The pharmaceutical industry is undoubtedly one of the most important and highly innovative sectors in the world. This sector is diversified, knowledge-intensive, and highly globalized, absorbing massive investments and bringing considerable benefits to public health and the economy. However, despite being technologically advanced and highly innovative, pharmaceutical companies are facing trouble in doing business smoothly and making profits. The main contributor to this complexity is the fact that the value chain of the pharmaceutical industry is highly dependent on policies, drug approvals, and industry collaboration with smaller players such as small biotech universities or firms. We have enlisted some of the critical challenges that pharmaceutical companies need to buckle up for:
Sluggish Market Growth
The U.S. has been the market leader in the pharmaceutical industry for several years, so a sluggish market growth in this region is bad news for the global pharmaceutical market. The primary reason for this declining trend can be attributed to the diminishing impact of hepatitis and cancer drugs. However, this will not dethrone the U.S. from the title of ‘world’s largest pharmaceutical market’. They are expected to contribute a fair share in the forecasted industry growth in the following years as well.
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With every new presidential administration bringing changes to the healthcare sector, a simultaneous impact on the pharmaceutical industry also occurs. The Patient Protection and Affordable Care Act could undergo several changes even though legislative efforts to maintain the current policy are in full swing. The challenge here for pharmaceutical companies will be to enforce change while maintaining steady market growth.
Future of Biosimilars
Biosimilars have made big waves in the pharmaceutical industry in the past few years, and this trend is expected to continue in the coming years as well. Although biosimilars are a growing segment in the pharmaceutical industry, there are several challenges in their production. Several biosimilars that have been developed require costly clinical trials to gain market approval. Players in the pharmaceutical industry must find a solution to this to ensure cost reduction.
With technology trends like wearable biometric devices and telemedicine in place, patient-centric healthcare is getting into the spotlight. Digitization has also cultivated more knowledgeable and informed patients who are likely to play active roles in the treatment plan prescribed by their doctors. The main challenge here for the companies operating in the pharmaceutical space is to form partnerships directly with the consumers and leverage the power of the new models in patient care.
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Venture Capital Flow
The venture capital flow in the pharmaceutical industry has been showing a declining trend in the past few years. This trend might pose to be a major challenge in this sector considering the struggle to maintain growth. But the introduction of breakthrough technology such as telemedicine and biosimilars are expected to bring in more investments for this sector.
Drug Approval Stagnation
The rate of drug approvals has been rather slow in the previous year, and this pattern is expected to continue in the current year also. The main reasons for the reduction in drug approvals could be the introduction of stricter guidelines or product-specific issues.