Ready for the Pharma Industry Trends?
Submitted by Bullpharma on Wednesday, 8 April 2009No Comment
Guest post by BullPharma (Portugal) : The world is changing, and more and more challenges are in front of the Pharmaceutical Industry. In our day-to-day business vocabulary some words are mandatory – globalization, crisis, cost reductions, downsizing, internet, back to basics, and so on.
Like the “classic” half cup of water, for some people is half empty, and for others is half full. The challenges can be seen as opportunities or threats. Surviving, it’s not for those who only see threats.
We need to be prepared to the new stones that are in the road, and if necessary follow a new path. It’s mandatory to revise strategies and tactics, due to new situations:
- Pressure to low the prices. Governments, Insurance Companies and Patients are constantly negotiating. The growth of competition between Companies is also lowering prices. This pressure is allowing the Generics Companies to increase market share.
- Rising of costs in developing new drugs. Research & Development needs to deal with higher rates of failure in Phase III and with regulators pressures. Regulators want more assurances and more clinical trials to reduce risks, increasing the costs.
- Changes in the Distribution Channel. In the traditional Business Model (that is changing), the sales force visits only the medical community. The Generic Companies are visiting Doctors, Pharmacies and Distributors for less profit and the decision maker is no longer the Doctor. Now it is the Pharmacist. The reductions in the sales force will eliminate the visit to Doctor’s, and Companies will use the Internet 2.0 to educate Doctors and Patients. Distribution model direct-to-pharmacy (DTP) is now in order.
- Increase of the Number of Generic Products. The product portfolio is starting to increase the flow in the Supply Chain of products and information. The batches will become smaller to reduce stocks and costs. This increases the complexity of Logistics, becoming harder to manage.
- Trend to Outsource Manufacturing, which is expected to grow 11% until 2010. This offers strategic advantages like flexibility, shorter time to market and lower scale-up costs. Outsourcing also allows Companies to reduce excess capacity and restructure their supply chains. China will lead Outsourcing, followed by India, Korea and Taiwan.
- M&A of Companies. With the pipeline of new drugs being reduced and with the credit crisis, Big Pharma Companies have 3 areas to invest: Pharma, Biopharma or Generic Companies. The last option is the less clear.
- Increase of regulatory pressure and measures against counterfeit products.
- Cost reduction in all areas, due to blockbuster model disappearing. Innovators Companies cannot expect to live from products with huge margins and high volume in sales. Volume will decrease due to the needs of personalized medicines, orphan (rare) diseases, generics competition and safety issues.
The future will smile to Companies that move fast, and integrates with customers and other business partners. The mantra will be “Flexibility” and “Light Structure”.
BullPharma is around to help your Company in this NEW future.
![Big pharma grows a [heart] ?](http://www.alensagenerics.com/wp-content/themes/arthemia-premium/scripts/timthumb.php?src=http://www.alensagenerics.com/wp-content/uploads/2009/02/heart-in-hands-300x295.jpg&w=80&h=80&zc=1&q=100)
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