Like all major mature markets, the pharmaceutical industry is facing big changes that are playing havoc with productivity and profits. A new analysis released Thursday aims to help pharma usher in a new era of prosperity.
“Pharma 2020: From vision to decision” is the culmination of a five-year, in-depth assessment of the industry by PwC. The report details the industry’s challenges – things like declines in innovation, more burdensome regulations and difficult market conditions, the fragmentation of the global market and the ever-rising cost of healthcare – as well as its opportunities – improved, cheaper technologies for collecting biological data and for synthesizing and analyzing that data, a greater demand for medicines and the removal of many barriers to free trade.
But it’s main purpose is to offer a blueprint on what the industry has to do if it wants to create a new “golden era” by 2020. Among the to-dos:
- Dump the cloak of secrecy. Pharmaceutical companies will have to be transparent, open and honest.
- Collaborate. To get access to the best science and eliminate waste, companies will have to form partnerships with academia, governmental and non-governmental organizations and other life sciences companies and stakeholders.
- Be picky. Companies will need to be selective about which diseases it addresses and investing in new treatment types.
- Invest more in genetics and genomics and revise research and development processes to improve scientific productivity.
Companies in the pharmaceutical industry are already doing some of the things recommended in the PwC report, like collaborating with partners in the scientific and medical ecosystem, said Matthew Bennett, senior vice president of Pharmaceutical Research and Manufacturers of America (PhRMA), a member organization representing pharmaceutical and biotechnology companies.
But where the PwC report focuses on changes the industry can make from within, Bennett looks to forces outside the industry – specifically policy makers – as needing to be supportive of the work the industry does in order for it to continue to innovate and help lower healthcare costs and save lives through pharmacological treatments.
“The biopharmaceutical pipeline is robust – with more than 3,200 medicines in development – and as the most R&D intensive sector, our industry helps solidify the U.S. as a beacon of innovation and hope,” Bennett said in an email to Healthcare Finance News. “But to help ensure that the U.S. remains the world leader in medical innovation, a consistent pro-innovation policy framework must be in place that provides regulatory certainty, ensures patient choice and access to medicines and incentivizes future research and development.”
While Bennett emphasizes a future for pharma dependent on policies, Todd Evans, director of PwC’s Health Industries Advisory pharma life sciences practice, said the industry’s most important focus needs to be on changing the culture from within the industry.
“We grew up by defining a culture that industrialized a model that treated the entire marketplace in a very standardized way appropriate to a therapy, appropriate to a disease, and in so doing had a great deal of efficiency, if you will, and effectiveness. It was tremendous,” said Evans. But the industry’s formerly successful homogeneity will not flourish in the new reality of an increasingly fragmented global market.
Companies in the industry are willing to change, Evans said, “because they recognize that the goalposts of success have indeed been moving to a very different place.” How able companies are to make the needed changes is another thing.
“I think the very mature companies have a much bigger change challenge because they have established, kind of, institutional knowledge, capability and expectations that have to be shifted, whereas if you’re a relatively young company with very limited market experience, you can come out of the gate with a brand new model without having to change a whole lot of things,” he said.
“There’s a lot of will (to change) in a lot of places,” Evans continued. “Converting that into action – vision to decision – is really where the slope of change becomes important. The more you have to change, the tougher it is to do. The prerequisite is: can you afford not to change?”