Pharmaceutical Industry Outlook 2030 at the Crossroads: From Evolution to Revolution (2)

Related News: Pharmaceutical Industry Outlook 2030 at the Crossroads: From Evolution to Revolution (1)

Pharmaceutical technology

An increasing number of pharmaceutical companies and medical device companies are cooperating and integrating with technology enterprises. For example, Sanofi and Verily, the life sciences subsidiary of Google parent Alphabet, announced in September 2016 that they would invest approximately USD 500 million in a joint venture; the device giant Medtronic has teamed up with the technology company Qualcomm to develop a continuous glucose monitoring system; Varian Medical Systems has cooperated with Flatiron Health to develop cloud-based, electronic health records, data analytics and decision support software toward oncology patients.

Genetics

Genetics development has made real progress in recent years, with gene editing fueling a new round of potential applications to aid prevention (via early detection) and real cures. The leading genomics companies are basically biotech enterprises, acting independently or through collaboration.

Gene editing will revolutionize the treatment of different diseases (such as nervous system diseases or cancers) in the coming decades. This approach enables medical service providers to alter/replace the problematic gene, to produce a new therapeutic protein or "silence" mutant cells. These advances benefit many nervous system diseases, like Alzheimer’s disease, Parkinson’s disease, Huntington’s disease, amyotrophic lateral sclerosis and strokes.

The U.S. University of Florida Health has created a genotype testing process to help doctors conduct treatment based on patients’ genetic information. Genetic information is used to understand whether a drug for preventing blood clots (clopidogrel) will be effective in patients after specific heart surgery, or whether an alternate therapy should be selected.

Immunotherapy

Technological progress is also boosting another competitive field to be more mature: immunotherapy. Immunotherapy based drugs are increasingly being used for treatment of various cancers, but companies are also exploring their use in the treatment and prevention of other chronic conditions (such as diabetes, cardiovascular diseases, Parkinson’s disease and multiple sclerosis). For example, the U.S. biotech company Cardiovax is developing immunotherapies to treat and prevent cardiovascular diseases such as atherosclerosis. These therapies may be used to predict the risk of heart attacks. Meanwhile, Prothena and Roche are co-developing immunotherapies to help delay progression of Parkinson’s disease by targeting a protein which is potentially related to the onset and progression of this disease.

How could leading enterprises maintain influence and profit in the face of changes? Gradual changes in the business model and a refocus on new fields can help pharmaceutical companies adapt to disruption. And the three types of typical enterprises that will lead the industry in the future are predicted to be:

Active portfolio companies

An active portfolio company is generally active in several therapeutic areas within its portfolio. For example, those engaging in pharmaceutical technology, genetics and immunotherapy are constantly looking for new forms of therapy, and simultaneously reappraising their product mix to match unmet needs. Active product lifecycle management is becoming more and more important in the pharmaceutical industry, because the number of blockbuster drugs protected by patents continues to decrease.

Virtual value chain coordinators

Companies providing "virtual value" do not own anything physical, but they create various types of solutions--although their final delivered product or service is very real. What they do own is data, and many are about therapies, patients and research. A virtual value chain coordinator guide patients effectively through a complex medical value chain, from cradle to grave, supporting medical practitioners to provide tailored medical service, or even allowing pharmaceutical companies to receive efficacy-based payments. Pharmaceutical companies are at risk of becoming another platform provider in the future.

Niche market specialist companies

These companies tend to be small, and are organized in a way very different from traditional players. They focus on a single therapeutic area or disease, and look at the entire patient pathway from prevention to real cure.

Planning ahead, in the face of industry changes, enterprises and their managers need to adjust the impacts on business and operating models in a holistic way, to adapt swiftly and decisively to disruption.

The large pharmaceutical companies good at basic research or the small biotech companies founded in the wave of the rapid development of biotechnology can employ different ways of play specific to the market and industry, but they both will face social, economic and policy changes. The survival of the fittest is a result of choice, and the forward-looking enterprises will be stronger.

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