The Future of Pharma: Evolutionary Threats and Opportunities

Pharma's Future: Evolutionary Threats and Opportunities

The pharmaceutical industry is one of the world's most important and prominent industries, supplying crucial medicines and health services to billions of people. However, as it adjusts to changing social, technological, and competitive circumstances, the industry is experiencing unprecedented difficulties and uncertainty. In this post, we will look at some of the important themes and concerns driving the future of pharmaceuticals, as well as how the industry might adapt to them.

A Stagnant Industry

The pharmaceutical sector has a long history of success, profitability, and invention, producing groundbreaking medicines for a wide range of diseases and situations. However, the business has exhibited symptoms of weakening and losing pace in recent years. The following are some of the variables that have contributed to this decline:

• Many blockbuster pharmaceuticals have lost or will soon lose their patent protection, exposing them to generic competition and decreasing their earnings. According to a Deloitte1 research, the top 12 pharmaceutical companies lost $17 billion in revenue owing to patent expirations in 2019, and another $121 billion is estimated to be lost between 2020 and 2024.
• R&D productivity has deteriorated as the cost and complexity of generating new pharmaceuticals have risen, while the success rate and return on investment have fallen. According to Deloitte1, the average cost per new drug released by the top 12 pharmaceutical firms increased from $1.188 billion in 2010 to $2.168 billion in 2019, while the average peak sales per asset decreased from $816 million to $407 million during the same period.
• Regulatory pressures: The pharmaceutical regulatory environment has become more stringent and unpredictable, with greater criteria for safety, efficacy, and quality, as well as increased scrutiny over pricing, reimbursement, and market access. Pharma businesses must handle various and frequently conflicting rules across multiple regions and nations, increasing operational costs and hazards.
• Market dynamics: As new entrants such as biotech startups, generics manufacturers, digital health firms, and tech behemoths challenge the old pharma business model, the pharmaceutical market has become more diversified and competitive. Simultaneously, the client base has evolved, with more empowered and knowledgeable customers wanting greater access, convenience, and customisation from their health care providers.

A Growing Industry

To prosper and survive in this difficult environment, the pharmaceutical business must undergo profound transformation, adjusting to the changing demands and expectations of its stakeholders. Among the primary factors of this transition are:

• Demographics, epidemiology, health care systems, public policies, and consumer preferences all have an impact on the pharmaceutical industry's social environment. Among the social trends influencing the environment are:

• Population aging: The world's population is increasingly aging, with more people living longer lives and requiring more health-care services. According to the World Health Organization2, the number of individuals aged 60 and above is predicted to grow from 962 million in 2017 to 2.1 billion by 2050, accounting for 22% of the global population. This poses both potential and problems for pharmaceutical companies, as it raises demand for chronic disease management and preventive care while also increasing the expense and complexity of health care delivery.
• The worldwide illness burden is changing from infectious diseases to noncommunicable diseases (NCDs), such as cardiovascular disease, cancer, diabetes, and respiratory diseases. NCDs are responsible for 71% of all deaths worldwide, killing 41 million people each year, according to the World Health Organization3. NCDs can have major economic and societal implications, reducing productivity, quality of life, and overall well-being. Pharma has a key role to play in finding innovative therapies and solutions for NCDs, as well as addressing underlying risk factors such cigarette use, poor food, physical inactivity, and problematic alcohol consumption.

• Health care reforms: The need to increase access, quality, and cost of health care services is driving substantial reforms in health care systems around the world. Among the common topics of these reforms are:

• Universal health coverage (UHC): Many nations are working toward UHC, which aims to ensure that all individuals have access to critical health care without financial hardship. According to the World Health Organization4, at least half of the world's population still does not have full access to vital health services. UHC has consequences for pharmaceuticals because it increases demand for medications and vaccines while also requiring additional evidence of value and results from pharmaceutical products.
• Value-based health care: Many health-care systems are transitioning from fee-for-service models to value-based health care (VBHC), which strives to connect health-care professionals' incentives and reimbursements with the results and value they give to patients. According to a McKinsey analysis, VBHC can improve health outcomes by 20% to 30% while lowering expenses by 15% to 25% and increasing patient satisfaction by 10% to 15%. VBHC has ramifications for pharmaceuticals as well, since it necessitates greater collaboration and integration with other health care stakeholders, as well as more data and analytics, to assess and demonstrate the value and outcomes of pharmaceutical products.

