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Life Sciences Industry to Benefit from Strong 2015

Date: 30 July 2015

The Life Sciences industry is due to benefit from a strong 2015 as the price of drugs increases alongside sales.  The PM Live website reports that in Q2 the price of drugs increased by 12%, and sales are due to rise by 5% by the end of the decade – reaching almost $1 trillion.

Analysts from Credit Suisse have found that drug prices increased significantly during Q2 when comparing year-on-year inflation. The prices also went up by 230 basis points between Q1 and Q2.

These figures may well have contributed to the findings from analysts at EvaluatePharma, who discovered that drug sales across the US and Europe are also increasing. It is predicted that with increasing sales the pharma industry will witness a growth of 5% in global prescription sales by the year 2020. Other influences like emerging therapeutic categories and new drug approvals have also helped fuel this growth.

Out of the 140 drugs tracked by the analysts at Credit Suisse, 33% recorded a price increase in Q2. On top of this, the FDA has been approving more and more drugs, with 44 receiving such status in 2014. Eight of these are predicted to result in sales of over $1 billion within five years.

Despite the pharma industry suffering in previous years, Lisa Urquhart – the editor of EP Vantage – commented: “Any fears that the pharmaceutical industry might be heading towards a slowdown after the last two years of phenomenal growth can be put to rest for now.”

But, she did also note that continual price rises for drugs may hamper this growth, and for the industry to sustain, its companies “will have to make compromises around global pricing and market access.”

This means that pharma companies may need to begin accepting lower prices for their drugs.

The analysts at Credit Suisse, however, note that the high prices associated with some drugs do not include discounts and rebates; some drugs for ultra-rare disease treatment are also priced highly for a reason.

The positive outlook for 2015 and the sustained positivity through to 2020 is a welcome change to the beginning of the decade, when large pharma companies lost a number of patents and the industry lost significant amounts of money.

This bright future for the pharma industry is actually heralding some fundamental changes within the sector. One of these changes is the evolution of the industry into one preoccupied with an access-driven commercial model; it seems that as the role of payers within the pharma industry begins the change, there is a new war for talent between pharma companies looking to hire.

The focus is now shifting from employing high volumes of sales people, to seeking to hire individuals with more advanced education and impressive payer networks. There is now a need for pharma companies to attract staff that are more effective in creating emotional connections between payers and patients, as well as those with more market access, sales ability and an understanding of medical affairs.

With the number of specialty care pharma companies on the rise, this connection between businesses and payers is crucial – and the right professionals, it seems, are a key element in forging such connections.

For more information on the evolution of the Life Sciences industry and the roles that relationship-driven companies are looking to fill, contact our team today.

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