Definition / Scope

The Demographic, Epidemiological and Economic shifts are transforming the Pharmaceutical Market.

The population is growing and aging; new areas of Medical and Healthcare are emerging; the new set of diseases and medical conditions due Environmental Changes, Global Warming, Mutated forms of old diseases, chronic condition, due to life style and many more are Soaring.

And in present scenario the Global population is projected to rise from 6.5 Billion in 2005 to 7.6 Billion in 2020; it is also aging very rapidly; by 2020, about 714.7 million people – 9.4 % of the world’s inhabitant will be the age of 65 or more.

The complex science, long development times, the high risk of technical and commercial failures, changing regulatory and market condition, lack of Sophisticated and Automated production facilities etc are keeping the Pharmaceutical and Life-science sectors in a state of transition.

These few of N number of challenges are driving a Global shift pressurizing organizations into reviewing their core business strategies, Cost effective Technical & Commercial Innovations, the trimming of time for developments of projects and other issues.

Market Overview

A Glimpse of Health Consumers in 2020

• Health Consumers in 2020: The informed and demanding patients are now partners in their own Healthcare. Evidence in 2015: Patients are becoming more like consumers.
• Healthcare Delivery systems in 2020: The Era of Digitized Medicine: New Business models drive new ideas. Evidence in 2015: The rise of Connected Health systems and policies.
• Wearable’s and Medical Health Applications in 2020: Measuring quality of life not just the clinical indicators. Evidence in 2015: The rise of Bio – Sensing Technology.
• Big Data in 2020: Health data is pervasive: requiring new tools and provider models. Evidence in 2015: The Digital devices and electronic records contribute to data explosion.
• Regulatory Compliance and patient safety in 2020: Regulations reflect the convergence of Technology and science. Evidence in 2015: The challenges of Regulation from Technological Innovation and patient Expectations.

A Glimpse of Health Sectors in 2020

• Research and Development in 2020: The net-worked Laboratory: Partnerships and Big data amidst new scrutiny. Evidence in 2015: R&D Networks are emerging as the route to serve unmet needs.
• The Pharmaceutical Commercial Models in 2020: Local is important but with a shift from Volume to value. Evidence in 2015: The development of Enterprise Level Marketing.
• The Pharmaceutical Enterprise Configuration – the back office in 2020: Single, Global Organization responsible for insight enablement. Evidence in 2015: The move of Global Business Services (GBS)
• New Business models in emerging markets in 2020: Still Emerging, but full of creativity for the world. Evidence in 2015: The growth of emerging markets and frugal innovation.
• Impact of behaviors on corporate reputation in 2020: A new dawn of trust. Evidence in 2015: The case for improving the pharmaceutical industry’s corporate reputation.

Industry Challenges

1. Complex Worldwide Patents and Exclusivities Landscape: To be competitive, we need to fully understand our freedom to operate. Whether determined by the Innovator’s patents or those of our competitors. Knowing when generic manufacturers will target launches in all our target markets, the constraint dates are the key to unlocking forward planning and anticipating our prospective customers need before the competitors do.
2. Intense Competition: Knowing who our competitors are and where they stand will help to shift the resources and priorities to products where our strength and experience will win the day.
3. Increasingly Challenging Regulatory Environment: With Global Regulatory, cGMP and inspection regimes tightening, supply chain security is now a “Must Have” for buyers in many lucrative markets, and user’s fees are now making market entry as a costly decision. So, understanding and anticipating global shifts in regulations and their impact on our self, our customers and our competitors is paramount.
4. Changing R&D Landscape: Understanding and anticipating global shifts in R&D Budgets and their impact on our self, our customers and our competitors is paramount. Like an increasing portion of R&D budgets of both Big Pharma and small Bio-Pharma companies are going towards specialized medicines, orphan drugs and biologics.
5. Rising Customer’s Expectation: The commercial environment is getting harsher. Healthcare payers are now imposing new cost constraints on providers and are scrutinizing the value of medicines 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 are made for Drug’s Superiority.
6. Poor Scientific Productivity: Pharma’s output has flat lined for the past decade. Yet the processes we uses too discover and develop new products remain as much the same. So, there’s little reason to think its productivity will suddenly soar.
7. Cultural Sclerosis: The prevailing management culture, mental model and strategies on which the industry relies are the same ones which it’s traditionally relied on, even though they have been eclipsed by new ways of doing business.
8. Compound Crisis: Yet Pharma will not be in a strong position to capitalize on these opportunities, unless it can change its way in which it operates. Its core problem is lack of innovation in making new effective therapies for the world’s unmet medical needs.
9. External Barriers in Innovation: Pharma’s R&D processes have become so complex – even cumbersome that it is hardly surprising its productivity has tumbled. Nevertheless, several Political, Legal and Financial factors have arguably contributed to the problem.
10. Delivering Stakeholder Value: A drive for new innovation through attracting and retaining the best talent while addressing the cost management.
11. Rising Risk and Loss of Trust: Pharmaceutical Companies must win back trust; often creating the perception that we put their commercial goals above the interests of governments, prescribes and patients.
12. Low growth business environment: By the time a Drug reaches the market, an average 12 – 13 years will have elapsed since the first synthesis of the active substance.

Strategic Conclusion

By 2020, the context in which Pharma operates will be very different from that which prevails today.

And one of the recurring motifs in all the shifts we have described is Globalization:

• The globalization of markets as demand of medicine is rising in the Developed as well as Developing market;
• The globalization of R&D as a growing share of R&D migrates to Asia;
• The globalization of the regulations governing the development of new products, as national and federal agencies collaborate, and;
• The globalization of information as healthcare payers share data on the clinical and financial performances.
• The next few years may look bleak for Pharma, but the present scenario and trend suggest that the following decade will bring a golden era of renewed productivity and prosperity.

References

1. Pharma Vision 2020, by Prince Water House Coopers (Pharmaceuticals).
2. Healthcare and Life Sciences predictions 2020 by Deloitte Centre
3. From vision to decision Pharma 2020 by www.pwc.com
4. Four Challenges One Partner; Feb 2015 by Thomson Reutors.
5. Market Research for Pharmaceutical Industry by The C&W Life Sciences Sector Group.