Earlier this year, in our annual global outlook for the life sciences industry, we said: “The life sciences sector is at an inflection point. We provide our clients with strategic and tactical solutions that are scientifically based and built upon three distinct characteristics: Expertise, Knowledge and Execution. He is currently on faculty at the Haas School of Business, where he teaches health care finance and commercialization of biotech to MBA students. Greg Reh, 2020 Global life sciences outlook, Deloitte Insights, January 10, 2020. The outlook on the pharmaceutical industry is negative, mainly due to continued pricing pressure on both branded and generic pharmaceuticals and the possibility of major debt-financed acquisitions at big pharma and biotech to address product pipelines. Between 2019 and 2024, worldwide prescription drug sales are projected to have a positive CAGR of 6.9 percent with sales expected to reach US$1.18 trillion. Leaders can incentivize the organization to take informed risks, learn quickly from failures, and rapidly scale successes. Survey respondents included individuals in the following roles: chief executive officer (CEO), chief operating officer (COO), chief commercial officer (CCO), and EVPs/VPs business/corporate development of 60 biopharma companies (~60% companies with revenue more than US$1 billion and less than US$5 billion). This pricing methodology is a system where the patient’s coinsurance depends on the price of the drug itself, as well as the price of alternative medications or therapies. [($1000-$200) x.1] 24 out of the 32 countries that belong to the EU use reference pricing in combination with other pricing regulations or by itself. View in article, David Voreacos, Katherine Chiglinsky, and Riley Griffin, “Merck cyberattack’s $1.3 billion question: Was it an act of war?,” Bloomberg, December 3, 2019. Bristol-Myers Squibb’s $74-billion acquisition of Celgene. Healthcare and pharmaceutical trends 2019 Subject: 2019 is a year of transition in healthcare and pharmaceuticals. There are fewer large project schemes coming through the pipeline. Less is more for research and development departments if pharmaceutical companies wish to stay competitive. A podcast by our professionals who share a sneak peek at life inside Deloitte. Comprehensive audit, advisory, consulting, and tax capabilities can deliver value at every step, from insight to strategy to action. The pharmaceutical industry continues its investigation of new marijuana-based therapies and the manufacturing arm must be ready to jump into the competitive market. In 2018, the pharmaceutical industry spent 3.79 billion U.S. Share of U.S. adults paying attention to commercials in 2019; Share of U.S. adults paying attention to commercials in 2019… info@pharmarg.com, Tel: (610) 924-9092 Fax: (610) 924-9339 The key is to build an organization that can thrive in today’s market, while being ever ready for the next market turn. When asked about the top issues that will have the greatest impact on their company in the next year, pharma company leaders ranked the following challenges as their biggest concerns: Changes in consumer attitudes and behavior: Consumers are changing their attitudes and behaviors in numerous ways—from increased use of technology and willingness to share data, to their interest in using tools to make decisions about prescriptions and care.5 Survey responses aligned with Deloitte’s vision of the future of health centered on the consumer—80% of respondents chose changes in consumer attitudes and behavior as an issue that will have the greatest impact on their company (figure 1). Leaders of pharma companies are in the midst of unprecedented change. View in article, Ryan Myers, Margaret Anderson, and Casey Korba, Striving to become more patient-centric in life sciences, Deloitte Insights, January 30, 2020. Find out more at https://www2.deloitte.com/us/en/industries/life-sciences-and-health-care.html. Alex Blair is a senior manager with Deloitte Consulting. Pharma leaders are particularly attuned to managing risks, sometimes at the expense of innovating the model to address market evolution. Over 233 treatments are currently under consideration, and 161 vaccines are in development as of June 2020.2 While the pandemic has created opportunities for the biopharma industry to demonstrate the industry’s value, it also has led to potential short- and long-term challenges.3. When asked about the top strategic priorities for the next five years, 63% of respondents rated R&D compared to only 43% of respondents who consider R&D as a current top priority (figure 4). Given such dynamics, pharmaceutical companies are always responding to rapid developments and challenges. The second is a text analysis of investor statements from the largest pharma companies in the last quarter of 2019 and the first quarter of 2020. Pharmaceutical Industry Trends for 2019 Trend #1: Sales growth is slowing Given the ever more daunting market access challenges to pharmaceuticals in established or developed territories, such as the US and Europe, it is hardly surprising these markets are reaching some degree of saturation. Project Team: Sarah Thomas provided oversight to the project, helped to interpret the survey findings, and edit the paper. The F… Discover Deloitte and learn more about our people and culture. We also asked companies to tell us about their top strategic priorities—although these aligned with the top issues affecting the industry, there were a few differences in emphasis; these were more about the work of the company than broader concepts such as consumerism. As pharmaceutical industry leaders look to the coming months, there will be even greater opportunities for transformative growth as the landscape continues to evolve and take shape. traditional pharmaceutical business model. January 14, 2020 ... and by 2019 it remains the world’s most valuable, having grown by 140% in list price value over the decade. Thedigital revolution and the availability of newer and improved biotechnological technologies is going to change profoundly the way medicine is practiced. M&A, leveraging digital (including AI) for transforming business, refocusing on therapeutic area strategy, and balancing new opportunity with risk are also being considered important in the next five years. The promise of cell and gene therapies is being delivered to patients; rare diseases, previously believed to be incurable, are on the precipice of real cures. Being deliberate about the intent of these hubs can support a more progressive culture that empowers those willing to march on to the next frontier. The issue is also compounded by the decrease in average peak sales per asset.9, Policy and regulatory activity: More than half of respondents listed policy and regulatory activity as a top issue. The US remains – by quite a large percentage – the world’s largest market for over-the-counter and prescription medication: it is a territory where companies can make huge profits due to the lack of regulation regarding pricing and market access when compared to other countries that have more stringent pricing regulations. Innovation starts with insight and seeing challenges in a new way. Although executives did not prioritize talent issues, it is a given that a talent strategy will be needed to fully leverage new technologies and be a digitally enabled company, either through recruitment or through partnerships. Ford holds an MBA and an MPH (public health) from UC Berkeley. © 2016 PHARMA RESOURCE GROUP, INC. All Rights Reserved. In our survey, we posed several open-ended questions to our respondents, to understand their strategic priorities in their own words. 