609.730.0196 or FAX your order to 609.730.0197. Contributions: PharmaVOICE is not responsible for unsolicited contributions of any type. Unless otherwise agreed in writing, PharmaVOICE retains all rights on material published in PharmaVOICE for a period of six months after publication and reprint rights after that period expires. Email: tgrom@pharmavoice.com. Change of address: Please allow six weeks for a change of address. Send your new address along with your sub scription label to PharmaVOICE, P.O. Box 292345, Kettering, OH 454290345. Call us at 800.607.4410 or FAX your change to 937.890.0221. Email: mwalsh@pharmavoice.com. IMPORTANT NOTICE: The post office will not forward copies of this magazine. PharmaVOICE is not respon sible for replacing undelivered copies due to lack of or late notification of address change. Advertising in PharmaVOICE: To advertise in Pharma VOICE please contact our Advertising Department at P.O. Box 327, Titusville, NJ 08560, or telephone us at 609.730.0196. Email: lbanket@pharmavoice.com. THE FORUM FOR THE INDUSTRY EXECUTIVE Volume 8 . Number 3 Send your letters to feedback@pharma voice.com. Please include your name, title, company, and business phone number. Letters chosen for publication may be edited for length and clarity. All submissions become the property of PharmaLinx LLC. Letters LETTER from the editor 3 PharmaVOICE M a r c h 2008 PV0308 LAYOUT_PROOFS 2/16/08 12:05 PM Page 3

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