Alistair Grenfell explains how the smart combination of domain expertise, data analytics and technology is transforming the development and commercialization of medicines – and helping to bring life-changing innovation to patients quickly, efficiently and profitably.
Analysis of global pharma’s collective performance in the past five years highlights a curious phenomenon: industry revenues are rising but profits are declining. The latest figures show that despite net sales growth of 10% between 2013 and 2016, industry profit margins fell by almost 18%. Therapeutic advances during that same period have been remarkable; who would have thought we’d find a cure for hepatitis C, or see immunotherapy transform outcomes in cancer care? The industry is fueling more innovation today than at any time in its rich history. Yet the commercial returns are, by comparison, pulling up short. Something isn’t working.
The downward trend coincides with a healthcare environment that’s being shaped by powerful global currents. An aging population, along with a growing determination to improve access to healthcare in both developed and emerging markets, is placing renewed pressure on already-stretched health budgets. The knock-on effect for pharma is clear: as payers become more influential, pricing pressures are intensifying and funding for innovation is getting harder to secure. But it’s just the tip of a deepening iceberg. The cost of pharmaceutical research and development is rocketing, while the commercial complexities of introducing breakthrough innovation are proliferating.
As pharma’s focus shifts towards the development of specialty medicines, inefficiencies in the industry’s R&D model are being brutally exposed; target diseases have smaller patient populations, exacerbating the difficulties and costs of clinical development. The impact on profits is a painful punchline. Companies need help.
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