Tuesday, 4 March 2014

10 Points from Deloitte’s ‘2014 Global Life Sciences Outlook’ Report


1. The global life sciences sector is exhibiting resilience and reinvention as it employs new R&D and business models to cost-effectively deliver innovation, value and improved patient outcomes.  However it is facing reimbursement pressures from escalating costs and overwhelmed health systems across the world.

2.  The Americas are the largest pharma market ($417.6 billion in 2012), followed by Europe ($224.3 billion), Asia/Africa/Australia ($168.1 billion).  The biotechnology sector represented $232.5 billion in 2012.

3.  The drivers for growth are an aging population, a rising incidence in chronic diseases (e.g. cancer, heart disease, diabetes and hypertension), technological advancements and health care reforms (e.g. increases in insurance coverage).

4.  Emerging markets continue to be drivers of growth. India, China, Indonesia, Mexico and Russia are predicted to have growing markets driven by population growth and government initiatives.

5.  Life science companies are finding that cost containment is an important factor in both developed and developing countries, with national health care systems making greater use of generics.

6.  R&D is increasingly multi-disciplinary with more collaboration and risk-sharing.  R&D is more patient-centric and driven by rigorous financial assessment.

7.  Life science companies need to cope with the increased cost of R&D. The cost of developing a drug has increased 18% from 2010 to 2013, to $1,290 million. However over the same period the forecasted peak sales have dropped over 40% to $466 million.  Total forecast sales have dropped to $4.6 billion.

8.  Complying with regulatory changes continues to be a critical issue, particularly in emerging markets.

9.  The US health care landscape is being changed by ACA and other policies and life science companies are employing new business models in response.  In particular showing ‘comparative effectiveness’ will become much more important.

10. Continued policies in Western Europe to reduce budget deficits are expected to slow down annual growth in health care spending to only 2.3%.  However Asia’s annual growth in health care spending is expected to be 7.6% in the next few years.

The report itself can be accessed here.

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