Today’s pharmaceutical sector looks healthy on the surface. It’s growing and expanding into new markets. It’s taking advantage of increased understanding about diseases and treatments, and society increasingly relies on “better living through chemistry.”
But this industry is prone to some side effects, too. And, at the risk of sounding like a pharmaceutical ad, these side effects could include impacts of healthcare reform, the loss of patent protection and increased costs of bringing a drug to market. Failure rates are high: the Pharmaceutical Research and Manufacturers of America (PhRMA) estimates that only 12 percent of molecules that enter clinical trials receive approval from the Food and Drug Administration (FDA).
It’s enough to make one reach for the latest pain reliever.
Despite all of the challenges it faces, the pharmaceutical industry continues to grow. According to a forecast from PwC, the industry will hit $1.6 trillion by 2020. The U.S. remains the largest single market at $425 billion. But growing markets—including China, Brazil, Russia, India, Mexico, Turkey, Poland, Venezuela and others—will combine for total sales of $499 billion, according to the PwC forecast, entitled “From Vision to Decision: Pharma 2020.”
Innovations are increasing along with the sales, according to PhRMA, which reports the FDA approved 51 new medicines in 2014, a number not seen for nearly two decades.
These statistics might seem that to indicate the industry is in an unabashed growth phase. But scratch a little deeper to find that those numbers mask significant transition.
By Sandy Smith