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May 07, 2015
Pharmaceutical innovation: The return to growth forecast
By: Anne O'Riordan

Pharmaceutical industry growth is forecast to return in 2016, with the High Performers expecting to see significantly higher growth than their peers.

The peer group studied in our research saw steadily slowing growth in the 2000’s, before a period of decline over the last four years, prompted by the onset of the patent cliff in 2011. Latest analyst forecasts suggest this negative growth is expected to continue in 2015, before a rapid return to growth in 2016 (3.1 percent), sustained over the next five years at a 2015-2019 CAGR forecast of 2.3 percent. It’s worth noting that the peer group forecast growth is below the Global Pharmaceutical Industry forecast rate of 4-7 percent, owing to much of the growth forecast deriving from the small-mid cap players, including those in emerging markets.

However growth is polarized between High Performers with new science based innovation growth, and the rest at various points seeking a path back to sustainable growth. The High Performers are expected to see an average 6.5 percent growth rate in 2016 versus average of only 1.3 percent for the rest. Furthermore, the average 5-year 2015-2019 CAGR forecast for the High Performers stands at 4.7 percent, versus average of only 1.1 percent for the rest.


The High Performers have been pulling away from the rest of the pack over the last year or so. In the research, we show their latest financial performance ranking (based on the last seven years) versus their growth forecast over the 2014-2017 4-year recent and short term period, and it shows the degree of separation forming between companies.

Beyond the short term, the companies that sustain high performance in the sector, will be those that can drive operational change to keep pace with innovation. The challenge ahead will be turning science into value, by developing new operating models that can deliver on the commercial promise of new launches in a rapidly changing healthcare economy.

For more information on these findings, please read our latest High Performance Business Research: Turning Science Into Value: Biopharmaceutical Companies That Focus on Patient Outcomes are Finding Commercial Success.

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