The State of the Industry and Why It Matters
In the first part of this four-part series focused on global pricing, we’ll discuss the current state of the industry and how customers can expect to be affected.
As early as 2020, global pharmaceutical sales are expected to grow beyond 1.2 trillion dollars. This growth is primarily driven by three main events: an increase in new pharmaceutical product launches, the higher average of prices resulting from clinically meaningful product efficacy, and the significant growth of wealth in populations outside of the US. In fact, markets apart from the US and EU will have a combined growth of 19.9%, which will account for 54.1% of the total global pharmaceutical revenue.
Comparatively, growth within the US is only expected to grow by a mere 7% and will lose 2.8% of the global market share by 2020—further compelling manufacturers to adopt a global lens, rather than focusing primarily on developed markets. That said, the ability to design and execute a truly global strategy is no longer an option, but rather a necessity.
Other industry challenges include the correlation between a growing demand for novel treatments of complex diseases and the associated development costs. As part of this, average specialty drug prices increased by 5.1% in 2016 while orphan drug prices increased slightly more than 1%—contributing to an average list price of $140,443 for an orphan therapy. With increasing development drug costs for progressively narrower indications, the necessity to substantiate value with regional results, and mounting pressures to decrease the burden on payers’ budgets, manufacturers consistently turn to information technology for ways to maximize revenue.
However, using outdated homegrown solutions and legacy systems often prove inadequate when compared to modern, cloud-based, end-to-end market access software. As market realities necessitate geographical expansion, teams are spread globally, and the amount of necessary data increases exponentially, isn’t it time to reevaluate the software supporting your market access?
Look forward to part two of the blog series and learn how to deal with these industry challenges from a global perspective. Until then, you can learn more about Global Pricing Management or contact the author with any questions at firstname.lastname@example.org.
Join us October 10-12 in Vienna, Austria for our Commercial and Pricing Innovation Forum to exchange ideas and discuss innovative strategies with other industry thought leaders. Until September 1st, attendees will receive one free registration pass with the purchase of one registration.
Sources used: IMS, PhRMA.org, EvaluatePharma