Sustainable cost reduction

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It is accepted knowledge that the pressure to control and reduce costs is one of the next major challenges to be faced by the pharmaceutical industry. Increasing generic competition, imminent patent expiries (revenue can decrease by up to 60% at patent expiry), shorter pipelines and the emergence of China as a low cost manufacturing base, all contribute to constantly eroding margins. To maintain or increase margins in the future, pharmaceutical and life sciences companies have to start taking a proactive approach immediately to understanding costs. As the pharmaceutical industry embraces these new challenges, the companies that emerge at the forefront will be those that address the issues now and are able to account for all the costs throughout their organisation. To achieve this advantage, companies have to start recognising and targeting costs today.