Business Models to Adopt in Pharma Sector – 2020 


It is a well-known thought that the pharmaceutical sector is affected by the rapidly shifting dynamics of the market. To sustain and be profitable, pharma companies are increasingly pursuing new revenue models. Business models such as outsourcing, mergers, and acquisitions, in & out-licensing, are being embraced at a rapid pace. Additionally, pharma majors are shifting their focus away from chemical-based molecules to biology-based to flow with the opportunities the latter established.  

To provide impetus to their growth, pharma companies are laying out short- and long-term strategies. While Short term strategies focus on fighting patenting issues long term strategies aimed at improving research and development, network models, outsourcing, biotech, etc.  

Pharma companies are working hard on long term issues even while striving for larger market shares. Market Growth Factors The pharma market is being adversely affected by declining R&D productivity, high cost of commercialization, reducing selling rates, and lower consumption. However, an unexplored market segment has opened up due to advancements in nanotechnologies, the need for more effective drugs, and growth in the biotech sector. The key players are exploring efficient ways to adopt the network model for R&D. 

Market capitalization is one of the primary business goals of pharma companies, they are pursuing towards gaining institutional support, access to funds for faster go to market, etc.  

Prominent Short- and Long-term Strategies to Enhance market capitalization include –

Long Term Strategies 

  • Forward Integration – With forward integration, pharma companies are now able to access their customer data with ease, resulting in effective research and development. With the help of information systems such as Telemedicine, Kiosks, Remote monitoring of patients, etc, access much-required information. 
  • Targeted Treatment Solutions – Instead of spending millions of dollars on marketing and sales, companies now can reach out to its targeted patient groups with disease management and treatment solutions.  
  • Biotech and Genomics – Biotech and Genomics are complex in comparison to chemical-based drug development. This complexity has resulted in higher costs and a shortage of capacity. Companies that have developed proficiency in this space have a huge opportunity as a result of lesser competition.  

Network Models 

  • Outsourcing – Third-party Manufacturing and research have completely changed the way pharma companies operate. With fully compliant third-party manufacturing companies taking shape, opportunities in reducing costs are getting deep.  
  • In and Out Licensing – Pharma companies are increasingly turning out to be integrators and marketers with new in and out-licensing network approach. Outsourcing of research and manufacturing make part of this networking model.   
  • Product Life Cycle Management – Product life cycle management (PLM) helps to get more value from the existing products, mitigate risk in R&D, and reduce the entire life cycle for the launch of the products. 

Short Term Strategies include – Semi Block Buster Model, Pre and Post Patent, Removal of Parallel Trade, etc.  

Final Thoughts… 

Actively embracing these short, mid, and long-term strategies are a sure shot win for pharma companies in the coming years.  


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