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Deloitte 2013 global life sciences outlook: Industry adopting new business model to address changing landscape, declining profit

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Patent expirations, regulatory scrutiny and shifts in innovations are prompting change

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New York, NY, 11 December 2012 — In an effort to deliver better patient outcomes while at the same time counter slow market growth and declining profitability, the global healthcare industry has adopted a new business model that shifts its focus from developing blockbuster drugs and building pipelines to business portfolio evolution, the regulatory landscape and emerging markets and treatment changes outcomes, according to a new report by Deloitte Touche Tohmatsu Limited (DTTL).

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Carolyn Vadino

Deloitte Touche Tohmatsu Limited

Global Communications

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The report 2013 global life sciences outlook: Optimism tempered by reality in a “new normal” concludes that the primary drivers behind this shift are expiring patents and generic competition, pricing pressures, heightened regulatory scrutiny, expansion into emerging markets, increasing alliances and acquisitions, and a persistent economic slowdown.

“To grow in this challenging climate, the global life sciences industry is transitioning away from a primary-care, small-molecule-driven sales model towards targeting specialist secondary care indications through the use of high-value biologic therapies in the developed markets, while also taking a global perspective by marketing branded and off-patent medicines in the fast-growing emerging markets,” said John Rhodes, Life Sciences Sector Leader, DTTL. “Cost savings facilitated by mergers and acquisitions are also set to bolster profits.”

The report also closely examines the current state of the global life sciences industry and the top issues facing stakeholders. It provides a snapshot of activity in a number of geographic markets such as health care reforms, cost controls, government industry incentives and economic impacts on the industry, along with considerations companies may adopt to grow revenue and market share in 2013 and beyond. Other key aspects of the report include:

  • Overview of the global trends that have fueled industry growth and the long-term implications
  • 2013 challenges and opportunities emanating from the major issues that global life sciences companies face
  • Considerations around Research and Development (R&D) future models; brand strategy and pricing; mergers and acquisitions (M&A) and collaborations; operational efficiency; new commercial models; health analytics; and regulatory compliance
  • Market updates from the Americas (Brazil, Mexico, and the United States); EMEA (GCC States, Germany, Russia, Turkey, and the United Kingdom); and Asia (China, India, and Japan).

“While the industry’s medium-term outlook is boosted by increased sales volume and longer exclusivity for biologics, pressure to deliver better outcomes at lower prices will not ease since economic conditions are unlikely to improve, especially in the developed countries,” Rhodes stated. “Also, generic competition will continue to eat into branded sales. It is imperative that life sciences companies gain a clear understanding of the changing ecosystem and shifting influence patterns that affect product utilization and adoption to survive and thrive in the ‘new normal’.”

2013 Global life sciences outlook

About Deloitte

Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee, and its network of member firms, each of which is a legally separate and independent entity. Please see www.deloitte.com/about for a detailed description of the legal structure of Deloitte Touche Tohmatsu Limited and its member firms.

Deloitte provides audit, tax, consulting, and financial advisory services to public and private clients spanning multiple industries. With a globally connected network of member firms in more than 150 countries, Deloitte brings world-class capabilities and high-quality service to clients, delivering the insights they need to address their most complex business challenges. Deloitte has in the region of 200,000 professionals, all committed to becoming the standard of excellence.


About the DTTL Global Life Sciences and Health Care Industry Group

The DTTL life sciences and health care (LSHC) industry group is composed of more than 7,600 professionals in more than 69 Deloitte member firms. These professionals understand the complexity of today’s life sciences and health care industry challenges, and provide clients with integrated, comprehensive services that meet their respective needs. In today’s environment, LSHC professionals from across the Deloitte member firms help companies to evolve in a changing marketplace, pursue new and innovative solutions, and sustain long-term profitability. For more information about the DTTL LSHC industry group, email dttlshc@deloitte.com or access www.deloitte.com/lifesciences.

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