Pharma growth depends on pipeline sustainability
clinical development costs coupled with declining drug discovery
success rates are causing efficiency levels to fall, halting the
flow of new products in the R&D pipeline.
That is the view of the latest Frost and Sullivan report in which the firm details the rise of cheaper generic alternatives, which is further exacerbating the situation. However, the industry still offers significant growth opportunity for participants that can build new strategic business models.
Estimated at $554 billion (€456 billion) in 2004, the global pharmaceutical market is forecast to register an annual growth rate of 8.2 per cent from 2004 to 2011 to reach $967 billion. The growth is expected, with the assumption that pharmaceutical companies can meet the demand of the patient population, and target diseases of unmet medical need to maximise profit.
The increase in the aging population gives rise to pharmaceutical drugs for indications such as macular degeneration and Alzheimer's disease. Drugs that address rising multifactoral disorders such as cancer as well as lifestyle disorders such as obesity are also likely to experience strong revenue growth. Moreover, as patient groups become more fragmented and diagnostic methods improve, the demand for evidence-based personalised treatments are likely to increase.
"It is essential for major pharmaceuticals companies to move from the blockbuster model and adopt new strategies that cater to specific diseases areas and populations," notes Frost & Sullivan Healthcare analyst Phil Webster.
"To grow in this new era of evidence-based personalised medicine, companies should generate a sustainable product pipeline characterised by improved productivity and diversity," he added.
The report recommended that market participants needed to replace their dependence on a select group of drug candidates with a more extensive product portfolio. Revolutionary products that focus on diseases with insufficient therapies are likely to support a sustainable product pipeline.
The report also suggested companies need to examine reformulations and investigate new indications for existing blockbuster drugs.
The use of computer modelling and biomarker discovery to aid the discovery of promising drug candidates was suggested as likely to facilitate an enhanced understanding of the clinical development process and help to make a more informed investment decision.
"Less investment will be lost through late stage drug candidate failures as more compounds succeed in the clinical development process," said Webster.
"More novel techniques to identify toxic or ineffective drugs early in the development process such as the use of biological models, bioinformatics and biomarkers will drive down development costs, increase revenues and improve overall industry productivity," he added.
