The golden era of blockbuster drugs is coming to an end but there are reasons to believe that new growth opportunities exist for pharma companies willing to adapt to the change. The FDA approved 27 New Molecular Entities (NME) in 2013, and this number came down from 39 in 2012 and 30 in 2011. Twenty-eight first-of-a-kind drugs were approved annually over the past five years. A few more new drugs were reformulated, incremental modifications or new indications of existing drugs were also done.
According to Bain & Company, strong pharma and biotech companies are restructuring their organisations and planning to launch many products simultaneously, rather than launching one blockbuster every other year.
Switching to this model, known as ‘Pharma 3.0’, requires companies to adapt to new business models. The traditional ‘Pharma 1.0’ model concentrated on blockbuster drugs, where as ‘Pharma 2.0’ model focused on bringing more product offerings to a global market. The next phase of development, ‘Pharma 3.0,’ focuses on service components. This model allows pharmaceutical companies to target health benefits per dollar spent, allowing companies to explore a variety of new business models.
With the changing market dynamics, transformation of technology, communications and business, pharmaceutical companies need to look for investing more in developing new products. This would increase the number of products serving the market while also meeting unmet medical needs by reaching underserved markets.
Succeeding in this new landscape will require partnerships between pharmaceutical companies, governments and/or non-profit organisations. Further, pharmaceutical companies will need to step outside their comfort zone and develop partnerships with players from other industries for better outcomes.
The cover story of this issue by Brian D Smith from PragMedic, UK, provides an insightful analysis of six great shifts transforming the pharma industry. The article covers shifts in value, network and information globally, along with the systemic shift and trimorphic shift. Dr Smith explores the implications of the six great shifts and how selection pressures will impact pharma strategies.
-- Issue 21 --