While the biggest players are focusing on diversification, more nimble companies are looking for a niche in which to position themselves.
Multinationals such as Novo Nordisk and Lundbeck have chosen to focus on diabetes and central nervous system (CNS) diseases, respectively. They are prime examples of how specialization has led companies to achieve stronger positioning in the market. For instance, the vision of Lundbeck Philippines is “to become the world leader in psychiatry and neurology,” while its mission is “to improve the quality of life for people suffering from psychiatric and neurologic disorders,” says Joan Alvarez, country manager of Lundbeck Philippines. To achieve this result, the company has to overcome some challenges, namely the social stigmas surrounding CNS, and low patient compliance due to high medicine prices and a lack of reimbursement.
In the case of Lundbeck, specialization has proven a more successful strategy than diversification. In the words of Alvarez, “While everybody else is into diversification, we remain focused on CNS, which is believed to lead to the largest amount of debilitating disorder cases by the year 2020.” In addition to a number of drugs that will be launched in the next three years, Lundbeck has recently signed an agreement with Teva Pharmaceutical Industries for the Parkinson’s disease drug Azilect®, which will allow the company to further strengthen its position in the Philippines, and eventually become the preferred CNS provider in the industry.
A specialization strategy has also been adopted by some distributors. For example, Phoenix Pharmaceuticals specializes in distributing steroids, while GenAsia Biotech focuses on orphan drugs. For these distributors, specialization allows them to succeed in a market in which 85% of distribution is concentrated in the hands of the two leaders, Zuellig Pharma and Metro Drug—and where specialization is the best way to compete.
