We all sometimes want to have a good look into the future to anticipate where the company needs to go. I always like to read hard numbers studies are crunching, especially when they help to predict what the future holds. I came across the EvaluatePharma® World Preview 2018 which gives some interesting insights into the current state of the Pharma industry and what that most likely means for a future in the year 2024. Let’s have a look.
The good news up front: the report suggests that the Pharma industry will continue to grow. The numbers show that growth will be driven most significantly by the continued uptake and anticipated launch of novel therapies that address key unmet needs. Furthermore growth will also stem from increasing access to medication on a global level.
Obviously there will not be limitless growth since the industry will continue to face various challenges, some growing bigger, some fading away. The industry will certainly continue to face the threat from genericization and biosimilar competition. Other risks the industry will continue to deal with are product failure, price control and a growing role of the patient that (among others) demands outcomes data and “real” prove of drug and therapy efficiency. This will call for the development of value-based pricing and reimbursement approaches.
“Faced with these challenges of keeping up innovation – at a reasonable cost – not to mention demonstrating value to increasingly wider audiences, including patients, Pharma companies will have to take a long hard look at their business models in the coming years.“ EvaluatePharma® World Preview 2018
The data evaluation in the EvaluatePharma® World Preview 2018 comes to the conclusion that Novartis will be the leading prescription drug company in 2024. The second and third place go to Pfizer and Roche, both of whom are quite close together when it comes to competing for the second spot. Novartis isn’t necessarily in the possession of the absolute top drugs but they combine a staggering (forecasted) ten products with sales over $1bn, and a further twelve products with sales over $0.5bn by 2024. Furthermore, and probably most important, “Novartis continues to make strategic investments to remain at the forefront of emerging technologies”. Pfizer can secure the second place by 2014 mainly because of their key innovative brands in oncology and immunology, biosimilars, and the essential health portfolio. Oncology is also a key factor in Roche’s portfolio, with basically one drug as a single growth driver. But – in a smart move – the company is increasingly relying on non-oncology assets to drive growth and therefore can make it’s way into the top three by 2024.
In an interesting note the report also goes into R&D spending and why it will decline in the future. The explanation is two-fold. Either it is due to increased efficiency, meaning that improvement, mainly in the area of employing big data and predictive analytics, makes R&D simply less expensive and at the same time more patient focused, or it is due to less revenue. Well, both sounds reasonable, so it’s quite likely a combination.
What does create value organically though are core therapeutic areas. They are forecasted to deliver the greatest value by 2024. Also the development and commercialization of advanced therapies (cell and gene therapies) is increasingly being used as an engine of value creation within the industry. But most importantly the orphan drugs sector is expected to outperform the market! Here lies the future in earning money in the Pharma sector. I’m absolutely sure about that. This clearly highlights the “industry’s continued move to address small groups of neglected patients with high unmet need and to benefit from traditionally reduced payer scrutiny on orphan drugs, as well as regulatory and financial incentives”.
Not to forget and bridging over into another life sciences discipline: Biotechnology products will increasingly contribute to sales in Pharma companies. That is an indicator for how much the industry is going to rely on novel drug targets in the future that are only accessible through biotechnology products.
More details here: EvaluatePharma® World Preview 2018