Taking the pulse of the pharmaceuticals industry

The global pharmaceuticals industry saw pandemic-driven growth over the past two years and is currently enjoying a bright outlook.

Four main areas present growth opportunities for pharmaceuticals

According to Atradius research the global pharmaceuticals industry is largely facing a clean bill of health. The majority of developed markets can be assessed as “good” for both performance and credit risk indicators. As a whole the industry performed well during the pandemic economic downturn and growth forecasts are upbeat for the most part.

Drilling down beyond the headlines, the Global pharmaceuticals industry: opportunities and challenges white paper notes four main areas for industry growth while also recognising that not all pharmaceuticals producers and wholesalers had a “good pandemic”. Combining data from business analysts Oxford Economics with insight from Atradius experts, brokers, pharmaceuticals businesses and bodies such as the World Health Organization, this report provides insight to market developments within the pharmaceuticals sector worldwide.

The ongoing need for testing, vaccines and treatments for Covid-19

Many areas of the world are still to be vaccinated against Covid-19 and, especially in the light of new variants and new waves of the virus, there is an ongoing need for boosters. This ongoing need will continue to support the output of vaccine developers, producers and wholesalers over the coming months and years. What’s more, a rise in the need for healthcare services to support long Covid-19 patients and clear healthcare backlogs is likely to boost pharma output further.

Opportunities presented by ageing populations

People throughout the world are living longer, often with multiple complex and chronic conditions. This creates demand for high value-added speciality products, particularly for chronic diseases, and delivers opportunities for the pharmaceuticals industry.

Economic growth in emerging markets drives pharmaceuticals industry

As middle-class incomes expand in emerging markets, many healthcare systems are improving and there is growth in demand for over the counter medicines.

Edwin Kuhlman, Head of Underwriting & Head of Global Commercial Underwriting Team at Atradius said: “Emerging markets present a significant growth opportunity for the pharmaceutical industry. However, many emerging markets also carry elevated levels of risk.

Opportunities for R&D presented by financing

Appetites among lenders to support R&D costs remain strong, underpinned in many markets by government support. Governments across the world from the US and UK to India and China and more have recently announced huge investment programmes to support and strengthen local industry.

Digitalisation in the pharmaceuticals industry

Digital transformations will have an impact on pharmaceuticals. From the delivery of healthcare and clinical appointments to the diversification of operating models, the industry is undergoing rapid change. Central to this is the use of AI and big data in research and in enabling patients to manage their own conditions (particularly in areas such as diabetes and heart health).

Challenges facing pharmaceuticals industry

Many of the challenges facing the pharmaceuticals industry are regular issues and present a familiar face. Patent expiries are a common issue that most patent-owners will have navigated before. As well as presenting a downside risk to the patent holders, patent expiration also presents opportunities for developers seeking to launch generic products based on the patented recipe or design.

Regulations, licences and environmental legislation can also present challenges for the pharmaceuticals industry. As with issues concerning patent expiry, these are not new challenges and most industry players will have strategies in place to address them. However, these are not the only government interventions that may pose challenges to the industry. Some governments, particularly in the EU and the US, are looking to introduce plans to shorten supply chains. Many governments are also reigning back spending on healthcare and removing fiscal support enacted during the pandemic, both of which could negatively impact some pharma businesses.

Download the Pharma report here