Among the multitude of challenges that face the global life science industry, the reduction in the number of new drug approvals has put tremendous pressure on innovator pharmaceutical companies. Despite the FDA announcing 39 new drug approvals in 2012 – a 16 year high1 – the past decade has been characterised by a severe innovation ‘drought’ that has seen the number of new medicines fall to little more than half previous levels.
In addition to this, competition from generic manufacturers has exploded due to an increase in patent expiries. It is estimated that generic competition eroded US$67bn from top drug companies’ annual sales in the US between 2007–2012, with more than three dozen drugs losing patent protection during this period.2
Big Pharma/generics partnerships
Managing the complexity of drug development, approval and post-approval product maintenance processes, hiring specialists and the ability to manage fluctuations in resource demands are key issues that biopharma companies face. Traditional operating models are being pushed to breaking point because of cost pressures, emerging generic competition, governmental and political demands and the weight of supporting global distribution channels. In response, biopharma is exploring new growth opportunities in emerging markets, strengthening R&D by collaborating with industry and academic partners, moving towards a mixed portfolio of innovative and generic products and focusing on operational efficiency.
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