Pharma must go further with its collaborations
pharmafile | May 8, 2009 | News story | Research and Development, Sales and Marketing | pwC, strategy
Pharma companies will soon have to start collaborating with companies outside the healthcare sector.
The global economic situation will make this imperative, according to PricewaterhouseCoopers' latest Pharma 2020 report.
Rather than handling everything from research and development to sales and marketing themselves, they will have to use the resources of companies which are specialists in these areas.
The main switch in the next decade or so will be from selling medicines to managing outcomes, PwC says, since drugs will be sold increasingly on the basis of the results they deliver.
"Most large pharmaceutical companies use external contractors to supplement their in-house resources, but very few firms have taken the next step," says Simon Friend, PwC global pharmaceutical and life sciences leader.
"Yet there is no reason why many companies could not outsource R&D, manufacturing and promotional activities."
"This would allow them to focus on their main value-adding functions," continues Friend.
These include project management, business development, regulatory affairs, intellectual property management and pharmacoeconomic analysis, he says.
Top pharma companies saw their market value rise 85-fold between 1985 and 2000 but this is changing, says Jo Pisani, partner in PwC's pharma and life sciences practice.
The needs of patients and health providers, who can measure whether they are getting value for money, increasingly must be addressed.
"If the leading pharmaceutical companies cannot change their business models rapidly, other firms may ultimately feature more prominently on the healthcare scene than they themselves," she says.
Vodafone has, for example, joined forces with Spanish telemedicine provider Medicronic Salud and device manufacturer Aerotel Medical Systems to offer a wireless home monitoring service.
And the importance of data analysis means companies like Google and Microsoft might also come to the fore, she says.
Big mergers, such as those between Roche and Genentech, or Pfizer and Wyeth, will continue to happen. But the report predicts a change to one of two business models, which PwC calls "federated" and "fully diversified".
The first of these see pharma firms create a network of separate entities such as universities, hospitals, clinics and technology suppliers to develop treatments.
An example of this would be a federation to address cardiovascular disease, which would include nutritional advisors and stress management services.
The second model, only open to the largest pharma companies, would see them develop into related services such as diagnostics, generics, neutraceuticals and health management.
The report holds up Johnson & Johnson as the leading example of this approach.
Even the largest manufacturers will be forced into collaborations, PwC concludes.
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