Financial factors to support and challenge Pharma in 2024
Posted: 2 January 2024 | Catherine Eckford (European Pharmaceutical Review) | No comments yet
While constraints such as inflation and drug pricing pressures will impact pharma’s growth in 2024, patent expiration of biologics is expected to support the industry over the next few years, research suggests.
According to results from a survey by GlobalData, the top challenges for the pharmaceutical industry in 2024 will be inflation, geopolitical conflict and drug pricing pressures. Data outcomes revealed that most respondents from Pharma considered that drug pricing and reimbursement constraints will have a negative impact in 2024.
Inflation and geopolitical pressure
The second biggest negative impact was thought to be geopolitical conflicts and inflation. “Geopolitical tensions and conflicts bring uncertainty to the economic outlook as deteriorating relationships are often accompanied by numerous repercussions ranging from reduced cooperation, IPO market disruptions, to economic sanctions,” noted Urte Jakimaviciute, Senior Director of Market Research at GlobalData.
Drug pricing was considered as the most negative emerging regulatory and macroeconomic trend, impeding growth for the industry, based on GlobalData’s 2019, 2020, 2021, and 2022 industry outlooks.
“Price controls – which apply to medicines in most major markets – mean that drug prices are not typically allowed to rise at the same rate as general inflation. Nevertheless, this may limit the revenue growth for pharma, with production costs on the rise: for example, due to suppliers rising the costs and employees expecting pay rises, drug production costs may increase well above inflation rates,” Jakimaviciute asserted.
Further findings from the report
However, GlobalData summarised that based on the report, influences including Environmental, Social, and Corporate governance (ESG) factors and patent expiration of biologics are predicted to positively impact the pharmaceutical industry in the subsequent years, with the latter helping to streamline operations and generate growth.
The pharmaceutical industry will need to innovate and increase resilience to accelerate market expansion, the company highlighted. The report recommened that to gain a competitive edge in the market, focusing on modernising R&D models or implementing emerging technologies could support this endeavour.
Lastly, according to the research, two other emerging industry trends in the biopharmaceutical industry are immuno-oncology drug development and real-world evidence (RWE).
Related topics
Big Pharma, Biopharmaceuticals, Clinical Development, Drug Markets, Drug Supply Chain, Industry Insight, Regulation & Legislation, Research & Development (R&D), Therapeutics
