Industry Trends

The sector has seen an increase in demand for many of its products and services during the Covid 19 pandemic. Vaccine production will provide a boost for many years. More generally, ageing populations in developed countries, better accessibility to healthcare in many emerging countries and new drug developments drive growth.

The industry is thoroughly regulated, and regulations affect most activities, e.g. the patenting, testing, safety, efficacy, production and marketing of drugs. Regulations are tightening in many areas. The value chain is characterized by the long time and significant cost (and risk) of bringing new products to market.

It is one of the most R&D intensive sectors there is. Hence, there are many life science clusters close to higher education facilities and these are often choice locations, especially for R&D sites and start ups.

Big global pharmaceutical companies are research based and typically have capabilities across the full pharma value chain. They are increasingly partnering or in agreement with smaller companies and academia to speed up drug development and reduce costs. The fast development of Covid 19 vaccines is an example of this.

There are also companies that focus on bringing generic drugs and biosimilar products to market once patents have expired. Demand is increasing because of significant pressure to reduce or control drug costs in most countries.

In the wake of the pandemic there has been suggestions of re shoring production capacity in some countries as the global supply chain turned out to be vulnerable.