Date Added: May 2010
The global recession has undoubtedly affected the life sciences industries - which comprise pharmaceutical, biotechnology, and medical device manufacturers, as well as their service providers and distributors. The question is whether the impact is temporary or more strategic and long-lasting. In a survey of life sciences executives conducted by the Economist Intelligence Unit in collaboration with Deloitte Touche Tohmatsu's (Deloitte) Global Life Sciences and Health Care Industry Group, a majority of industry executives believe the effect of the downturn has been moderate and will only be temporary. Yet they also predict the demise of a large portion of the biotech segment and other more entrepreneurial enterprises. Also, a sizeable minority of 17 percent believe their company's strategy will change significantly as a result of the recession. That said, the survey results suggest the recession has created a new dynamic that will have long-term implications. Health plans, whether public or private, are focused intently on curbing cost. The industry faces the imminent expiration of many patents, which has significant revenue implications for the whole system. Evolving generics legislation, including the drive toward biosimilars, will encourage the continued push toward generic drugs. All of these trends were in play before the recession, but the downturn appears to have accelerated their impact. The unpredicted near-collapse of the capital markets has had a chilling effect on the entrepreneurial side of the market, which has all but ground to a halt. Survey respondents believe this is likely to have longer-term implications on where and how innovation occurs.