Pharmaceutical companies without a digital platform are considered "lost"

Experts examined the data of the 21 largest manufacturers of products pharmaceutical companies around the world. According to EY, these leading pharmaceutical companies, led by Pfizer and Roche, increased their pharmaceutical sales in 2017 by only 0.4% to 447 billion euros. The total operating result of the group fell by 2.4% to 151 billion euros. Excluding currency effects, according to EY data still a more than 2.6% of sales, while the average pharmaceutical company's EBIT has declined slightly.

German pharmaceutical companies Bayer-Boehringer and Merck outperformed the competition, according to EY, with 3.3% sales growth and an EBIT increase of nearly 11%.

Overall, large pharmaceutical companies may have developed according to the trend of the industry. For example, according to more general data from the British pharmaceutical company Evaluate Pharma, the entire pharmaceutical industry, including the smaller players, has only progressed from the start. about 2.6% last year to reach the equivalent of about 700 billion euros. Based on estimates by banking analysts, Evaluate assumes that the industry will grow by around 6% a year for years to come.

It seems clear, however, that pharmaceutical companies must increasingly invest in growth, especially in product development. According to EY, the top 21 companies in the industry increased their research spending in 2017 for the second year in a row, disproportionately in relation to sales, by just under 6% for a cumulative total of About 85 billion euros

. Companies reduced significantly by 1.8 points to 26.5%, including other non-pharmaceutical businesses.

Compared to many other industries, large pharmaceutical companies still achieve very high returns. Big winners such as Gilead, Biogen and Amgen even record margins well over 40%.

Individual treatment becomes more important

However, according to Gerd Stürz, Director of Lifescience at EY in Germany, Austria and Switzerland, the downward trend in margins shows that pharmaceutical companies are under increasing pressure to develop innovations and new ones

"New methods of individual treatment will become more and more important in the future." Insofar as excessive dependence on blockbusters, ie particularly active individual active substances, could also constitute a risk. The e-efficiency of the pharmaceutical industry has improved significantly in recent years. Thus, according to the EY data alone, the number of active substances tested on patients last year increased by nearly a fifth to reach about 6,000.

The number of new registrations has also increased significantly. According to Siegfried Bialoyan, industry expert at EY, who heads the group's Life Science Center in Mannheim, high approval figures are a positive sign of companies' ability to carry out development projects expensive. "Breakthroughs in individual fields are also boosting the pharmaceutical market and spurring research and development." Nevertheless, it is questionable from the perspective of industry experts, whether pharmaceutical companies are focusing on drug development classics.

Although EY assumes that, for example, the pharmaceutical market in Germany will double by 2030 to about 63 billion euros. However, it should focus more on new IT-based health solutions, such as better drug use or better care systems

The pharmaceutical industry is at a turning point

A much of the added value could be lost There are no new players who, for example, develop and offer solutions based on Big Data analytics. From the point of view of EY experts, the activity of classical medicine could thus be more "commoditised" in the medium term, ie it could become an activity with easily replaceable products, rather low margin.

"The pharmaceutical industry is therefore at a turning point," says Jürgen Peukert, who heads EY life science consulting activities in Germany, Austria and Switzerland. According to him, he will have to rely much more on new business models and new partnerships to be competitive as a digital solutions provider.

Peukert talks about new ecosystems that could arise in this way and where participants would receive large amounts of relevant information. exchange to allow individual treatment methods.

Pharmaceutical companies, believes Mr. Peukert, can only master this challenge with a serious cultural shift, as they have to get closer to his point of view with completely new concepts for the company. In the future, it will be much more important for them to control this exchange of information with the digital technologies themselves. "Whoever has no platform has lost."