Pharmaceuticals & life sciences

Key stakeholders have a big influence

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of pharmaceuticals & life sciences CEOs say customers and clients are influencing their business strategy.

Balancing the needs of patients and society
Pharmaceuticals & life sciences companies need to respond to patients’ needs; but they need to understand and cope with the expectations of governments and regulators too. The CEOs in our survey understand this balancing act; 94% say customers and clients are influencing their strategy and the same number say they take governments and regulators into account.

Getting leaner
With governments and payers around the world looking to cut healthcare costs, pharmaceuticals & life sciences CEOs are acutely aware of the need to trim the fat. Four out of five sector CEOs say they’ve cut costs this year and the same plan to do so in the coming twelve months. Operational efficiency is at the top of their list of investment priorities. And 37% are looking to outsource key processes.

Even a recession-proof industry has its problems
There are signs that pharmaceuticals & life sciences CEOs see their industry as more resilient in the face of recession. Fewer are worried about issues like uncertain economic growth and fewer see a recession in the US as having a negative impact. But there’s one big cloud on the horizon – government responses to debt and fiscal deficits. Nearly half of sector CEOs worry that they could put the damper on growth.

Reaching out to customers in new ways
Governments and payers aren’t the only ones looking for a bargain. In our Pharma 2020 series we’ve found that patients want more for less too. That’s true both in mature countries concerned by soaring healthcare bills and in growth countries where household incomes are still relatively low.

Pharmaceuticals & life sciences CEOs are responding – 81% are beefing up efforts to engage with customers. And they’re finding new ways to do it. We’ve seen some companies starting to reach out directly to patients to better understand how their medicines work in real-life settings.

Walking the regulation high-wire
There are other hurdles set by the government too. The most concerning is over-regulation – 73% of pharmaceuticals and life sciences CEOs think it could pose a threat to growth. To get a new drug approved, pharmaceuticals companies need to navigate a whole series of regulatory hurdles. Getting it wrong can mean big penalties. And with big data offering the potential for a much better understanding of patient populations, the whole process may change radically in the future. Here, too, pharmaceuticals & life sciences CEOs are reaching out. Four out of five are increasing their efforts to engage with governments and regulators.

Lots of reasons for looking to China
With populations getting bigger and becoming wealthier in growth markets, the need for the industry’s products is growing. China tops the list of countries where pharmaceuticals and life sciences companies expect to see increases this year. The top reason is to grow the customer base, but that’s far from the only objective. While one-third of sector CEOs plan to build manufacturing capacity in China, even more (44%) are looking to build both R&D and innovation capacity and internal service delivery capacity. All told, 62% of pharmaceuticals and life sciences CEOs see accessing the local talent base in China as a key objective, compared to just 43% of CEOs overall.

The US and Brazil are key locations too
CEOs across our total sample are placing a lot more faith in growth at home than abroad. Not so for pharmaceuticals and life sciences, where existing foreign marketers are nearly as important as domestic ones. After China, the US and Brazil stand out as countries where CEOs are expecting growth.

Investing in innovation
In our new Pharma 2020 report, we look in detail at some of the challenges the sector is facing in managing its innovation process. We believe that companies will need to get much more selective about the molecules in their pipeline. They’ll also need to consider exciting new areas of research, like genomics, man/machine interfaces, regenerative medicine and vaccines for chronic conditions. However they approach innovation and R&D, it will continue to be a focus – 46% rank it as a top investment priority.

CEO interview quotes

"People always tend to think that a tough economic situation is the sign of a “new normal”; and, conversely, that a robust world economy will last forever. But economic conditions always alternate. It’s more useful to view things over the long-term; tough economic times will eventually be followed by a period of growth."

Yasuchika Hasegawa
President and Chief Executive Officer of Takeda Pharmaceutical Company Ltd.

"My own view is that Asia and Africa are going to be key drivers of future global growth. In Asia, people will be living longer and healthier lives. In that sense, Asia in the coming years will be experiencing a “healthcare explosion”, as opposed to a population explosion. ..."

Yasuchika Hasegawa
President and Chief Executive Officer of Takeda Pharmaceutical Company Ltd.

"Looking ahead, it’s also clear that the future of our company lies in the developing world. About 70% of the pharmaceutical industry’s growth now comes from the emerging economies. So the question for us is, how are we going to build a market presence in the emerging world and how are we going to build an infrastructure to get our products delivered there?"

Yasuchika Hasegawa
President and Chief Executive Officer of Takeda Pharmaceutical Company Ltd.

"Success depends upon our capacity to innovate new products. Unfortunately, in my view, the pharmaceutical industry is hitting the wall in terms of product innovation. Currently, products based on low-molecular-compound technology account for over 80% of the products coming out of the pharmaceutical industry. But this technology has limits in terms of efficacy …"

Yasuchika Hasegawa
President and Chief Executive Officer of Takeda Pharmaceutical Company Ltd.

"R&D in the pharmaceutical industry is gradually shifting toward the development of high-molecular compound products. … Clearly, from the point of corporate strategy it is extremely important that we become one of the leaders in new technologies such as high-molecular compound technology."

Yasuchika Hasegawa
President and Chief Executive Officer of Takeda Pharmaceutical Company Ltd.

"If we look around the world, there are public research laboratories, universities, and government research organizations which collectively have about a million people doing research in many different kinds of cutting-edge technology. It’s vital that we track their progress so that we are able to obtain rights to the most promising new research coming out of the public sector."

Yasuchika Hasegawa
President and Chief Executive Officer of Takeda Pharmaceutical Company Ltd.

"Our core strategy revolves around the question of how we can go about finding and recruiting top talent from around the world and provide them with the kind of work environment that will maintain their interest and reinforce their morale."

Yasuchika Hasegawa
President and Chief Executive Officer of Takeda Pharmaceutical Company Ltd.
These interviews contain the opinions and views of the CEOs interviewed, and do not necessarily represent the opinions and views of PwC.


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