Preparing for 2030: Strategic Success in Pharma’s Complex Future
After a period of unpredictable and tumultuous change brought about by a global financial crisis followed by a global pandemic, the pharmaceutical industry is slowly adjusting to a new normal, with many of its traditional foundations less secure than ever before.
We predict that the advanced economies of the world will be less inclined to invest in breakthrough therapies or incremental advancements in medical science, just because pharma brings them to market. Furthermore, we are seeing a shift away from the tolerance of second-class healthcare in poorer parts of the world, simply based on the prices that pharma is prepared to accept for their medicines.
With the pandemic fading in global rearview mirrors, along with the reputational boost it briefly provided to the industry, pharma is now facing a future within which its right to operate and its right to price for incremental innovation have never been under greater threat. The future pharma era is a complex one, but one in which the most adaptable to change will surely survive and flourish.
In this article, we scan pharma’s 2030 horizon and provide crucial information about what it will take for the most successful companies to stay one step ahead of the competition.
The 2030 pharma landscape
Prescient expects the period between now and 2030 to be dominated by tight fiscal discipline, with systems and payers laser-focused on return on investment across the whole healthcare value chain. In an environment where financial resources are constrained, increasing scrutiny will be given to the allocation of funds for new medicines. Priority is given to therapies that demonstrate genuine breakthrough potential. These advancements must prove their value within existing treatment protocols or introduce efficient, innovative pathways of their own to justify their allocation of limited resource.
This may or may not put additional pressure on pharma margins and profits. Still, it will undoubtedly pressure launch/brand teams to engage earlier than ever on what it will take for their medicines to reach the patients who need them as effectively and efficiently as possible.
Which hurdles will pharma have to clear?
Science has always advanced via incremental innovation, accelerated by treatment-defining transformational breakthroughs, most recently in oncology and immunology, and by the emergence of biologics, stem-cell, and gene-editing therapies. With each new treatment, however, come the questions, ‘How much more innovation is needed?’ ‘How much more innovation is society willing to pay for?’ and ‘How much more innovation are healthcare systems prepared to fund?’
These philosophical and economic questions are not going to go away. Prescient predicts that the future of the pharma industry will have to become even smarter and more efficient to fully realize the value of the innovation it brings to patients. A well-defined strategic plan that focuses on reimbursable innovation will be the key hurdle to clear, along with demonstrating return on investment at all levels of the healthcare value chain – and by doing so, providing benefit ‘beyond the medicine or vaccine’. Companies will need to implement strategies that not only address current challenges but also improve their operational efficiencies and patient outcomes.
An integrated approach using advanced technologies, data analytics, and patient-centered solutions is vital for addressing these challenges. This enables pharma companies to understand market needs and improve access and effectiveness.
Where should we place our strategic bets?
In addition to the hurdles set out above, by the year 2030, pharmaceutical companies will need to be navigating an increasingly tech-savvy world with enhanced speed and adaptability.
We challenged ourselves to select four areas for pharma teams to focus their resources and energy on, to become the strategic masters of 2030 and beyond:
- Data and AI: Organizations will need to harness the power of data and AI to stay ahead of the curve in an increasingly competitive and exceedingly demanding marketplace. Utilizing these technologies across the value chain and product life cycle will enable brand and launch teams to enhance operational efficiency, gain competitive advantage, and personalize customer engagement across multiple channels. This development in data utilization will be crucial for understanding market needs and responding effectively.
- Value provision: Competition will continue to intensify across personalized medicine, digital health, and regenerative therapies, transforming these once futuristic concepts into increasingly standard options. With mounting pressure from governments and payers to control healthcare spending, pharma will need to balance societal expectations vs the rising cost of innovation to simultaneously manage their P&Ls.
- Regulatory change: The pace of regulatory change has arguably been slower than the pace of innovations recently. However, by 2030, this gap will likely have closed to better reflect the diversity of therapeutic options, delivery devices, and the impact of digital/telehealth. There will be increased pressure on organizations to prove compliance across sales and marketing practices, pharmacovigilance, and data privacy. Staying ahead of regulatory changes is essential for sustainable development around the world.
- Strategic partnerships: To accelerate innovation, enhance competitive advantage, and increase operational excellence, pharma will need to rely on a network of strategic partners to help drive research and development efficiencies, optimize commercialization and support compliance. Forming alliances with technology firms can further improve their ability to adapt to emerging trends and tackle complex challenges head-on.
Across these four areas, there will be one common theme: the need to prepare for the future today. Shannon te Roller, Associate Partner at Prescient, agrees, saying: “As a result of the financial crisis and pandemic, healthcare has become more fragmented, and even broken. Pharma companies need to strategize earlier to prepare for the launch of new medicines. We acknowledge now that we should be thinking about service redesign and pathways at least three years before launch so that our medicines can be used and accessed by patients once approved and available. However, at Prescient, we still do not see this strategic thinking happening early enough”.
How many of these predictions do you feel you are prepared for? For more information on how to align your strategies with these insights, also consider to contact us by booking a call with our strategy experts to benchmark your current capabilities and prioritize your next move toward strategic mastery.
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