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Pharmaceuticals
Pharmaceutical firms, hugely profitable today, are urgently seeking cures to a variety of ailments.
One is the erosion of patent protection. Not only are the manufacturers of cheaper generic drugs becoming emboldened by cost-conscious politicians and legal rulings in their favor, but big pharmaceutical companies are also facing an unprecedented wave of patent expirations over the next five years. This trend is resulting in diminished profit margins.
The industry's best hope lies in innovation, its traditional strength. However, the difficulty and cost of finding and developing new blockbuster drugs have increased, and pipelines are looking increasingly dry. Companies are now reconsidering their pursuit of blockbuster drugs, as new technology permits the creation of niche remedies. Biopharmaceutical companies are also challenging traditional pharma, creating a number of high-margin sub-sectors in biotherapeutics.
To hedge risks in prescription drugs, many traditional pharma firms are looking to grow their own generics division, as well as increase their presence in diagnostics, non-prescription drugs and biotechnology. Mergers, acquisitions, and alliances are happening at an increasingly rapid rate. The deals in fact go beyond hedging risks in their traditional businesses and heralds a dramatic new convergence of drugs, devices and diagnostics which could lead to innovation and new opportunities for growth.
Clearstate can help traditional pharmaceutical companies better understand not only their own market environment better but those of the related healthcare sectors which they are being compelled to ultimately converge with.
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