Over the last 25 years, the global pharmaceutical industry has made revolutionary contributions to clinical care. Now, due to the rapidly changing healthcare landscape, the industry faces challenges such as unpredictable product pipelines, increasingly competitive markets and uncertain policy and regulatory environments. In order to create value, pharma companies shifted their focus from organic growth to acquisitions and consolidation.
In the future, as pharmaceuticals play a central role in the evolution of healthcare, companies will need to be agile and adapt to attractive market opportunities. Future market leaders will excel in several key areas:
- Enhancing innovation and clinical differentiation: The need to develop innovative medicines is greater than ever before. Many disease areas like oncology and neurology remain underserved in terms of pharmaceutical therapies. Pharma companies can build portfolios that balance bold investments with riskier product development and source innovation from both internal and external sources.
- Exploiting the true benefits of global scale: Industry consolidation has created massive scale across the pharma value chain, from discovery to commercialization. Successful pharma companies will discriminate between functions where scale adds value and where it reduces efficiency and productivity. A more targeted approach to capturing the benefits of scale will create the flexibility and financial efficiency to take growth to the next level.
- Expanding beyond the "pill": As growth in core businesses begins to slow down, pharma companies will be tempted to consider adjacent markets for growth. Rather than follow the herd, leading players will identify and develop hidden assets in areas where customers are shared, capabilities overlap or there is potential for sharing costs.
The next phase of scientific innovation and growth in pharmaceuticals may still be several years away. But pharma companies need to start laying the groundwork for change that will spark the next cycle.