5 Trends Impacting the 2019 Pharmaceutical Supply Chain 2019 Pharma supply chain trends focused on cost cutting, R&D and patient outcomes Increased emphasis on improving patient outcomes, reducing drug pricing and expediting drug development have put the pharmaceutical industry at odds with regulators and the patients it serves. IQVIA experts have identified ten emerging sectors to be monitored in the next five years, as they might provide a great amount of innovation. However, uncertainty remains regarding drug pricing in the world’s largest market, the United States. 1. FDA continues to accelerate development of novel therapies for COVID-19, Opportunities in China’s pharmaceutical market, Medtech leaders prioritize technology and consumers, RWE focus is shifting to R&D, early investments begin to payoff. 7 biopharma trends to watch in 2019. Toll Free: 888-991-1774, Pharma Resource Group Canada Inc. The pharma world is just one sector that is expected to reap the benefits of the AI outburst. A transformational change in R&D productivity is required to reverse this trend. Go straight to smart. Many companies have had no choice but to move many of their operations to a virtual and digitally enabled environment, ranging from trials to sales and other strategic and operational functions. Drexel Hill, PA 19026 They need an organization that will thrive in today’s market while simultaneously preparing for the next market disruption.Most pharma companies have business models that are focused on certain geographies and customers. In terms of their preparedness for these, the largest gap appeared in the area of customized treatments (only 13% felt they are very prepared). One way that companies are addressing this strategic priority is through explicit patient-centric strategies. Toronto, On M5E 1W7 COVID-19 may have accelerated investment trends for pharma companies. From a huge splash of artificial intelligence to automated machine systems, from interactive responsive UI to voice assistants, from data accuracy to high quality management systems, from eDetailing to e-services – and that isn’t the whole list of what has been achieved in recent years. Get the Deloitte Insights app. In terms of pharmaceutical drugs, pricing remains a … Pharma outlook 2019: positive factors. Increased investment in and deployment of home-based health technologies are creating new opportunities for biopharma companies to create value. Blair holds an MBA in Healthcare Management from The Wharton School, University of Pennsylvania, and a BS and MEng from Cornell University. Germany introduced this pricing system in 1989 and it quickly spread to other marketplaces around the world. Now we’re settling in to 2019 let’s take a glance at global pharma trends and what this means for the Irish Pharma sector for the year ahead. As an example of the shift towards value-based R&D, Novartis dropped nearly 20% of its 430 pharma development programs, with the company stating that it is searching for something more “transformative”. This involves research and marketing of drugs for COVID-19.”, “Looking for new and potential markets to maximize revenue. A 2019 Deloitte study points out that while biopharma companies made significant R&D investments to innovate in the last 10 years, the returns declined significantly during that same period—from 10.1% to 1.8%. From a talent perspective, conquering the next frontier will likely require new talent and organizational structures to effectively play in the world of today and tomorrow simultaneously. Those that are at concept stage are taking much longer in general to progress, with many being placed on-hold. Pharma companies’ focus on the consumer may reflect gains in information symmetry between manufacturers and plans. This article focuses only on the results for biopharma companies; insights on the results for medtech companies can be found here. Respondents chose R&D, expanding their global market presence and transformation of functions using digital and information technology as the top three priorities. See something interesting? Below is a continuation of this review with several more active areas of research added to the list, and some extended commentaries on the trends outlined above -- where relevant. Once regarded as costly gimmicks, artificial intelligence (AI) applications are rapidly becoming prime drivers of efficiency for forward-thinking pharma companies. It is, however, an issue that will likely return. Data-driven approaches have the potential to create value across manufacturing, the supply chain, and the entire health care ecosystem.”1. Biopharma companies and regulators are exploring opportunities to work together to streamline the drug development and review processes, which could lead to the emergence of new business models. He works with corporate leadership to identify market opportunities, build sustainable capabilities, and transform business and organizational models for growth. Despite this, a large number of companies have new investment at an early concept stage all the way through to approaching procurement (full details available to subscribers to our project database). While many biopharma companies are experimenting with digital, most have not yet made consistent, sustained, and bold moves to take advantage of new capabilities. He regularly works with corporate leadership to identify new market opportunities, build new organizational models for growth, and transition between business models. Devices, apps, and other services have the potential to engage consumers and support them in becoming more active in owning their own health care information and be a part of their care plan. Life sciences companies are prime targets for cyberattacks due to high revenues, extensive spend on R&D and operations, sensitive intellectual property, trade secrets, and reliance on technology.7 In 2017, a major cyberattack affected manufacturing and other operations of a large pharmaceutical company, costing US$1.3 million in losses.8, Adequate returns on innovation: More than half of respondents cited adequate return on innovation as an issue. ) selected transforming business functions market evolution at every step, from insight to strategy to.... Expense of innovating the model to address market evolution Wharton School, University of Maryland,. Research has focused on the consumer may reflect gains in information symmetry between manufacturers and plans Pennsylvania, transform... Experience in consulting, and edited the paper 0.83 % per year on leaders to,... Been possible without our survey participants both in demand and drug development prominent position Q4... 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