Pharmaceutical and life sciences companies are among the most analysed and evaluated organisations in business today. Each company's financials, strategy and plans are scrutinised and compared to both current and historical benchmarks. In recent years, profitability has been lagging as many companies have been unable to sustain the robust growth that was once a hallmark of the industry. Considering the broader picture, analysts expect that the existing "blockbuster model" will be viable for the foreseeable future, but over time they suggest that a new approach will be needed to successfully address the difficult challenges ahead. The challenges are well known and include declining profitability, thinning pipelines, growing generic competition, and skyrocketing operating and marketing costs.
In the future, the approach that companies pursue will depend in large measure upon their individual goals. Whether they choose an innovation-based model built on the promise of personalised medicine or instead focus on an alternative operating structure such as the virtual organisation, inevitably companies will need to decide how to satisfy contending stakeholder demands while pursuing sustainable growth in a competitive market.
Challenges facing the Pharmaceuticals industry