Friday 23 June 2023

Why Does the Pharmaceutical System Owner Need to Embrace Innovation?


Innovation is a vital characteristic for the modern pharmaceutical system owner to have. Some of these leaders feel content to keep doing things the same way they always have. However, that approach can cause stagnation, which reduces profitability and hinders growth.


By Emily Newton

Innovation Could Conquer Falling Returns on Investment

The pharmaceutical industry's research and development (R&D) phase is massively costly. Still, it can have significant payoffs when company representatives make discoveries that could change patients’ lives and the world.


However, a 2023 Deloitte study showed that projected returns on investment (ROI) had reached the lowest point in 13 years and the average peak sales per asset were down. While projected ROI returns are at 1.2%, the peak sales average is $389 million.


Compare those figures to the previous year’s report when ROI returns were 6.8%, representing a historic rise. The peak sales per asset were $500 million on average, showing things are going in the wrong direction.


The significant change in just a year emphasizes people cannot take any industry success for granted. Even if a modern pharmaceutical system owner has a record-breaking year, that feat may not continue for the next 12 months.


However, pursuing innovation can allow a business to build resilience in various ways. If R&D efforts do not go as planned or drugs fail in trial phases, an innovative focus could give people more options to make money elsewhere.

Innovation Boosts the Public Perception

Aspects like high drug prices and the pharmaceutical industry’s long history of lobbying have contributed to some people having a less-than-favorable view of it. However, a 2022 survey of respondents in 11 countries showed innovation helped improve the sector’s reputation.


For example, 68% of those polled agreed the pharmaceutical industry leads in technological advancements related to the COVID-19 pandemic. Additionally, 67% believed the pharmaceutical industry was a leader in developing innovations to fight future public health threats.


Additionally, 62% of respondents thought pharmaceutical companies invest lots of money to find innovative treatments or cures. The same percentage of participants also believed the pharmaceutical industry is more effective than governments in discovering new medicines and developing vaccines.


Another finding was 60% felt research-based biopharmaceutical organizations make positive societal contributions. Research commonly drives innovation, so it is positive that most respondents see its value.

Innovation May Overcome the Skills Shortage

The pharmaceutical industry is like most others in that it is dealing with a skills shortage. Thus, human resources representatives are examining the most effective ways to attract more workers. It became apparent during the COVID-19 pandemic that the industry did not have a large enough workforce to meet the increased demand.


If the modern pharmaceutical system owner focuses on running an innovative business, candidates could see the company as a future-focused option that fits their career goals. Relatedly, suppose they perceive the organization as on the cutting edge. Many candidates will look forward to the opportunity to use new technologies and grow their digital skills while at work.


Representatives from many innovative pharmaceutical enterprises will also recognize the value of using digital tools to attract or retain candidates. That may mean shooting a video or creating an immersive experience that shows potential new hires what to expect from a typical day at work. Such content could disprove incorrect assumptions and excite people about what is in store for the pharmaceutical industry.


Some biopharmaceutical companies use virtual reality simulations to teach new employees. That approach causes up to a 33% reduction in the time to get people trained. Depending on the nature of a simulation, it could also cut material costs because learners do not have to use physical supplies as often to learn the necessary skills.

Innovation Can Align With Regulatory Changes

Since the beginning of biopharmaceutical manufacturing more than four decades ago, the world and industry have undergone many changes. Company representatives working in this space have updated their processes and products to remain innovative.


Sometimes, that commitment to staying current can help the modern pharmaceutical system owner respond to changes outside their control. For example, the European Union is in the middle of substantial regulatory reform. One of its highlights concerns regulatory protection of 8–12 years for qualifying, innovative medicines. That period is in addition to any applicable intellectual property safeguards. Another innovation-related aspect of the EU proposal is the distribution of vouchers to businesses investing in new antimicrobials that target known resistant pathogens.


In the United States, the Biden-Harris administration has focused on biotechnology and biomanufacturing research. The hope is such investments will help the United States achieve several broad goals, including those beyond the pharmaceutical industry.  For example, meeting the stated milestones would stimulate job creation and strengthen the supply chain.


Even the most astute modern pharmaceutical system owner cannot predict the future with certainty. However, it is safe to bet innovation will play a major role in what is ahead.

The Modern Pharmaceutical System Owner Must Prioritize Innovation

There are many reasons why the modern pharmaceutical system owner must invest in innovation. Doing so will increase their chances of success and resilience in an often challenging and rapidly changing industry.


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