KENYA- Business Study.ppt

Medical Device Market

Think Globally, Act Locally !!

By- Ms. Soumya Mishra

•Understanding Medical Device Market Internationally-Market Size and Growth-Economic Indicator-Market Understanding•Features & Benefits of Drug Eluting Stents•How to place YUKON CHOICE PC in market ?•Campaigns

•Competitors•Pricing & Schemes

Table of Content

Market Size Current Global Annual Revenue $ 270 bn

Market Growth 5% to 6% annually

Forecast

- Global Annual Revenue to reach $ 500bn by 2018

- CAGR to reach 6.1 % by 2017

- Medtech projected revenue growth is expected to outperform Pharma revenue growth 5% Vs 3.8% by 2018

- Research and Development spending 3-4% year on year growth

- Whereas, Regulatory affair and Quality Assurance expenses are growing 3-5 times the budget as it was 5 years ago

Global Medical Device Market

http://www.lucintel.com/reports/medical/global_medical_device_industry_2012_2017_trends_foreacast_february_2012.aspx

Top Revenue Slot Segment Market

The Cardiovascular segment is anticipated to witness growth due to an increase in the number of heart patients.

According to WHO estimates, in 2002, 16.7 million people around the globe die of cardiovascular diseases each year. This represents about 1/3 of all deaths globally

By 2020 heart disease and stroke will become the leading cause of both death and disability worldwide, with the number of fatalities projected to increase to over 20 million a year

http://www.bccresearch.com/market-research/healthcare/cardiovascular-surgical-devices-hlc076a.html

Cardio Medical Device Market

Surgical Device Type 2010 2015

Interventional Cardiac Surgery 43 36

Cardiac Rhythm Management 34 38

Traditional Cardiac Surgery 23 26

By 2015, this market will be valued at nearly $48 billion, a compound annual growth rate (CAGR) of 8.7%.

Features of Drug Eluting Stents

A drug-eluting stent (DES) is a peripheral or coronary stent (a scaffold) placed into narrowed, diseased peripheral or coronary arteries that slowly releases a drug to block cell proliferation.

Features of DES

(1) A stent with catheter-based deployment and optimized features for enhanced deliverability to the lesion site

(2) A drug-carrier vehicle that permits elution of the drug or biologic into the vessel wall at the required concentrations and kinetic profile

(3) A pharmacological agent possessing specific properties that interfere with local neointimal formation

(1) By decreasing the rate of restenosis, drug-eluting stents constitute one of the most important advances in interventional cardiology. Clinical trials have confirmed a reduction of as much as 50 to 70 percent in target lesion revascularization by DES compared to BMS.

http://circ.ahajournals.org/content/107/24/3003.full

Benefits of Drug Eluting Stents

(2) DES may be considered among patients with STEMI undergoing primary angioplasty.

http://www.ncbi.nlm.nih.gov/pubmed/19781402

(3) The reduced risk of reblocked arteries from drug-eluting stents reduces the need for repeat angioplasty procedures, which carry the risk of complications such as heart attack and stroke.

Country ProfileEconomic Indicators

History has shown that an outsider (i.e., a company not belonging to the leading corporations) may unexpectedly introduce a competitive and successful product with a lower price so that the major companies are compelled to reduce the price of their own products, triggering an overall lowering of the costs. We foresee that some of the manufacturers of new eluting-stent designs may purposely target the non-US market with lower regulatory barriers as a “profitable” field of expansion, so that the non-US patient in Europe, South America, Far East, and Africa may soon benefit from a low-priced, non–Food and Drug Administration-approved drug-eluting stent.

• Total Market Size- Pharmaceuticals: USD 659 MN in 2013

Healthcare: USD 2.07 BN in 2013

• Growth Rate-- Pharmaceuticals: 15.3% and expected CAGR of 17% (2011-2016)- Healthcare: 12.6%

Country ProfileTotal Market Size & Growth Rate

Market AnalysisDiseases in Kenya

S.No Name of Disease % Growth Rate

1 Malaria 31

2 Respiratory System 24

3 Skin Diseases 7

4 Diarrhea 4

5 Accidents 3

6 Pneumonia 3

7 Rheumatism, Joint Pain etc. 2

8 Urinary Tract Infection 2

9 Eye Infections 2

10 Dental Disorders 1

11 All other diseases 22

* Health Ministry Information System (HMIS) Annual Report 2009

Market AnalysisDiseases in Kenya- Segregation

Market AnalysisMarket Share for P’ceutical product by Therapeutic

categoryTherapeutic Category P'ceutical Products Market Share (%)

Anti-infectivesAntibiotics, antimalarial, sulphonamide, anti tuberculosis

preparation, antiamoebics, antivirals, antifungals, vaccines, sera and immunoglobulins

40

Products acting on CNS

Analgesics and antipyretics,anti-inflammatory agents, hypnotics, sedatives and tranquilize, anticonvulsants, CNS

stimuliants, muscle relaxants, antihistamines, antidepressants,

anesthetics, etc.

