Pharma Gears Up to Boost Working Capital Efficiency

July 30, 2015

July 30, 2015.

UK Consulting firm Frost & Sullivan reports that efforts to improve working capital efficiency are becoming "entrenched in the growth strategy of pharmaceutical firms in North America and Europe". The realization is, it is said, that an effective working capital management will ease the difficulties caused by low sales, pricing pressures and patent cliffs. Big pharma companies expect to invest in optimizing working capital efficiency to bolster returns.   The report Working Capital Management in the North American and European Pharmaceutical Industry reveals companies in the U.S. effectively managed to reduce the cash conversion cycle by 44.2 percent between 2012 and 2013. European companies were not as successful, managing to reduce the cash conversion cycle by 26.2 percent between 2012 and 2013. The cash conversion cycle is an indicator of working capital efficiency.   Decreasing profitability, fizzling innovation, price premium pressure and access to new markets are all issues that highlight the importance of effective working capital management, Frost & Sullivan states.   For more on this research, visit: http://corpcom.frost.com/forms/EU_PR_AZanchi_NEAF-F1_30July15