WSJ examines pharmaceutical companies expansion into developing countries

Jul 7 2009

The Wall Street Journal examines the "strategic shift in the $770 billion pharmaceutical industry to target the working poor in the developing world" through the eyes of a Pfizer pharmaceutical representative working in the slums overlooking Caracas, Venezuela.

The newspaper writes: "For the first time in a half-century, sales of prescription drugs are forecast to decline this year in the U.S., historically the industry's biggest and most profitable market … As a result, developing countries … have begun to look more attractive to the industry."

Pfizer has expanded into China, India, Brazil, Russia and Turkey. GlaxoSmithKline, Novartis and Sanofi-Aventis are also expanding their focus on sales to developing countries. Pfizer, which "brought in $1.4 billion in sales from emerging markets in the first quarter of this year," is benefiting from a belief in Venezuela and in much of the developing world that branded medicines are worth paying a premium for because they're safer and more effective than generics," yet cost 40 to 50 percent more, the newspaper writes. Still, "[s]ome public-health officials question whether Pfizer is promoting what they say is an unfounded perception that generic drugs aren't trustworthy."

"Pfizer says the problem with generics in Venezuela is that laws requiring them to be equivalent to brand-name versions aren't uniformly enforced" and "up to 30 percent of drugs sold in the developing world are counterfeit and may not be effective." To help mitigate costs, Pfizer offers discounts to doctors. The Wall Street Journal writes that Pfizer's "program in Venezuela is an exercise in how to reduce prices enough to attract poorer customers while still turning a profit."

The article also details Pfizer's offers of free computers and internet for doctors, creating the opportunity for them to practice telemedicine. "Pfizer says the computers start out as loans and become permanent gifts once the doctors have shown that they are using them for medical purposes and have signed a waiver stating they understand they're not intended to influence their prescribing," the newspaper writes.

Carlos Serrano, a Venezuelan doctor featured in the article whose office is set to receive a refurbishment by Pfizer later this month, "says he's increased by 40 percent the number of Pfizer drugs he prescribes since" being contacted by the local Pfizer representative, but says he has not been influenced by the aid he's received from the company. "There are some illnesses that have to be treated with a good product, no matter what the cost," Serrano said (Johnson, 7/7).