Future Pharmaceutical Industry Trends: Long-term opportunities tempered by short-term challenges
In recent years, Pharma has begun to adapt its business model in response to growing industry constraints and the decline of the primary-care focused blockbuster therapy. This process of change has recently been disrupted by unprecedented challenges caused by the global economic downturn, and by President Obama's planned overhaul of the US healthcare system.
Pharma has begun to implement strategies to evolve from its traditional model towards a new model: Pharma 2.0; defined as a leaner, globalized entity, whose increased scale is achieved 'virtually' rather than through accretion. Pharma 2.0 is focused on targeting high-growth markets through collaboration, and 'smart' sales and marketing strategies.
President Obama's healthcare reform proposals will have a negative impact on Pharma's future growth. While the likely expansion in public healthcare to capture the estimated 15% of the US population who are uninsured will grow future drug revenues, generics companies and eventually biosimilars manufacturers will be the ultimate winners.
The industry now also faces added economic pressures, with Pharma having to implement a swathe of cost-cutting strategies. Also, due to worsening economic conditions in the US, uninsured patients are now even less able to cover the costs of their healthcare, and are making personal cost-cutting, ultimately impacting pharmaceutical sales.
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