Outlook on Pharma: What the Next Five Years Will Bring

Major shifts are happening in the pharmaceutical industry and healthcare that will bring changes over the next 5 years. Increased pressure for value- and outcome-based pricing, patient-centric drug development, a broader focus on prevention, and navigating emerging markets will necessitate changes to current business models.

In a recent pharma industry report, KPMG cautions: “Only through a complete organizational transformation can today’s leading companies maintain influence and earnings.”[1] Gone are the days of discovering and distributing innovative new drugs, marketing them aggressively and seeing record-breaking sales.[2] However, even in the face of disruptive change, the global prescription drug market is still expecting to see 6% growth over the next 5 years, reaching $1.2 trillion by 2024.[3]

The following are highlights of what to expect over the next five years:

Pricing

Payers are increasingly measuring the pharmacoeconomic performance of therapies. Payers will push for outcomes-based or pay-for-performance pricing and demand real-world data to back claims about a medicine’s superiority.[2] Electronic medical records will provide the data needed to determine the best therapies and eliminate the more expensive or less effective ones. Value for money will be the focus, and proof that a drug is better than its alternatives will be vital to ensuring its future.

Innovation

While payers direct their support to treatments based on outcomes, there will also be a call for more patient-focused drug development. Doing this at a reasonable cost and demonstrating value to an increasing number of stakeholders – from payers to patients – will bring challenges as well as opportunities to the pharma industry.

AI and ML

Artificial intelligence (AI) and machine learning (ML) will become more mainstream in healthcare, proving especially effective in clinical research. As the sheer volume of data in clinical trials balloons, AI will need to be leveraged for pharmacovigilance.[4] AI and ML will further develop human and machine interaction, most notably in the form of wearables, and AI will gain traction in drug discovery and risk analytics.[5]

Prevention vs. Treatment

Governments will focus more heavily on promoting prevention rather than treatment.[2] This change will present opportunities for pharma to go deeper into patient health management.

Self-medication

The self-medication market will continue to increase as more prescribed products are moved to over-the-counter status.[6] Along with this shift will come the need for more drug information to be delivered directly to patients. Home delivery will also continue to rise to meet the needs of the self-medication market.

Access to Medicine and Affordability

The WHO states, “An ‘affordable and fair’ price is one that can reasonably be funded by patients and health budgets and simultaneously sustains research and development, production and distribution within a country.”[7] Access to therapies will continue to be an issue over the next 5 years. Medicines Patent Pool Executive Director, Charles Gore of Switzerland, comments: “It will become unacceptable to have a first world and a third world when a drug is launched.”[8] Ensuring access to medicines in low- and middle-income countries (LMICs) will continue to be in the news in the bid to fight healthcare access disparity.

New Business Models/Emerging Markets

Mature markets collectively generate 59% of total pharmaceutical revenues, but they are becoming more difficult places in which pharma companies can prosper.[2] While demand for drugs is growing at a rapid pace in emerging markets, these markets are highly varied and present their own challenges. PWC notes that individual developing nations have “very different clinical and economic characteristics, healthcare systems and attitudes toward the protection of intellectual property.”[6] To serve these markets, pharma companies will need to be able to adapt and devise strategies that will meet their unique needs.

Asia’s Influence

Emerging markets are currently contributing 20-30% of the pharma industry’s value, and Forbes predicts the “innovation pipeline” will start to flow from East to West.[9] Global drug and device companies are increasingly tailoring new products to Asian marketplaces, people and lifestyles. Up to 10% of healthcare R&D will be invested in innovation for emerging Asian markets in this year alone, due to aging populations, increasing demand for healthcare and rising income levels.[9]

Genetics Data and Genetic Markers

The first genome was mapped in 2005, and today it is common practice.[4] Entire populations can be identified as having a certain genetic marker with a higher efficacy rate for a certain drug. Going forward, pharma companies can target these populations for precision clinical trials, helping them gather the data they need to complete trials and get drugs to market faster.[4]

3D Printing

3D printing is opening up new ways to manufacture cell and tissue products.[10] Tests will be routinely run on 3D printed tissues instead of on animals or humans. 3D printing can also potentially lower costs of manufacturing drugs, while increasing speed and flexibility of production.[10]

Orphan Drugs

Companies will increasingly include rare disease drugs in their portfolios. These treatments are expensive, occupy a less competitive space in the marketplace and bring in large profits.[11] The next 5 years will see breakthroughs in treatments for rare conditions.

Targeted Prevention

In the coming years, we should not only expect more targeted therapies, but also targeted prevention, as increased access to data and groundbreaking new therapies will enable practitioners to predict and prevent a patient having a disease or health condition.[1]

Over the next 5 years and beyond, disruptive forces will bring new challenges and fresh business opportunities to pharmaceutical companies. At Six Degrees Medical we understand that major shifts are happening in the industry, and our knowledge base and solutions are evolving with them. Leading pharmaceutical companies around the world rely on Six Degrees Medical for insights that translate into customized medical and scientific communications tailored to suit client-specific objectives. Click here to learn more.

[1] KPMG, “Pharma outlook 2030: From evolution to revolution”,  https://advisory.kpmg.us/content/dam/institutes/en/healthcare-life-sciences/pdfs/2017/pharma-outlook-2030-from-evolution-to-revolution.pdf

[2] PWC, “Pharma 2020: From Vision to Decision”, https://www.pwc.com/gx/en/industries/pharmaceuticals-life-sciences/publications/pharma-2020.html

[3] EvaluatePharma, “World Preview 2018, Outlook to 2024”, http://info.evaluategroup.com/rs/607-YGS-364/images/WP2018.pdf

[4] European Pharmaceutical Manufacturer Magazine, “Predictions for pharma in 2019”, https://www.epmmagazine.com/opinion/predictions-for-pharma-in-2019/

[5] Forbes, “Top 8 Healthcare Predictions for 2019”, https://www.forbes.com/sites/reenitadas/2018/11/13/top-8-healthcare-predictions-for-2019/#7bdce41d700e

[6] PWC, “Pharma 2020: Marketing the future”, https://www.pwc.com/gx/en/industries/pharmaceuticals-life-sciences/publications/pharma-2020/pharma-2020-marketing-the-future-which-path-will-you-take.html

[7] WHO, “Medicines Pricing and Financing”,  https://www.who.int/medicines/areas/access/en/

[8] Pharmaphorum, “Ensuring access to medicines is good for everyone – pharma included”, https://pharmaphorum.com/views-analysis-market-access/ensuring-access-medicines/

[9] Forbes, “Top 8 Healthcare Predictions for 2019”, https://www.forbes.com/sites/reenitadas/2018/11/13/top-8-healthcare-predictions-for-2019/#7bdce41d700e

[10] Deloitte, “2018 Global life sciences outlook”, https://www2.deloitte.com/content/dam/Deloitte/global/Documents/Life-Sciences-Health-Care/gx-lshc-ls-outlook-2018.pdf

[11] Zacks, “Zacks 5 Top Drug/Biotech Merger & Acquisition Targets for 2019”, https://www.zacks.com/stock/news/342034/5-top-drugbiotech-merger-amp-acquisition-targets-for-2019

February 26th, 2019|Categories: Articles|