2009年-_PNJ99~9

Pharma 2020: Challenging Business Models Summary

Core Content

The document "Pharma 2020: Challenging business models" is part of a series by PricewaterhouseCoopers (PwC) that explores the future of the pharmaceutical industry. It argues that traditional, fully integrated business models will no longer be viable by 2020 due to significant shifts in the healthcare landscape. Instead, pharmaceutical companies must adopt more collaborative models to remain competitive and relevant in a market that increasingly values outcomes over products alone.

Main Trends and Challenges

1. Market Transformation

• The pharmaceutical industry is undergoing disruptive innovation driven by:
  • Rising healthcare costs and the need for cost-effective solutions.
  • Payers and providers gaining more control over prescribing and pricing.
  • Patients becoming more informed and active in their healthcare decisions.
• By 2020, payment for medicines will be based on outcomes, requiring companies to move beyond drug development into health management.

2. Technological Advancements

• Virtual R&D and digital health tools are enabling new ways of developing and delivering medicines.
• Semantic technologies, computer-aided molecule design, and virtual man models (computer simulations of human biology) are becoming more prominent.
• Remote patient monitoring via home systems, portable devices, and implants is generating valuable outcomes data that Pharma must access.

3. Global Demand and Economic Constraints

• Emerging economies will see the fastest growth in medicine demand over the next decade.
• However, these countries may struggle to fund this growth, necessitating collaboration with global partners.
• The economic downturn is accelerating the shift to collaborative models by increasing the pressure on payers to maximise value and by creating new opportunities for networking and partnerships.

Key Business Models and Variants

Federated Model

• Companies build networks of external and internal partners with a shared infrastructure.
• Mutual goals, shared funding, and interdependence are key features.
• Benefits:
  • Enables diversification beyond core offerings.
  • Combines nimbleness with scale.
  • Encourages cross-fertilisation of ideas and expertise.
• Risks:
  • Potential underperformance of participants.
  • Need for trust and governance to ensure fair rewards.

Virtual Variant of Federated Model

• Most or all operations are outsourced, with the company acting as a management hub.
• Advantages:
  • Reduces capital outlay.
  • Converts fixed costs into variable costs.
  • Increases flexibility and efficiency.
• Disadvantages:
  • Risk of supplier dominance or financial instability.
  • Dilution of earnings due to multiple participants in the value chain.

Venture Variant of Federated Model

• Companies invest in a portfolio of external firms in exchange for intellectual property or capital growth.
• Examples:
  • GlaxoSmithKline's SR One fund has invested in over 30 biotech firms.
  • Novartis, Pfizer, and AstraZeneca have also established corporate venture capital funds.
• Benefits:
  • Risk sharing and IP protection.
  • Opportunities to expand into new markets without large mergers.
• Drawbacks:
  • Earnings dilution if all participants expect returns.
  • Dependency on external expertise and performance.

Fully Diversified Model

• A model where companies operate across a wide range of therapeutic areas and services.
• Likely to be less common than the federated model due to its complexity and cost.

Implications for Pharma

• Collaboration is essential to improve R&D productivity, reduce costs, and manage outcomes.
• The value chain is becoming more interconnected, with payers, providers, and patients playing a greater role.
• New skills, technologies, and channels are required to meet the demands of a 21st-century healthcare market.
• Apple's model of controlling a network while outsourcing production is cited as a successful example of how collaboration can reshape entire industries.

Conclusion

The pharmaceutical industry must move from profit alone to profit together to survive and thrive by 2020. The federated model, particularly its virtual variant, is expected to dominate due to its cost-effectiveness and flexibility. The venture variant also offers strategic advantages but comes with its own challenges. Overall, the document emphasizes the need for multinational, multidisciplinary collaboration to align with the evolving healthcare landscape and deliver greater value to patients and stakeholders alike.