The leading pharmaceutical companies are expected to lose between 14% and 41% of their existing revenues as a result of patent expiries prior to 2012. In 2007, the US Food and Drug Administration approved only 19 new molecular entities and biologics, a smaller number than at anytime since 1983 (see Pharma 2020: The vision ). Generic manufacturers present substantial threats to revenue growth for the ethical producers, as they continue to enter the market with ever-increasing efficiency.
Another trend facing the industry is the colossal financial burden of product promotion, which is bearing less fruit per dollar spent. With declining productivity, sales-force effectiveness is high on the agenda for all pharma companies.
Increasing budgetary demands, growing population longevity and the mounting burden of chronic disease are placing further stresses on healthcare systems, and leading to increasing activism by payers who are insisting on tighter product performance criteria before funding new treatments. Thus an increased focus on healthcare economics is essential for companies to succeed.
The putative genomics and proteomics based drug explosion, much anticipated after the completion of the Human Genome Project, has not yet materialised. While the Project opened up the possibility of developing drugs based on individuals’ genetic codes, the complexity of the task at hand suggests that it will take a number of years before the promise of personalised medicine can truly delivers on its original promise. Nevertheless, a major inclination of numerous companies in recent years has been towards the biologics arena, with many acquiring biologics trophies to secure expertise or capacity.
The virtues of a biologics capability are regularly lauded, with the tide turning towards specialty drugs. Nonetheless, if they intend to fully develop a product based on patient outcomes, companies will need to embrace not only biologics but other new technologies as well, including nanotechnology and information systems.
In the short term, organisations can consider the following steps to maximise revenue growth: