#pharma industry trends
Trends Within the Pharma Industry
The post-World War II era was a golden age for the pharmaceutical industry. Large pharmaceutical companies such as Merck and Eli Lilly churned out new antibiotics, vaccines, and medications at an astonishing rate that radically changed people s lives for the better. Today, however, innovation in the pharmaceutical industry is very different. Tighter regulations, expiring patents, and the growth in genomics have all impacted the industry. Pharma is expected to be a $1.2 trillion industry by 2017; here s a look at the biggest trends shaping the coming years.
Emerging Markets Will Drive Innovation
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With the flattening of growth in pharma sales in developed countries, drug makers are increasingly looking to emerging markets for new sources of growth and revenue. According to PriceWaterhouseCooper, emerging markets will account for over 30 percent of the global market sales volume by 2016. This means pharmaceutical companies will focus on global competencies with strategies tailored for local markets in order to stay competitive.
Additionally, the health issues facing the people in emerging markets will shape research and development. Six Middle Eastern countries rank in the top 20 globally in terms of prevalence of type II diabetes, for example, focusing R D efforts in those markets toward treatment for that disease.
Increased Conflict Between Affordability and Access
The trend toward cost containment in health care is driving heated debate about access to costly drug treatments. Healthcare executives are increasingly involved in formulary decisions. Pharmaceutical companies will need to provide more evidence-based data on health outcomes to justify a particular therapy or medication. Value needs to be communicated to all stakeholders: Insurers, healthcare providers, and patients. Collaboration between bioinformaticists and marketing is necessary to develop marketing materials designed for each audience, focusing on evidence and positive health outcomes.
Mergers and Acquisitions Will Continue to Increase
Mergers and acquisitions have shaped the pharmaceutical industry in more prominent ways than other industries. This is because the pharma industry is high-risk; few products actually make it to market, and fewer still recoup the cost of R D. In the first half of 2014 alone, pharma M As reached $317 billion. The focus of mergers and acquisitions will change, too, from accumulating a large portfolio of products to concentrating on areas of strength and shedding areas of weakness. A recent example of this is GlaxoSmithKline s (GSK) asset swap with Novartis, which strengthened GSK s vaccine position and reinforced Novartis s prominence in cancer drugs.
More Tech Innovations/Investment in Manufacturing Processes
The FDA s Current Good Manufacturing Practices (CGMP) guidelines will require additional investments in technology and IT to reduce costs, increase flexibility, adapt to new regulations, and streamline the process from R D to manufacturing. Process Analytical Technology (PAT), product lifecycle management tools, and Quality by Design (QbD) technology helps companies prepare for live licensing and reduce business risks and overall development and manufacturing costs. Given the rapidly evolving regulatory framework, these tech investments become even more important for agile responses.
The pharma industry is poised for significant change in the coming decades. For today s savvy pharma executives, these are the trends to watch.