What will be the key industry trends in 2017?
Industry uncertainty
Perhaps the biggest hallmark of 2016-going-into-2017 is the sense of hesitation and uncertainty as the industry waits with bated breath in the wake of the two biggest and most indisputable game-changers, not just for pharma, but for the world: Brexit and Trump. As we sit in the eye of the storm and they loom on the horizon, many industry figures are finding it difficult to strategise accurately for the future.
Throughout the year we asked for insight on these titanic events and what they might mean from a number of legal teams including Morgan Lewis, finnCap and BonelliErede. Be sure not to miss UK Biopharma and life after Brexit and The impact of Brexit on the pharmaceutical industry: Some preliminary considerations.
In the new year, companies will have to tread carefully until we better understand where these new factors will take us. Look out for our focus on how president Trump could shake up the industry in the upcoming issue of Pharmafocus.
Price hiking
The Mylan EpiPen scandal brought the issue of price hiking back into the public eye, and all the controversy that comes with it. After it was revealed that the company had raised the price of its flagship auto-injector by 400% since 2008, an indignant industry watched as CEO Heather Bresch was called before US lawmakers to explain the decision along with her own almost-700% pay rise over the same period. To calm the controversy, the company has finally launched a generic alternative, months late and still flashing a hefty price tag.
The wider issue featured heavily during the US presidential race as Clinton and Trump clashed over ways to curb outrageous pricing, and since then, former-democrat candidate and Vermont senator Bernie Sanders has led the charge against big pharma’s unjust measures, calling out Sanofi, Lilly and Novo for allegedly colluding to raise their prices. And as Trump was named president, price control measure proposition 61 was defeated by popular vote. We delved into the pricing crisis facing the US in our feature Price hiking: US pharma’s elephant in the room.
The problem has also been rife in the UK, as NHS suppliers were investigated over hiking the price of the drugs they provided by as much as 1000%, while Pfizer broke records by being hit with a massive £84.2 million fine for overcharging the health service by 2600%.
This is a problem that never went away and is only now being placed under harsh scrutiny, so expect more pricing scandals to erupt in the coming year.
Collaboration in the digital sector
2016 was characterised by a number of high-profile collaborations between tech and pharma giants in a bid to harness new and developing technologies to supercharge R&D, pharmacovigilance and more. In the latter half of the year, Google and its parent company Alphabet stepped into the pharma ring forming partnerships with GSK and Sanofi, while IBM forged alliances with Teva, Celgene and Quest Diagnostics.
Even Facebook chairman and CEO Mark Zuckerberg took centre stage in the industry, launching his $3 billion Chan Zuckerberg Health Initiative alongside his wife Priscilla Chan with a remit to "cure, prevent or manage all disease within [their] children’s lifetime". The initiative also managed to snatch up former chair of AstraZeneca’s genomics advisory panel Cornelia Bargmann as its president of science.
Looking forward to 2017, expect these types of deals to become the norm as the industry increasingly recognises the value and warms to the adoption of powerful new technologies.
Bigger mergers and acquisitions
2016 saw, after much deliberation, the biggest-ever acquisition by a German firm across any industry, the massive $66 billion Bayer-Monsanto deal, and ripples are still felt throughout the pharma world. Its long-term effects are still being determined, but we asked Winckworth Sherwood to analyse its potential impact and what it means for the industry, which you can find here: Looking back at the biggest deal of 2016: Bayer-Monsanto.
Acquisitions are just a part of the industry’s lifeblood, but as the precedent of increasingly larger deals is set, pharma companies may be seen to dig deeper in their pockets in future when looking to seize vital portfolio-expanding assets....
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