Pharmaceutical industry is a global industry dealing with the varied and dynamic medical conditions of populations worldwide. This puts the industry at the heart of the healthcare system, compelling the industry professionals to look at it in a different way.
Change is one constant thing in every industry and the pharmaceutical industry is no exception. It’s a constant state of flux and to sustain and stay at the top you need to adapt to the cycle of changes. This cycle of changes provides growth opportunities to the organizations, helping them ride the wave.
In near future the world is likely to face Volatility, Uncertainty, Ambiguity and Complexity (UVAC) along with Black Swans (Unpredictability). UVAC’s world expresses the systemic failures and behavioral failures, imperative to organizational failure. The UVAC’s world is driven by digitization, sustenance and rise of developing world. This situation can be translated to various industries such as pharmaceuticals, automation, nutrition etc.
Whatever maybe the development, any forward thinking industry needs to stay abreast of the cycle of changes in order to be effectively engaged.
Global Pharmaceutical Dynamics
The global pharmaceutical market is worth USD300 billion per annum, which is expected to grow to USD400 billion within the next 3 years. One-third of this market is controlled by the 10 largest drug companies, many with sales more than USD10 billion per year and profit margins of about 30%.
Companies currently spend one-third of all sales revenue on marketing their products, roughly twice what they spend on R&D. The key decision makers in these drug companies share the common goals of improving health outcomes while controlling costs and expanding access.
The industry is faced with unparalleled dynamics like high patent expirations, rise in demand for medicines, accessibility to fewer new medicines and modest uptake of available medicines. As a result, these dynamics are driving rapid shifts in spending between branded drugs and generics and between spending in developed countries and pharmerging countries. Innovative products are expected to be launched, bringing new treatment options to patients with lifestyle diseases and debilitating diseases as well as driving the markets for the next few years.
In pharmerging markets, improved access and strengthening economies would drive higher demand, particularly for generics.
Specialty medicines are expected to witness continued growth leading to increased uptake. Oncology, asthma and COPD, lipid regulators and angiotensin inhibitors are going to be the key therapy areas for the years to come.
8 Forces Acting on the Pharmaceutical Industry
- Generic Revolution
The pharmaceutical industry is at the crossroads today, of generic revolution, with the patents going off the cliff. With rising drug prices, cost-effective generic drugs have a crucial role to play. As a result, many Governments are actively involved in promoting this generic revolution. This move will contribute for sustaining health care systems worldwide.
- Changing Trends of Diseases
There have been shifts from infectious diseases to chronic diseases for past 200-300 years at different rates and dynamics across the globe, termed as the epidemiological transition. Globalization, urbanization, increased lifespan, exploding population, dietary changes, public health advances, environmental and climatic changes are the factors of this transition.
Diseases like cancer, heart disease and diabetes are becoming the leading cause of death and disability globally. The change is driven by a adaptation to unhealthy lifestyles, with smoking and alcohol use springing child malnutrition over the last 20 years to become the second and third leading risk factors for disease.
- Patient Centricity
In today’s world, patients are consumers first, with both the freedom and responsibility that comes with making more decisions and spending money on their treatments. Consumers have become more engaged in their own healthcare decision-making. The patients are playing a much more proactive role in their care, with technology serving as the key enabler to empower consumers and providers with the right information, at the right time. Patients are no longer recipients of healthcare, they are active participants. These trends represent a significant opportunity for the most patient-centric and forward-thinking organizations
- Preventive Therapies
Acharya Charaka seems to have been an early proponent of ‘Prevention is better than cure’ doctrine. Increasing demographic and psychographic segmentation within the population has led to a desire to stay healthy and live a long life. A growing number of governments in both developed and developing countries are also trying to shift the focus from the treatment of disease to its prevention. Social and economic pressures are gradually causing a sea-change in attitudes towards healthcare.
