Pharmaceuticals industry is gearing up for the next level of growth to capitalise from growth in spends backed by higher disposable incomes in emerging markets, aging population in key markets, sustained improvements in healthcare infrastructure, improvement in healthcare financing, growing generics market & continued growth in demand for chronic therapies.
This has given rise to increase in competition, price erosion, pressure on costs and increased cost of developing new markets which have all contributed to increase in the complexity of pharma business.
Key trends shaping the Pharmaceuticals Industry
Developing New Competencies: Pharmaceutical companies especially in India have capitalised from cost efficiencies sustained by beneficial economic factors such as competitive land rates, low cost of production, labour costs, low resource costs etc. On the face of increase in pressure of price, companies have resorted to reorganising their sales and marketing infrastructure among driving efficiencies in productions and supply chain in a bid to preserving margins. Companies in the industry have been evolving to develop new sources of strength and competitive advantage for example trend for significant portions of manufacturing being outsourced is accelerating, there is an emergence of category focussed niche players, increasing number of contract research organisations etc. to name a few. Companies that can demonstrate the value their products and services bring to patients will be able to access and serve broad patient populations worldwide. In addition, the pharmaceutical industries have a significant opportunity and important role to create a broad-based healthcare “ecosystem” and that necessitates reengineering value delivered across the industry supply chain.
Thrust on Differentiated products: There has been an increased interest in Research & Development initiatives to create most differentiated products. Specifically in India, R&D spending is increasing due to introduction of product patents, increased government investments and stimulus, commitment to IP protection, increased likelihood of technology transfer from developed nations, high availability of low cost skilled doctors, availability of genetically-diverse population for clinical trials and need to develop new drugs to boost sales, as major factors.
Strong export market: The pharmaceutical export market is thriving on the backdrop of a strong presence in the generics space. India has 793 WHO-GMP approved Pharma Plants, 2,633 FDA-approved drug products and 153 European Directorate of Quality Medicines (EDQM) approved plants with modern state of Art Technology. Addition of new World class facilities, renewed focus on manufacturing excellence & product quality, increased thrust in new product development and introductions further accelerates the growing recognition of India as global supplier of high quality medicines. Drugs manufactured in India find market in more than 200 countries in the world, with the US as the key market. In addition companies operating out of India are also making their presence felt in the emerging markets around the world, particularly with a strong product portfolio especially in anti-infective and anti-retroviral.
Challenges facing the players involved in the Pharmaceuticals industry
Old Strategy Model: One of the main challenges in pharmaceutical industry is the elusive search for the right business model. The strategy and model for most of the pharmaceutical companies is almost 50 years old, however their business environment is changing rapidly with heavy structural shifts. There is still lack of knowledge on how to structure their innovation, marketing and sales, manufacturing, and portfolios accordingly.
Government Policies and Compliance: Pharmaceutical companies has been constrained to live with current focus of the government and also of the civil society on ‘reasonably affordable medicines’ irrespective of the element whether they are generic or patented. Therefore, one of the critical challenges of the Pharmaceutical Industry especially in India continues to be delivering affordable medicines for a large section of the population of the country, as expected by the government.
Lack of Innovation: Like other industries the pharmaceutical sector is lacking to innovate with cutting edge ideas, convert them to implementable business models and processes, which in turn would help these pharmaceutical companies to remain competitive in the globalized market place. From the perspective of the global innovator companies across the world, ‘lack of a robust innovation friendly ecosystem’ is still a major challenge.
How can BMGI help?
BMGI has on-going commitment to pharmaceutical sector by serving clients with a profound technical knowledge and insight into industry models and their exclusive requirements. BMGI's expert knowledge, provides not only strategic visions but also a practical and technical methodology to help companies deal with existing challenges. BMGI’s pharmaceutical consultancy services includes supporting firms on establishing strategic priorities and strategy implementation, developing marketing & sales infrastructure, strengthening manufacturing excellence & process transformation initiatives, selection of right automation initiatives in the value chain, facilitating development of an innovation portfolio, creating a thinking mind set & improving success rate of new product introductions, designing of world class facilities and developing robust infrastructure to deliver on quality compliance among others. BMGI’s cutting edge insights, robust methodologies, vast experiences and knowledge base has enabled its client’s unparalleled success and unique competitive advantage in their market place. BMGI is hence, reckoned as a world class pharmaceutical consulting firm by clients and industry bodies.
To know more about our Pharmaceutical Consultancy Services or speak to one of our Pharmaceutical consultant, we welcome you to Give us a call