KPMG recently released a report Pharma Outlook 2030 talking about current global scenario of pharmaceutical industries. This report talks about various positive and negative shifts in the industry.
Shift 1: Downward Pressure on Pricing
Taking an example of Netherlands, this report states that with rising demand for healthcare and falling budgets, governments and payers are exerting pressure to drive down prices. Netherlands is looking to utilize the power of the EU to create even greater economies of scale. Other states are also looking at this initiative and seeking to cut their drug expenditure.
Value Based Pricing is the new trend of the industry. Now, Payers, insurers and hospitals are no longer willing to pay simply for a product approach. They want fees to be dependent on the success of the products and procedures through measurable outcomes. Last year in May, US-based health insurer Cigna signed contracts with Sanofi, Regeneron and Amgen for cholesterol lowering drugs, with the insurer receiving discounts if cholesterol levels are not sufficiently reduced following the therapy. Another US system Harvard Pilgrim Health Care has signed a value-based contract with Lilly for its diabetes drug, Trulicity, with rebates for under-performance, and an incentive program for exceeding patient targets.
The report analyse value-based pricing (VBP) as a mixture of both risks and challenges.
Shift 2: From treatment to prevention and beyond
According to the report, by 2030, pharma industry is expected to get more targeted therapies with practioners predicting the likelihood of a patient being diagnosed with a disease or health condition. A shift from treatment of symptoms to prevention measures and complete cures are expected to replace the temporary respite.
Some diseases like hepatitis C, which was previously regarded as incurable and afflicts 180 million people worldwide is now curable. This has created a paradigm shift that has taken healthcare professionals, patients and payers by surprise. Major developments like ground-breaking new therapies, advances in technology and the consumerization of health through increased access to data by patients made it possible.