We are in interesting times in the life sciences industry. Amidst the turmoil of reimbursement requirement changes in all major markets, the rise of China to the second largest market in the world, digital disruption to operating models and the continuing backdrop of patent expiration on significant products in the market, pharmaceutical companies are taking bold steps to change to adapt to market needs. We see the rise of outside-in collaborative research models, targeted therapeutics, patient focused launches, integrated multi-channel customer and patient experiences, and streamlined global/local operations all taking new prominence in the core execution strategies of the modern pharmaceutical company.
Over the next few weeks I’ll share some of the key findings that emerged from our latest high performance biopharmaceutical research, now in its eighth year, which analyses the long-term performance of the 16 largest pharma companies globally, highlighting industry trends, pharmaceutical business performance analysis and potential implications for the industry.
In the last two years there has been significant positive movement forward in the industry:
Our study launched in 2013, showed a significant positive uptick in the outlook for the industry. This was compounded again in our most recent research published in January 2014.
Enterprise Value continued its recovery, up 14 percent in the first 10 months of 2013.
Nearly half of the companies in our peer set—seven out of 16—now have positive Future Value. This is up from only three companies showing a positive Future Value in last year’s study.
Recent and upcoming launches are forecast to drive up to $148 billion in growth over the next five years—higher than the $115 billion in sales lost from patent expiry.
Emerging markets are expected to contribute more than 70 percent of the global pharma market growth over the next five years.
Investor confidence in the pharma sector is strengthening, evidenced by an increased industry Future Value from -47 percent last year to -15 percent this year. However, the fact that this value is still negative shows an uphill climb still remains. While some companies struggle against the effects of the patent cliff, others are on a strong path back to growth.
Those that are leaping forward are driving growth through product launches based on scientific innovation delivered through patient outcome-driven commercial models versus diversified strategies. The evidence in our study shows consistency in the distinguishing features. We will delve into more detail in next week’s blog.
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