Pharma business model faces critical challenges
Pharma 2020, a new report from PWC suggests that although global demand for medicines is growing rapidly, the pharmaceuticals industry business model is unable unsustainable because it’s simply unable to respond effectively – or rapidly – to changing market dynamics.
The report – which is summarised here and can be downloaded [personal details required] from the same web page – argues among other things that health care is shifting from treatment from prevention; the R&D process will shift to ‘live testing’ from the current lengthy approvals process; and that we are reaching the end of the ‘blockbuster’ sales model. In addition, they predict that ‘E7’ countries (the BRIC nations + Mexico, India and Turkey) could account for 20% of the pharma market, and their diseases will increasingly be those of the affluent world.
The business model issues struck a chord with me, because a couple of years ago I wrote – with my colleague Rachel Kelnar – an article applying scenarios we’d developed for Foresight (with Alister Wilson of Waverley Consultants) on Brain Science, Addiction, and Drugs to the future of the pharma industry. It struggled in all four scenarios – a sign that the industry was facing significant turbulence and would have to change its business model if it were to prosper.
That article can be downloaded below as a PDF. No personal details required.