Industry Trends

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Big pharma has become increasingly vulnerable to larger geopolitical and macroeconomic risks-a realization that has slowly creeped into their business planning.

As market headwinds persist, our latest industry review of shareholder value reveals a sharp performance differential between companies that pursue a strategy of specialized therapeutic focus and those that continue to rely on line diversity, size and scale.

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With our annual Industry Audit marking its 15th year, we decided to compare 2002 approaches in boosting shareholder value to those of today. The fall in one particular performance metric is telling.

A new discipline-population health-contests disease treatment as an end in itself. It asks: besides advancing the science of medicine, what do biopharmaceuticals actually do to improve health overall?

Driven by knowledge advances and the importance of a more collaborative commercial model, intellectual property (IP) has morphed from an arcane, specialized function dominated by technicians to a showcase strategic priority of the “c-suite.” This trend is hardly restricted to the life sciences. In fact, some of the most creative work in using IP tools to extract more value from knowledge assets is taking place among businesses that operate across multiple sectors.

After a sharp spike in revenues, this year’s audit finds our 25 companies doubling down to secure the operational efficiencies that promise to better align with an increasingly tightfisted payer community. Never before has market relevance been so firmly linked to customer reputation.

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A closer look at our Industry Audit numbers hints to a clear divide between two alternative strategies for long-term growth: scale versus focus.