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.
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.