Pharma 2020: from vision to decision

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About the Pharma 2020 series

The Pharmaceutical industry's long successful strategy of placing big bets on a few molecules, promoting them heavily and turning them into blockbusters worked well for many years, but its R&D productivity has now plummeted and the environment’s changing. PwC believes that seven major trends are reshaping the marketplace:

  • Instances of chronic disease are increasing, placing even greater pressure on already stretched healthcare budgets
  • Healthcare policy-makers and payers are increasingly mandating what doctors can prescribe
  • A growing number of healthcare payers are measuring the pharmacoeconomic performance of different medicines. A widespread use of electronic medical records will give them the data they need to insist on outcomes-based pricing
  • Boundaries between different forms of healthcare are blurring, as clinical advances render previously fatal diseases chronic and the self-medication sector expands
  • Demand for medicines is growing more rapidly in the emerging economies than the industrialized economies
  • Governments are beginning to focus on prevention rather than treatment, although they have not yet invested very much in pre-emptive measures; and
  • Regulators are becoming more cautious about approving truly innovative medicines.

These trends will compound the challenges Pharma already faces, but they’ll also provide some major opportunities.

"It was the best of the times, it was the worst of times..."

Industry challenges

Tomorrow’s challenge is to develop new medicines that can prevent or cure currently incurable diseases. Today’s challenge is to get to tomorrow – and that’s a tall order in itself.

Rising customer expectations: The commercial environment is getting harsher, as healthcare payers impose new cost constraints on healthcare providers and scrutinise the value medicines offer much more carefully. They want new therapies that are clinically and economically better than the existing alternatives, together with hard, real-world outcomes data to back any claims about a medicine’s superiority.

Poor scientific productivity: Pharma’s output has remained at a stable level for the past decade. Using the same discovering and developing processes, there’s little reason to think its productivity will suddenly soar.

Cultural sclerosis: The prevailing management culture, mental models and strategies on which the industry relies are the same ones it’s traditionally relied on, even though they’ve been eclipsed by new ways of doing business.

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Market opportunities

What decisions should you make to successfully launch into 2020? 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.

  • The global pharmaceutical market could be worth nearly $1.6 trillion by 2020
  • Demand for medicines is rising rapidly in the growth markets
  • The middle class is expandin
  • Big pharma’s using four strategies in the growth markets
  • New forms of medical intervention are in the pipeline
  • The context in which pharma operations has changed dramatically

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Explore the data

Discover the facts and figures from this report

Our interactive graphic allows you to view and compare data for each country mentioned in the report and to compare any six of them.

Data explorer

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Other articles & videos

Pharma 2020: Taxing times ahead

The fifth report in the series, it focusses on the opportunities and challenges from a tax perspective. It discusses how the political, economic, scientific and social trends currently shaping the commercial environment, together with the development of new, more collaborative business models, will exert increasing pressure on effective tax rates within the industry. It also shows how companies can adapt their strategies to support the provision of outcomes-based healthcare and remain competitive.

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Pharma 2020: Virtual R&D

Pharma 2020: Virtual R&D explores how pharma companies could dramatically improve the R&D productivity. It contents that by 2020 the R&D process may be shortened by two-thirds, success rates may dramatically increase, and clinical trial costs could be cut substantially. New computer based technologies will create a greater understanding of the biology of disease and the evolution of ‘Virtual man’ to enable researchers to predict the effects of new drug candidates before they enter human beings.

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Pharma 2020: The vision: Which path will you take?

But Pharma 2020: The Vision - Which Path Will You Take? indicates that the current pharmaceutical industry business model is both economically unsustainable and operationally incapable of acting quickly enough to produce the types of innovative treatments demanded by global markets. In order to make the most of these future growth opportunities, the industry must fundamentally change the way it operates.

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Download Pharma 2020: From vision to decision

We look at how pharma companies can reach 2020 in a position to benefit from more favourable conditions thereafter - and the most important decisions senior managers will need to make.
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Contact us

Mike Swanick
Global Pharma and Life Sciences Leader, PwC US
Tel: +1 (267) 330 6060
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Andrew Packman
Global Pharma/LS Tax Leader, PwC UK
Tel: +44 (0)189 552 2104
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Peter Kartscher
Global Pharma/LS Assurance Leaser, PwC Israel
Tel: +972 3 795 4410
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