In some respects, pharma’s never had it so good. The tools to develop remarkable new medicines are materialising, demand for its products is escalating and trade is getting easier.
Collectively the mature markets generate 59% of the total revenues but they are becoming more difficult places where to prosper. They are demanding better outcomes as a precondition for paying for new medicines. Financial pressures have played a part in hardening healthcare payers’ policies. Crushing demographic and epidemiological factors have compounded these economic woes.
Our report identifies four ways for pharma to offer more value without charging more or to prove that it can remove costs from another part of the healthcare system to make room for the higher prices it’s charging.
By 2020, the BRIC economies alone will account for 33% of the world’s GDP. Are growth markets a solution to the harsher conditions of the mature ones?
Expenditure on medicines is rising far faster in the growth economies than it is elsewhere (see chart below). But serving the growth markets is very difficult, both because of their intrinsic problems and because they vary so much. That means the industry can’t rely on its usual methods for making a profit in mature countries. It has to adopt a totally different strategy – or, rather, different strategies for each market.
Costs per molecule are still rising relentlessly and the number of new medicines reaching the market remains broadly flat. Why?
Our research suggests a distinct problem is scientific and we think three changes would make a big difference.
Poor decision-making is another major factor in pharma’s declining R&D productivity. Some of the options for companies include:
How will you change your corporate culture to address the challenges of the twenty-first century and foster innovation?
Our report covers a number of changes that industry’s senior figures can initiate including: