The Essential Drug System (EDS) is one of five priorities that support the government’s overall healthcare reform objective. The impact of EDS on the pharma industry became more prominent with the release of the 2012 version of the Essential Drug List (EDL) and its supporting policies. With their exposure to EDL increasingly significant, and the government signaling an acceleration of the pace of implementation, MNCs can no longer afford to postpone confronting the implications of EDL on their growth potential and market strategy.
In a recent survey of 50 top executives from MNC pharmacos, almost two-thirds of the respondents expect the new EDL to have a negative impact on their business. Why are industry leaders so strongly of this view? Are there any opportunities among the provinces’ diverse implementation approaches? What should pharmacos do to cope with the changes, mitigate their impact, and potentially capture some upside? In this article, we offer our perspectives on the new environment, what it really means, and on the implications for MNCs.