As we approach the midpoint of 2017, the life sciences industry braces for growth opportunities and challenges alike. Healthcare reform and regulation, economic uncertainty, evolving patient expectations, and an increasing demand for innovation and value are among the top drivers in a series of competing market changes. While these changes weren’t necessarily unexpected, we’re still in the early stages of a more consumer-facing industry unfamiliar to most pharmaceutical and biotech companies.
To capitalize on this patient-centric environment, pharma companies are having to rethink their traditional means of engagement. Lip service is no longer enough. These companies need to find more proactive (and interactive) ways to communicate value to target markets, as well as the tools to do so, and this challenge is only magnified by a global outlook.
The following infographic illustrates some key developments for pharmaceutical professionals to keep on their radar. To get a more detailed picture, check out our whitepaper, Adapting to Geographic Shifts in the Pharmaceutical Market: Forces of Change in the Industry
Sales Trends and Growth Challenges in the Evolving Pharmaceutical Marketplace
Drug development has always been a risky proposition, so the experience of bringing a drug to market after multiple phases of clinical trials and meeting stringent safety and efficacy standards is a relief for any developer.
But with rapid transformation in the global marketing environment threatening to limit pharma companies’ success, beating the odds of drug development is only half the battle.
Worldwide sales growth
More than $1 trillion of worldwide prescription drug sales expected by 2020.
The prescription drug market is projected to grow by 5.1% per year to reach $1,017bn by the end of the decade.
High-income vs. developing countries
While increased global connectedness has shifted some industries’ focus toward developing markets, pharma is moving more slowly in this direction. High-income countries continue to dominate both production and consumption.
- High-income countries comprised only 17% of the world’s population, but constituted 79% of drug expenditures.
- The U.S. accounted for 34% of global pharmaceutical expenditures, followed by Europe and Japan.
- 56% of medicines introduced in the previous four years were sold in the U.S.
Despite the pharma industry’s slower progress, emerging and developing markets offer a great opportunity.
Demand in these markets is expected to increase, and at a faster pace than elsewhere. Aggregate annual spending may reach $499bn by 2020.
Globalization is regarded as one of the most important—if not the most important—drivers of economic activity around the world.
Pharmaceutical industry health can also be attributed to an unwavering demand for healthcare: People will continue to get sick, and an increase in lifestyle-related diseases and continued aging of the global population creates a growing need for new medicines.
However, the pharma industry is far from immune to financial pressures.
- Governments around the world have less funding available to pay for medications and are actively seeking to reduce their costs, hence the intense scrutiny on drug pricing.
- There have even been lawsuits against companies accused of trying to keep drug prices artificially high, forcing companies to withdraw products from certain markets.
- The ability to pay for new medicines varies from country to country, undermining the global connectedness of pharma markets.
These financial and political burdens make it critical for pharma and biotech companies to communicate the value of their medications.
They’ll need to:
- Work smarter to reduce the costs of drug development and marketing wherever possible
- Use real-world data to demonstrate the safety and cost-saving potential of their products
- Ensure operational consistency across markets with more centralized control
- Adopt technologies to facilitate the generation and collection of data according to an ever-changing regulatory landscape
Rather than trying to do everything internally, collaborating with a globalization services provider with specialized expertise of regional market shifts will be key.
Learn more at Lionbridge Life Sciences