Do or die for pharma

Pharmaceutical companies must make bold moves and "step outside of their sector" if they are to survive.

According to research by PricewaterhouseCoopers (PwC), the changing face of the global healthcare model will require holistic solutions rather than narrow treatments. To provide these, pharma companies will have to join forces with other parties, which may include academic institutions and hospitals, as well as companies offering compliance programmes, nutritional advice, stress management, exercise facilities and health screening, to "profit together".

And companies will need to be quick off the mark because several non-pharmaceutical companies have already taken action. Vodafone, for example, has joined forces with Spanish telemedicine provider Medicronic Salud and device manufacturer Aerotel Medical Systems to offer a wireless home monitoring service. Insurance provider Prudential is also collaborating with Virgin Active Health Club to offer a critical illness policy that provides subsidized gym membership and rewards people who exercise regularly by reducing their premiums.

"In the future, collaboration will be a 'do or die' requirement for pharmaceutical companies and healthcare payers alike," said Jo Pisani from PwC. She added that the traditional, fully integrated business model has enabled Big Pharma to "profit alone" for many years, with the top companies seeing their market value increase 85-fold between 1985 and 2000. However, this model is now under huge pressure and, if not already broken by 2020, it is predicted that it will not work.

And if the leading players in the industry cannot change their business model quickly enough, other firms may ultimately feature more prominently on the healthcare scene than pharma companies.

"Extensive collaboration will take many pharmaceutical companies out of their comfort zone, but it's the only way they will profit by 2020," Pisani warned.

www.pwc.com