With the global pandemic firmly in the rearview mirror, life sciences companies are looking at key macro- and micro-economic drivers to guide their future growth. While the list of trends with wide-ranging global impact is broad, in this year, life sciences enterprises are paying particular attention to those more disruptive trends.
In our 2024 Global Life Sciences Sector Outlook report, we emphasize these key trends such as increasing pricing pressures, the geopolitical environment, changes in US regulations, and the acceleration of Generative AI (GenAI) adoption to expedite drug discovery, reduce costs, and increase revenue.
With geopolitical, economic, and regulatory landscapes still proving uncertain, the life sciences sector will likely need to continue relying on innovation, agility, and collaboration as they build on their strong commitment to improving the lives of patients.
Life sciences in 2024 is expected to see cautious growth driven by strategic acquisitions and collaborations. While economic headwinds exist, particularly in China, overall M&An activity is predicted to rise, with pharma companies focusing on assets with high commercial potential. Venture capital (VC) funding will likely be selective, favouring companies with strong data and proven track records. Public-private arrangements also offer promising avenues for funding and advancing innovation. 2024 demands strategic agility and collaboration to navigate a dynamic market landscape.
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Generative AI (GenAI) is quickly evolving and affecting life sciences in significant ways. This technology has the potential to revolutionise everything from drug discovery to patient care by automating tasks, improve workflows and optimise processes, leading to significant cost savings and efficiency gains. The vast datasets of life sciences combined with the advanced AI capabilities of tech giants offer powerful synergies for drug discovery and healthcare innovation.
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Global pharma spending is rising, with a shift towards expensive speciality drugs. Governments are implementing price controls to manage costs, raising concerns about reduced R&D investment in the pharmaceutical sector. The US Inflation Reduction Act (IRA) allows Medicare to negotiate drug prices, potentially affecting innovation worldwide. Governments are exploring alternative models to ensure access to essential treatments for all patients, while fostering innovation in truly novel drugs.
Rising costs and shifting spending patterns: Global pharma spending is accelerating, fuelled by both population growth and a growing demand for expensive speciality medications
Global push for affordability through price controls: Concerns about affordability are leading governments worldwide to implement strict pricing controls on medications.
US price cuts raise innovation fears: The US drug pricing negotiations raise concerns about a potential decline in R&D investment by pharmaceutical companies facing lower profits. While some argue this could stifle innovation, others point out that R&D spending isn't solely tied to the number of new drugs and may even incentivise a focus on truly novel discoveries rather than incremental improvements.
Finding a balance: Affordability, innovation and patient access: Pharmaceutical companies face the challenge of developing strategies to make products commercially viable within pricing constraints. Government should address Issue like the high cost of developing treatments for rare diseases and streamline the lengthy drug approval process.
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Drug development can be viewed as slow and expensive. New technologies like AI are being explored to speed up the process and get treatments to patients faster. This includes better data management, using AI for drug design and collaboration between different organisations. Pharmaceutical companies should look to improve their R&D efficiency to bring treatments to market quicker. How can stakeholders prepare themselves to achieve this?
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Life sciences and medtech companies continue to adapt to a shifting global landscape. While traditional globalization is declining, countries are turning inwards, with China and the US playing key roles. Glocalization, a mix of globalization and localization, is driving changes in trade, manufacturing and R&D. Despite fluctuations in global trade, experts urge monitoring its evolution. Attracting and retaining talent is critical, with promising talent strategies being explored.
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Healthcare is shifting towards personalised care with a focus on improving patient experiences and outcomes. Shared decision-making (SDM) is a key component, allowing patients to actively participate in treatment choices. However, implementing authentic SDM remains a challenge due to varying patient preferences and provider mindsets. Life sciences companies can play a vital role in promoting SDM by educational resources, patient decision aids (PDAs) and optimising patient touchpoints.
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Review or download previous life sciences sector outlooks.
Interested in the trends and Issue affecting healthcare providers, health plans and government health organisations? Explore our global healthcare sector outlook.
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