Opportunities and Responsibilities in a TPP World

This has been the year of international trade agreements. President Obama won fast-track authority from Congress, allowing him to push forward on the Trans-Pacific Partnership (TPP), a somewhat secretive trade deal involving 12 Pacific Rim nations. Together, these countries generate 40% of the global economy. Last week, WTO negotiators from 54 nations agreed to drop tariffs on 200 technology products, which have a collective annual trade value of $1 trillion. And in Africa, three eastern and southern trade blocs moved to create a united Tripartite Free Trade Area, which will lower tariffs and streamline travel and development policies for 625 million people in 26 African nations (with a combined GDP of over $1 trillion).

Regional trade agreements have some clear benefits: lower tariffs, expanded markets, consumer and worker safeguards, IP protections, and the promise of more trade and transportation jobs in participating countries. More manufacturing jobs in low-income countries generally lead to higher incomes and a higher standard of living. However, trade agreements also have downsides. Gains in manufacturing jobs in some countries are offset by losses in others. And new jobs are not necessarily protected by fair labor laws. IP protection can keep costs high, a particular concern for life-saving medicines. And at a recent gathering at Wilton Park in the UK, some experts argued that the high level of trade and movement between Guinea, Liberia, and Sierra Leone probably contributed to the spread of Ebola last fall.

President Obama will argue the TPP will increase exports and benefit US companies, workers, and consumers. And there is some truth to this narrative: past trade agreements greased the wheels of economic growth in Asia and Latin America, creating a billion potential buyers who now shop for Nautica Kids clothing on their iPhones. But analysts look at the effects on specific sectors, and both the TPP and the new WTO deals suggest pharmaceutical, software, and media companies have the most to gain. Companies in these industries can re-align their strategies and investments for a post-TPP world of lower tariffs, stronger IP protections, and larger addressable markets in Vietnam, Malaysia, Mexico, Chile and Peru. However, these favorable terms also come with responsibilities. Pharmaceutical firms will have to demonstrate commitments to ensuring access to affordable, high-quality medicines in developing countries. This may include partnerships with governments and generic producers, or investment in tech-enabled supply chain solutions that deliver quality medicines, reduce stock-outs, and increase compliance. Investing in equitable access is not just a CSR play, it is a long-term business strategy to capture tomorrow's customers.

Fighting the Health War on Two Fronts

As any student of history will tell you, the surest way to lose a war is to fight on two fronts. For decades, developing countries have been fighting a war against persistent poverty, famine, and disaster-related illnesses like cholera and diarrhea. Resources were stretched to the breaking point in many countries as they struggled to build a health system that is responsive to a well-established set of health problems. So it probably came as welcome relief when economic fortunes turned rosy, and developing-country governments could allocate more resources to infrastructure and public services like health and education. Until, of course, the spoils of rapid economic development began to spoil.

Health systems across the developing world are suddenly dealing with a range of health issues that hitched a ride with prosperity: diabetes, hypertension, obesity, and heart disease - to name only a few. It turns out that a sedentary fast-food lifestyle is as unhealthy for the Chinese as it is for Americans. In fact, the Overseas Development Institute, a UK-based think tank, calculated that the number of overweight and obese people in developing countries has quadrupled to one billion people in only 30 years.

In newly prosperous countries, this is not a transition; it's an addition to the normal roster of water-borne and tropical diseases which are still thriving in remote, rural areas. The opening of a new, unfamiliar front in the health war presents opportunities for both the development community and the private sector (e.g., pharma). With many years of data on the long-term cost of chronic diseases in developed countries, there is a compelling argument for even modest investment in nutrition, wellness and preventative programs. Such modern illnesses can by addressed by mobile-based information campaigns, digital reminders, and remote reporting and diagnostics. It's not very sporting to capitalize on another's misfortune. But mature-market providers can chalk it up to helping the new kids learn from past mistakes, and giving them a fighting chance in a historically uphill battle.

Analytics in a Changing Landscape

Analyzing data in emerging markets used to be fairly easy. Of course, that's because there were little or no data to analyze. But those days are pretty much over. The bleak landscape of reliable data on customers and markets in developing countries has bloomed like a flooded desert. And today, new data are being captured through government and business information systems, mobile phones, social networks, and retail transaction systems. With two-thirds of its growth expected to come from emerging markets in coming years, perhaps no other industry stands to benefit more from rigorous data analytics in emerging markets than Pharma.

The pharmaceutical industry can benefit from solid analysis at every stage of the value chain. For instance, disease tracking data support the discovery and development of new therapies. Remote data collection and diagnostic or treatment support can aid clinical investigations and help companies understand how health workers and patients manage health and disease. Improved analysis can help companies segment diverse global customers and devise localized pricing, packaging, and educational programs. Once products are in the field, data can be mined to make improvements in the supply chain, patient education, and communication or training for health workers.

If applied creatively and skillfully, data analytics could help pharmaceutical companies move past the role of pill manufacturer and toward the business of providing personalized health services. As data grow and become more accessible, the time is ripe for pharmaceutical companies to develop and apply new tools that enhance the care experience (and grow their business). This will require evaluation and prioritization of areas where data can bring the most value, and then a clear plan of action to implement the technical and analytical systems to capture, analyze, and integrate that data. With agility and a business-driven focus on quality data analytics, pharmaceutical companies will discover the value of making medicine from desert flowers.