Future of Pharmaceutical Industry
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Undoubtedly, the modernized pharmaceutical industry has faced numerous problems that can be better characterized by the acronym VUCA (v-volatility, u-uncertainty, c-complexity, and a-ambiguity). If to address current situation on the pharmaceutical market, it should be mentioned that volatility is characterized by rapid changing dynamics of global medical interaction with interfaces made by emerging post-modern innovative technologies carrying high rates of risks of fast obsolescence. Uncertainty is explained by the fact that nowadays medical workers and pharmaceutical manufacturers are unable to predict future outcomes of the increased prices of products and advent of new drug element popping-up in unknown surrounding. Complexity is characterized by the multiplicity of multifunctional medical-pharmaceutical interactions, and ambiguity can be explained by impossibility to fathom fast changes of healthcare providers/ payers that will influence cause-and-effect confusion by the pharmaceutical manufacturers and marketing players. It is clear that the pharmaceutical industry has been experiencing downright condemnation and scrutiny caused by social activism, the rise of civil rights, and improvement of patient advocacy. Due to informational and technological development, society has experienced a significant change. However, pharma industry has not adapted to these global trends but tried to isolate itself from the external rapid changes by lobbying and litigating with the aim to save status quo. Thus, it is highly recommended to investigate the development and challenges of post-modern pharmaceutical industry in order to articulate an effective strategy for pharmaceutical firms in the next ten to twenty years.
Historically it is known that pharmaceutical industry grew in 2005 comparing with previous years. For example, the revenue in 2005 equals to 602 billion dollars and in 1998, it was 289 billion dollars. Growth of this industry precipitated the growth of life expectancy, increased rates of social and economic incomes in poor countries and breakthroughs in evolution of new medicines (drugs for coronary artery diseases). Geogrphically, the growth of pharma industry is mostly located in the USA (the revenue is approximately 266 billion dollars) comparing to the European markets (177 billion dollars). The above example shows that the American pharma market is a key on the global pharma market. The growth of American pharma manufacturing can be explained by the numerous contributions to modernized technologies that precipitate the advent of new drugs. For instance, more than 40 billion dollars are spent into the restructuring of the pharma technologies and innovations. Moreover, pharmaceutical companies hired a big number of professional staff and scientists who are eager to make a meaningful contribution into global healthcare system. However, relocation of laboratories deteriorated the scientific procedures since most scientists and employees do not want to work in new accommodation. One of the challenges that modern pharmaceutical industry has faced is its focus on specific therapeutic diseases. Nowadays, the drugs against age, diabetes, and Alzheimer are very popular. There are many different types of medicine to treat these diseases and conditions. On the contrary, the diseases of a certain fewer group of people are not taken into consideration that means lack of efficient drugs. For example, malaria sickness that is referred as the most serious disease in developing countries has relatively low budget. Thus, it is clear that modern pharmaceutical companies focus more on popularity and needs of a big audience rather than requirements of minorities (Collis & Smith, 2007).
Critics have also argued that the drugs, such as “me-too” or “lifestyle” are more produced on the market comparing with “lifesaving drugs”. Personalized medicine totally displays a new trend in producing medicine, known as game-changing medicine. This name means that the patient has more power to create drugs for him/ her referring genes and biological structure. However, this liberty can cause numerous issues, such as further diseases and expensive drugs. While utilizing the personalized drugs, the pharmaceutical companies should take into consideration not only genomes and proteins, but also behavioral sub-segments that are common for certain nationalities or group of people. Many experts assume that the next generation of the pharmaceutical industry will be called an age of personalized medicine and designer drugs. Furthermore, such studies as genome, proteomics, and pharmacogenomics will evoke. It means that the drugs will not be indiscriminately produced but rather develop taking into account the genome structure of a person. (Kulkarni & Padilla, 2012)
One of the other vital characteristics of modern pharmaceutical industry is the changes of the leadership skill-set. Nowadays, pharma leaders face numerous issues, such as:
- Increased vigilance by state government even in developing countries.
- Heightened social activism against unfamiliar and unethical promotional practices by pharma manufactures that can further cause application of numerous restrictions and laws. This situation displays that society does not want to subsidize the social and economic spending of inefficient ways of business promotion and business doing.
- Active participation of government and its citizens in the pharma industry. This interaction will considerably deteriorate pharmaceutical manufacturing and price policy. It can be explained by the fact that now government has legal rights to implement different laws in order to control prices of important drugs or event to prevent manufacturing of certain medicine in certain countries.
- Heightened cases of compulsory licenses that will impair patent policy in favor of the patient, but not pharmaceutical manufacturers.
- Ambiguity and reversals in policy making.
In short, it is evident that patients have more legal rights, comparing to pharma producers. In this case, pharma leaders must be patient and adaptable to new changes in order to continue their businesses. The system of lobbying, lying, and litigation will not be effective anymore in the future. Thus, the world of VUCA has evoked. In terms of pharmaceutical notions, it can be described as a condition of constant flux.