NEW YORK — Spurred by health reform and other factors, a "golden era" could be approaching for drug companies as they reinvent themselves, according to a new report by PwC.
The report, "Pharma 2020: From Vision to Decision," said that the industry was on the verge of an era of renewed productivity and prosperity, but its success was not guaranteed.
"A healthy, vibrant and responsive pharma industry is vital to society for the development of new medicines," PwC global pharmaceutical and life sciences advisory leader and report author Steve Arlington said. "More needs to be done to support and encourage long-term investment in the discovery and development of medicines to treat serious disease. We need to all work together to improve the well-being of populations."
The report said that health reform is accelerating the need for big changes in the drug industry and its response to rising demand for medicines, major scientific and technological advances, economic pressures and sociodemographic shifts — in both developed and growing markets around the world. It found that while the industry could experience "unprecedented" global growth in the future, its prevailing business model and management culture were ill-suited to capitalize on the opportunities over the next decade. Drug companies that make it through the next few years can prosper if they can prune their pipelines, address rising consumer expectations and poor scientific productivity and cultural barriers, the report said.
Among the challenges the industry faces is rising healthcare costs. Demand for medicines could result in global drug sales increasing by 40% to $1.6 trillion by 2020; but with economic difficulties and rising costs, the industry has to be in a position to be a part of the solution, the report said, and it's faced with a choice: Offer more value without charging more or justify premium pricing by proving it can remove costs from another part of the healthcare system.
The report also suggested tailoring pipelines to meet demands in the market and also increase collaboration, noting that the culture in the pharmaceutical industry has changed little over the past few decades.