30

Products acting on Respiratory System

Expectorants and cough suppressants, inhalations, bronchial spasm relaxants, re

aspiratory stimulants, etc. 10

Products acting on gastrointestinal and metabolic disorder

Stomatological preparations, antacids, tonics, hepaticpreparations, laxatives, antidiarrheal, insulin preparations,

vitamins, mineral supplements, anabolic agents for system in use

10

Other Pharmaceutical Products

Products acting on the cardiovascular and genital urinary systems, cytotoxins, vaccines, dermatological preparations,

ophthalmic drugs, hormonal products, diagnostic and contraceptive agents, etc.

10

* Industrial sector Analysis Report, Ministry of health 2001

Regulatory forP’ceutical Import in Kenya

• Control of the profession of pharmacy and the trade in pharmaceutical products is administered by the Ministry of Health (MoH), through the PPB

• Kenya largely imports medicinal and pharmaceutical products from sources such as Great Britain, India, Germany, France, the USA and Switzerland

* Importers are expected to meet legal requirements, which include:

- Provide samples to the Kenya Bureau of Standards (KEBS) for quality checks and registration ƒ - Meet the regulations of the national policy, which has been adopted by the MOH

- This includes an essential drugs list, using WHO guidelines, whose objective is to promote the availability of quality pharmaceutical products at affordable prices

- Pass regulatory quality control, monitoring and market surveillance as stipulated by the Pharmacy and Poisons Board and the National Drug Quality Control laboratory

Market UnderstandingMarket Condition of Kenya

- The market for pharmaceutical products in Kenya is estimated at KShs 8 billion per annum. The government, through Kenya Medical Supplies Agency (KEMSA) is the largest purchaser of drugs manufactured both locally and imported, in the country

- It buys about 30% of the drugs in the Kenyan market through an open-tender system and distributes them to government medical institutions.

- There are about 700 registered wholesale and 1,300 retail dealers in Kenya, manned by registered pharmacists and pharmaceutical technologists. These pharmacies are accorded a 25% mark-up on retail drugs.

- Anti-infective products (chiefly antibiotics, antimalarial, sulfonamides), analgesics, antipyretics, bronchial relaxants and cytotoxins account for the bulk of government and private sector purchases of medicines in the Country.

Operational Development

Distributors

- The Kenya Medical Suppliers Agency (KEMSA), a division of the Ministry of Health, largely carries out the distribution of pharmaceutical products in Kenya. It distributes drugs to government public health facilities and private health facilities.

- It is the largest purchaser of drugs in the country, through an open-tender system and distributes them to public medical institutions. The tendering system for drugs is open to both local and foreign manufacturers and distributors.

- KEMSA has been an autonomous body since 1st July 2003. Its policy is to make available essential drugs and equipment primarily but not exclusively, to public facilities. KEMSA competes with other suppliers, e.g. the mission based medical supply facility (MEDS) and private wholesalers

Operational Development

- Pharmaceutical products in Kenya are channeled through pharmacies, chemists, health facilities and shops. There are about 700 registered wholesale and 1,300 retail dealers in Kenya, manned by registered pharmacists and pharmaceutical technologists.

- The drugs on sale in Kenya are sold according to the outlet categorization, which can be described as free-sales/OTC, pharmacy technologist dispensable, or pharmacist

dispensable/prescription only.

Retailers

Proposed Operational Strategies

• Strategic partnerships with locally-trusted stakeholders can help company navigate non-transparent elements of the market access process. In doing so, they allow companies to leverage proven channels to enter the market and reach target patient groups to optimize the go-to-market strategy.

• Collaboration with public sector payers such as the government, partnerships with NGOs and patient groups can help determine tender requirements and/or opportunities to shape them, as well as identify clinical KOLs who influence guideline development and care for particular patients.

• Among private payers, distributors and community health workers can support assessments of relevant payer channels and patient preferences to define tactics for building brand loyalty.

• Partnerships reduce risk in business operations, thus increasing sustainability of the venture. The caveat here is that any partnership can only be as good as the partner; the challenge is in establishing who is reliable and reputable

Competitor Matrix

Key Players in the industry

The key players in the industry include MNCs like

-Glaxo SmithKline-Boots Pharmaceuticals -Bayer-Pfizer-Aventis-Novartis-Astra Zeneca-Eli Lilly-Pharmacia-Roche

And local establishments like

-Dawa Pharmaceutical Ltd -Cosmos Pharmaceuticals

Product Pricing

Drug Market Pricing

The pricing structure norm for medicines is built on tradition and is supposed to allow for a 10 per cent mark-up for the drug manufacturer over production cost; a 15 per cent margin for the distributor/wholesaler over the manufacturer’s or importer’s price; and a 33 per cent margin for the retailer above the wholesale price.

Discounts and Schemes

Since the Kenyan market for medicines is open and price sensitive, some manufacturers/importers opt for different schemes of price discounting.

For example:

“Buy 10 items and get one free (10 + 1)” or “buy six and get one free (6 + 1)” are schemes offering effective discounts of 10 per cent to 16 per cent. In some cases, items are discounted by over 30 per cent at the retail outlet.

GPL- An Outlook Till Now

Currently GPL has USD 0.5 MN business and last year it was USD 1.2 MN, which was majorly the tendor business