Biopharma companies worldwide are concerned about how best to demonstrate the value of their newly developed medications to healthcare payers, says a new report by the Economist Intelligence Unit. The value challenge, a report written by the EIU and sponsored by Quintiles, finds that many biopharma companies are responding to this challenge by making fundamental changes to their business.
Healthcare payers are demanding greater proof of value
Paradoxically, the challenge of demonstrating value stems from the industry’s past successes. With so many existing treatments already on the market, biopharma companies are finding it even more difficult to demonstrate the value of their new products to healthcare payers.
The value challenge has become even more acute given tighter budgets worldwide, with healthcare payers (particularly governments) focusing more closely on reducing pharmaceutical spending while increasing their demands for proof of value.
However, the EIU’s research also suggests that not everyone believes that healthcare payers are in the driver’s seat. In fact, while 41% of traditional biopharma respondents surveyed believe their market influence has decreased over the last three years, other stakeholders see biopharma companies’ influence as actually having increased.
’Value leaders’ are coordinating strategies across the company
The EIU found that companies that ranked themselves highly in both financial performance and in demonstrating value are implementing fundamental alterations to their business. These include changes in how research and trials are carried out, and in how their R&D department interacts with the commercial side of the company and with outside stakeholders.
Diallo Hall, senior editor at the EIU, said “This research offers a fascinating view into how biopharma is attempting to come to terms with a changing world, where traditional business incentives are colliding with the shifting priorities of payers and other stakeholders.”
Reinventing biopharma: Strategies for an evolving marketplace – The value challenge
is available free of charge at
http://www.managementthinking.eiu.com/value-challenge.html
Press enquiries
Joanne McKenna, press liaison, +44 (0)20 7576 8188; joannemckenna@economist.com
Diallo Hall, senior editor, +1 212 698-9781; diallohall@eiu.com
Notes for editors
The value challenge is the second paper in four-part research programme, Reinventing Biopharma: Strategies for an evolving marketplace, sponsored by Quintiles. The innovation imperative in biopharma, published in July 2011, was based on a global survey of over 280 senior executives from the life sciences industry. The report explored the drivers of and barriers to innovation in biopharma companies. The paper was followed by The value challenge, published in February 2012, which looked at how the industry is addressing the challenge of proving and demonstrating the value of a new drug. The findings were based on a survey of nearly 400 senior executives from the life sciences industry.
About the Economist Intelligence Unit
The Economist Intelligence Unit (EIU) is the world's leading resource for economic and business research, forecasting and analysis. It provides accurate and impartial intelligence for companies, government agencies, financial institutions and academic organisations around the globe, inspiring business leaders to act with confidence since 1946. EIU products include its flagship Country Reports service, providing political and economic analysis for 195 countries, and a portfolio of subscription-based data and forecasting services. The company also undertakes bespoke research and analysis projects on individual markets and business sectors. More information is available at www.eiu.com or follow us on www.twitter.com/theeiu.
The EIU is headquartered in London, UK, with offices in more than 40 cities and a network of some 650 country experts and analysts worldwide. It operates independently as the business-to-business arm of The Economist Group, the leading source of analysis on international business and world affairs.
About Quintiles
Quintiles is an integrated biopharmaceutical services company offering clinical, commercial, consulting and capital solutions worldwide. The Quintiles network of 20,000 engaged professionals in more than 60 countries around the globe works with a commitment to patients, safety and ethics. Quintiles helps biopharmaceutical companies navigate risk and seize opportunities in an environment where change is constant. For more information, please visit www.quintiles.com<http://www.quintiles.com/>/newhealth