• Digital health: To improve the delivery and management of health care services, several health care systems are embracing digital technologies such as electronic health records, telemedicine, mobile health, wearable devices, artificial intelligence, and blockchain. According to Deloitte, the worldwide digital health market is predicted to increase at a compound annual growth rate of 12.5% from $147 billion in 2019 to $234.5 billion in 2023. Digital health has ramifications for pharma as well, because it presents new chances for differentiation and innovation, as well as new difficulties and competition from digital health businesses.

• Scientific discoveries, technical advancements, data availability, and computer power all have an impact on the pharmaceutical industry's technological environment. Among the technical trends influencing the environment are:

• Biological sciences are continually evolving, revealing new insights and opportunities for understanding and manipulating life at the molecular and cellular levels. Among the new topics and technologies in biological sciences are:
• The study of the structure, function, and evolution of genomes, which are the full sets of DNA in an organism, is known as genomics. The identification and characterization of genes and their variations, as well as their interactions with one another and the environment, is made possible by genomics. Genomics has applications in a variety of pharmaceutical fields, including drug discovery, drug development, personalized medicine, and pharmacogenomics.
• Proteomics is the study of protein structure, function, and interactions, which are the building blocks and regulators of life. Proteomics allows for the identification and characterization of proteins, as well as their changes and interactions with other molecules and processes. Proteomics has applications in several fields of pharmaceutical research, including drug discovery, drug development, biomarker discovery, and diagnostics.
• Cellular therapies are treatments that use living cells to heal or improve the function of damaged or diseased tissues or organs, such as stem cells, immune cells, or gene-edited cells. Cellular therapies have applications in a variety of pharmaceutical fields, including regenerative medicine, immunotherapy, and gene therapy.
• The engineering of biological systems or components for specific purposes or functions is known as synthetic biology. Synthetic biology allows for the development or modification of biological entities or processes that do not exist in nature, as well as those with increased or novel capabilities. Synthetic biology has applications in a variety of pharmaceutical fields, including drug discovery, drug development, biosensors, and biomanufacturing.

• Physical sciences are also quickly improving, providing novel methods of designing and delivering medications and devices. Among the new fields and technologies in the physical sciences are:

• Nanotechnology is the manipulation of matter at the nanoscale (1-100 nanometers), which is about 1/80,000th of the width of a human hair. Nanotechnology allows for the development or modification of materials or structures with unique or improved features or functions. Nanotechnology has numerous pharmaceutical uses, including medication delivery, diagnostics, imaging, and biosensors.
• 3D printing refers to the process of creating three-dimensional items from digital models by depositing successive layers of material. 3D printing makes it possible to create or modify objects with complicated shapes or structures that would be difficult or impossible to construct using traditional methods. 3D printing has numerous uses in pharma, including medication manufacture, drug delivery, medical equipment, and tissue engineering.
• Robotics is the design and operation of devices that can execute autonomous or semi-autonomous tasks. Robotics allows for the automation or augmentation of human activities or functions that are time-consuming, hazardous, or impossible for humans to accomplish. Robotics has applications in many sectors of pharma, including medication discovery, research, production, and delivery.

• Data sciences are also quickly evolving, providing new methods of generating and interpreting data from various sources and formats. Among the rising topics and technologies in data sciences are:

• Big data refers to significant amounts of data collected at a high rate and diversity of sources, such as electronic health records, clinical trials, genetic sequencing, social media, sensors, and devices.