GlobalData, a data and analytics company, on Monday said that inflation, coupled with drug pricing and reimbursement constraints, will put high pressure on the biopharmaceutical industry’s growth prospects in 2023.
According to the analytics company, the biopharmaceutical industry has long been labelled as recession-proof, with stable demand for medicines and new treatment options acting as a protective barrier.
A survey by GlobalData, as part of its ‘State of the Biopharmaceutical Industry 2023’ report, found that close to 40 percent of healthcare industry professionals viewed inflation as having the biggest negative impact on the biopharmaceutical industry in 2023, followed by pricing and reimbursement constraints (31 percent).
The biopharmaceutical industry will be impacted by a number of regulatory and macroeconomic factors in 2023, the data revealed. These include rising costs, geopolitical uncertainties, patent expirations, increasing demands to become more sustainable, and drug pricing pressures from cost-conscious regulators.
“While pricing and reimbursement constraints was scored as the most negative trend by the surveyed biopharmaceutical industry professionals between 2019–2022, inflation is predicted to bring the biggest negative impact to the sector in 2023. Inflationary pressures on labor, cost of raw materials, active ingredients, and intermediates will continue to bite into the net drug prices and the industry will need to find ways to offset this,” Urte Jakimaviciute, Senior Director of Market Research at GlobalData, said in a statement.
Even though COVID-19 vaccines allowed economies and societies to safely reopen, inflation will challenge ongoing post-COVID-19 recovery.
For the pharmaceutical industry, it means balancing between optimizing operational spend, reducing research and development (R&D) costs, and increasing drug prices, all while simultaneously navigating new regulations on drug pricing, it found.
“To sustain growth, the pharmaceutical industry will need to continue to innovate. This may include modernizing R&D models, addressing environmental, social and governance (ESG) issues, leveraging emerging technologies, and encouraging cross-functional or cross-company collaborations that may eventually help to move it towards this goal,” Jakimaviciute added.
