Key challenges identified by a GlobalData survey include inflation, geopolitical conflict, and drug pricing pressures. Inflation and geopolitical tensions are seen as significant negatives, with economic uncertainty and potential repercussions like IPO market disruptions and economic sanctions. Drug pricing, heavily influenced by regulatory trends, is deemed the most damaging factor, potentially hindering industry growth.
The article highlights the impact of price controls in significant markets, which prevent drug prices from rising at the same rate as general inflation. This could limit revenue growth for pharmaceutical companies, especially as production costs may increase significantly due to rising supplier costs and employee wage expectations.
Despite these challenges, the report from GlobalData also identifies positive influences for the industry. These include factors like Environmental, Social, and Corporate Governance (ESG) and the patent expiration of biologics. The latter is expected to aid in streamlining operations and promoting growth. To thrive amidst these challenges, the pharmaceutical industry is advised to innovate and increase resilience. Strategies such as modernizing R&D models and implementing emerging technologies are recommended to gain a competitive edge.
Additionally, the article notes two emerging industry trends: the development of immuno-oncology drugs and the use of real-world evidence (RWE). These trends are likely to shape the future direction of the biopharmaceutical industry.
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[Source: European Pharmaceutical Review, January 2nd, 2023]