3 new trends in the Pharma industry that you need to consider

There are 3 new trends in the Pharma industry that you need to consider: from sustainability, to digitization, to the increasingly decisive importance of personalization.

The pharmaceutical industry is a large, dynamic and diverse industry that is experiencing continuous and impetuous growth. It is a strategic sector, and one that is currently in a historical phase as it engages in the fight against the Covid-19 pandemic.

In this moment of crucial and unprecedented challenges, the pharmaceutical industry must look to the future, to renew its processes, its technologies, its marketing, its ways of communicating with people. The good news is that it is already doing so; but the margins are still wide. In this post, we will focus on new trends in the Pharma sector.

Before we get started, it’s important to get an idea of just how large and dynamic this sector is. Let’s look at some data. 

According to “The Global Use of Medicine in 2019 and Outlook to 2023” by Iqvia, the global pharmaceutical market will exceed $1.5 trillion dollars in 2023 with a compound annual growth rate (CAGR) between 3% and 6% over the next five years (iqvia.com). These numbers are confirmed also if we focus on Italy: the Pharma sector in Italy grew 117% from 2008 to 2018. And if the average pharmaceutical expenditure over 2014-2018 was $34.4 billion, in the five-year period between 2019-2023, it will increase to between $40 and 44 billion.

Already today, the sector has about 67,000 employees and a production that is worth more than €32 billion, with a significant share — about 80% destined for export (farmindustria.it).

So, the numbers are really important. But we must always keep in mind that the panorama and the economic and social context are in continuous evolution and all the more so in this unforeseen and unpredictable historical period. This is why players in the sector must be on the alert, with their eyes focused on the future in order to see the next trend before the competition.

Speaking of trends: We will look at the Pharma industry trends around three macro-themes: sustainability, digitization, and personalization.

 

1. Sustainability and cruelty-free

First of the three trends in the Pharma industry: attention to environmental sustainability today must be at the heart of all business.

Both new and established businesses know that sustainability is an important keyword for their marketing operations. Even large, established companies, in all sectors, are re-designing their image and reputation on this new basis.

The pharmaceutical sector, of course, cannot be an exception.

But what is the main thrust of this new awareness? Quite simply, it is the customers themselves. Consumers are asking companies to pay more attention to environmental and sustainability issues, and they are doing so with increasing insistence. And businesses have a choice: embrace sustainability or risk losing customers to a competitor. 

Research from Global/Webindex conducted at the end of 2018 surveyed a sample of people aged 16 to 64, asking them if they were willing to spend more on eco-friendly products.

The answers?

  • yes, 58% of 16- to 21-year-olds are willing to spend more;
  • so are 61% of “millennials” (22 to 35 years old);
  • and so are 55% of people aged 36 to 54;
  • the percentage drops, but not by much, for “Baby Boomers” (from 55 to 64 years): 46% of them are willing to pay more for a green product or service.

Within the Pharma industry, moreover, the issue of sustainability is linked to the so-called cruelty-free, to which the public opinion is increasingly attentive and sensitive.

Here, the trend is around eliminating animal testing, and moving to “in silico”, i.e. experiments conducted through computer simulations. According to Liesbet Geris, executive director of VPH (Virtual Physiological Human Institute), the U.S. FDA is preparing for a future in which half of laboratory experiments will be conducted through computer simulations.

So, here is the fundamental importance of digital, the second of the trends in Pharma industry.

 

2. Digital will be the first ally of our health

Digitization is an unstoppable trend for all industries; once again, Pharma cannot and must not be the exception.

Digital Transformation in the pharmaceutical sector means a radical overhaul of production processes, commercial processes, and distribution mechanisms. It’s also about establishing a new relationship with its consumers

In short, it is a revolution that is changing the face of the entire sector and that is triggered by something very simple: the enormous amount of data — Big Data — that digital makes available. It is always through digital, in fact, that Big Data data can be interpreted and made operational.

Talking about digital in the pharmaceutical industry means talking about increasingly automated workflows and production, thanks to the processes of what is often called “industry 4.0”. It’s also about new methods for recruiting patients for clinical trials.

Digital is then translated into increasingly refined, targeted, and tailor-made marketing and also into a closer relationship with individuals, with the possibility of leading them through what is today defined as the “health journey”. Therefore, digital means predictive analysis based on data collection and also prevention that starts from increasingly advanced health-care systems

An example? Wearable devices that, by exploiting Internet of Things (IoT) technologies, provide us with a huge amount of valuable data that is increasingly dynamic and deep. Also, think about the frontier of telemedicine, which has been more urgent than ever, especially during the early days of the Covid-19 contagion.

In short, there are so many possible applications of digital in the Pharma sector, so much so that today we are talking about “Pharma 4.0”.

In addition, digital trends in this area are increasingly gaining traction in national (digital) health agendas. In Europe, Denmark and Germany are the forerunners (for more details on the Danish case, see here; for the German case, see here). In Italy, too, the digitization of healthcare is taking decisive steps to close the necessary gaps (source: agendadigitale.eu).

 

3. We are moving toward Personalization 

If the starting point of Digital Transformation is data, the point of arrival is definitely people. This must never be forgotten, because all the new trends of the future will come from this awareness.

The real revolution behind digitization, in fact, is the possibility to “know” your audience, its characteristics, its behaviors (and how they change over time), and, based on this, anticipate trends and needs over time. This can be done by identifying increasingly specific clusters, but the real turning point is to intercept individuals and interact with them.

All of this is becoming more and more central for the world of Pharma. The trend, in fact, is to embrace a perspective that goes beyond medicine, so not to limit itself to the production, distribution, and sale of drugs, but to create a wider, closer, and global relationship with patients.

A concrete example is offered to us by Roche, an industry giant, which in 2017, acquired the mySugr App. This app is aimed at diabetic patients, and utilizes modern engagement systems and interactive dialogue with the patient, even implementing gamification. All of this, of course, is based on personalization (roche.com).

Marcel Gmuender, who heads up Roche’s diabetes care unit, said that “The way forward will mean selling a total experience, not just a product”. It is certainly the right way; suffice it to say that only 47% of patients feel “understood” by pharmaceutical companies, from the point of view of their financial but also emotional needs (accenture.com).

There is much to improve, the margin is very wide, and the path to attack it is that of personalization.

Here, finally, the circle is closed. The attention to sustainability and new sensitivities of public opinion, the revolution and the challenges of Digital Transformation … everything, in short, today revolves around individuals.