The younger generation today has come to understand the criticality and constraints of modern medicines. The younger generation does not like to fall sick and would like to work on themselves to stay healthy by balancing nutrition, thus, bringing the pharmaceutical industry at a higher level of competition, limitation, collaboration and consolidation at solution level.
In pharmaceuticals, the overall performance is determined by diagnosis, since the best treatment can be chosen only after a proper diagnosis of the condition. Genetic disposition and damages along with health consciousness has given rise to genomics and genome based diagnostics. The arrival of genomics as a science of clinical significance was underscored by AstraZeneca’s announcement on April 21st that it would form a collaboration to sequence 500,000 samples taken during clinical trials it has conducted over the years. According to the British-Swedish firm, it plans to see 2m genomes or so studied over the next decade. It all bodes well for the future of genome-based diagnosis. A report published in 2013 found that nearly a third of drugs in clinical development are associated either with a known DNA variant or with a variation in the structure of a specific protein, ultimately traceable to DNA. The presence in, or absence from, a patient of such variant allows drug makers to know whether their products are likely to work in that individual. This supports more precise genetic tests and molecular diagnostics for more targeted treatments.
- Personalized, Genomic or Precision Medicine
Many researchers and healthcare professionals globally are calling for a more personalized approach aimed at preventing a medical condition and tailoring treatment once it’s there. This can be called personalized medicine, genomic medicine or precision medicine. The National Human Genome Research Institute maintains that personalized approach to medicine includes individual’s genetic profile to guide decisions made in regard to the prevention, diagnosis, and treatment of disease. While it’s important to remember that genes are not destiny, they do provide information that can lead us to make more informed decisions about our health and healthcare. If you get sick, knowing your genome or the molecular basis of your disease can be an important piece of evidence for doctors seeking the most favorable treatment plan for you. In the case of cancer, genetic tests could lead to successful drug treatment rather than radical surgery.
- Integrated Medicines
Integrated medicine is comparatively new approach to healthcare and medicine and is whole body healing oriented. It uses various biological therapies like nutraceuticals, alternative medicines as well as pharmacological agents for prevention, treatment or for maintaining optimum health.
With increasing consciousness about health, fitness and overall well-being people have shifted towards wellness and prevention of diseases rather than treating them. In this new age, preventive healthcare system is given more preference than curative healthcare system.
Some other factors fuelling this shift are escalating healthcare costs, increasing awareness and education, rise in penetration of new medicinal treatment approaches etc.
- Hospitals for Tertiary Care
The healthcare space has witnessed a rise in hospitals for tertiary care for the past few years. This tertiary care is a focused consultative health care, usually for inpatients and referral patients from a primary or secondary healthcare professional. This tertiary care has healthcare personnel and facilities for advanced medical investigation along with treatment. Tertiary care services include cancer management, neurosurgery, cardiac surgery, advanced neonatal services, palliative, and other complex medical and surgical interventions.
The defining moment for the pharmaceutical industry requires certain strategic elements in place.
The industry needs to provide health solutions in terms of integrated medicines with respect to modern medicines, traditional medicines, alternative therapies, and nutraceuticals.
There needs to be a shift of focus from cure to care of the patient, thus establishing the requirement of a total care model.
The intent of the industry should be to provide affordable and accessible medicines to the consumers without compromising on the quality of the products and keeping patient safety at the front.
Due to quality issues, dwindling safety profiles of drugs and ethical issues, the image of the industry is not very high. Thus, it is crucial to have methodologies in place to increase this image of the industry for consumers’ satisfaction.
The industry needs to take up projects that will cater to rural and poor populations to erase inequalities existing in the healthcare system and also concentrate on ‘care and cure’ formula with patient centricity.
It is also important for the pharmaceutical industry to adopt a multi-prong approach to address diversity, lifestyle as well as behavioral issues like doing justice to the emotions of patients along with demographic dividend of emerging markets, and biotechnological innovations.
At the same time, it is crucial for the national and multi-national organizations to define what they really require in order for the eight forces to act simultaneously.