On April 24, representatives from the Swedish life science industry met at the PwC headquarters, Stockholm, for a seminar on the future of pharma.
In another ten years, the pharmaceutical industry will not look the same. Major scientific and technological advances, coupled with increasing demand for medicines and trade liberalization, will revive pharma’s fortunes. But if the industry is to have a place in this transformed world, it has to be able to overcome a number of challenges. The commercial environment is becoming tougher and customer expectations are rising. Healthcare payers are imposing new cost constraints on healthcare providers. Both providers and patients are demanding therapies that are economically and clinically better than the existing alternatives, together with hard, real-world data to back any claims about a medicine’s superiority. Healthcare payers are thus sending out a clear message: more value for their money, more careful measurement of the value and less motivation to pay thousands of dollars for medicines that produce only incremental improvements in outcomes.
Another challenge is poor scientific productivity. For the last ten years, pharma’s output has plateaued. But the processes pharma uses to discover and develop new products remain more or less the same. In other words, the chance of productivity rapidly rising is less likely. A third aspect to consider is the need to rethink business strategies. Even though new ways of doing business have emerged, the industry still relies on the traditional management culture.
But with the challenges come also many possibilities. The pharma industry is going through a dualistic state of being – it has never looked more promising, or more ominous. The good news is that thanks to massive increases in processing power, advances in genetics and new data management tools, the scientific foundation on which pharma rests is improving. In addition, there is an escalating demand for medicines as the global population is increasing, we are getting older but also having more health issues. At the same time, healthcare costs everywhere keep rising. The growth markets are expanding rapidly and demanding more medicines. But they also come with challenges such as underdeveloped infrastructure, weak regulations and lower average incomes.
From vision to decision
The seminar following the same theme as the report “From vision to decision” focused on the areas requiring the most important decision-making for pharmaceutical companies in the changing life science industry with scientific, technological and socioeconomic changes. Jo Pisani, Partner, Pharmaceutical and Life Sciences, Strategy, PwC UK presented highlights from the PwC global report. During the two-hour seminar, what decisions should be taken to successfully launch into 2020 were presented and discussed. According to PwC’s Jo Pisani, some of the key strategies are to invest more in genetics and genomics, an area of study that is advancing rapidly. By 2020, PwC believes that pharma could be investing as much as 20 percent of its R&D budget in genetics and genomics for discovering and commercializing drugs. Another strategy is collaborating with academia, governmental and non-governmental organizations to get access to the best science. Providing real-world data on the outcomes a company delivers is of great importance. “Outcomes data are vital to drive change and get to market earlier,” said Pisani during the seminar.
Every company in the pharma industry will have to decide how much to invest in the growth markets, where to invest and what strategies to pursue. For example, the biggest markets might not be the most profitable ones. Furthermore, companies have to be more selective when it comes to the diseases they address, being more discriminating about the candidates they advance through the pipeline and transforming their corporate culture to foster innovation and address the needs of patients, payers and providers. The challenge for R&D is in short to deliver innovative products at low costs, embracing new technology and proving even more the health economic benefits.
Review your strategy
After the seminar, there were several questions from the audience. One was the issue of how to get more contact with patients, as this is not always something that is approved by authorities. One possibility of overcoming this, suggested by Pisani, is collaborating to a greater extent with third parties that could help facilitate anonymity for patients. When Nordic Life Science Review had a quick chat with Jo Pisani after the seminar, she again highlighted the importance for life science companies to reviewing their strategies to be innovative, economic and focused on patients, in order to survive in the changing life science industry.
“It is all about harnessing your company’s skills within innovation, getting cost-effective and going more and more towards patient-oriented healthcare. As for the Nordic countries, they all have had a good reputation in qualitative research and for being successful within life science. In order for Nordic life science companies to stay strong I think it is vital to review the possibilities of expanding their brand even more and working with a global outlook.”