Six major threats that pharmaceutical firms will face in 2022
Pharmaceutical makers are on pace for a turnaround in 2022, following one of the most turbulent years on record. Even though consumer trust is returning and the end of the pandemic is in sight, the pharmaceutical business still faces enormous danger.
The COVID-19 epidemic highlighted flaws in the industry’s worldwide supply chain, and while customer confidence is returning, it is still far from average. Businesses in the sector are likely to confront several significant risks through the end of the year, six of which are detailed below, including lower-than-average consumer confidence, pharmaceutical fraud, patent cliffs, and rising customer expectations.
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1. Less demand for prescription drugs
While the end of the pandemic is in sight, it is far from done. Globally, the number of COVID-19 cases increases and severe outbreaks afflict nations like India.
We won’t know what the recovery will look like until later in the year when vaccines become more widely distributed around the world.
The residual effects of COVID-19 will continue to have a significant impact on the industry through the end of the year, in part due to lower-than-usual consumer confidence, which means lower-than-usual demand for pharmaceuticals. Furthermore, since unemployment remains a global issue, customer spending power may remain low.
The future looks bright for businesses that can withstand the last few months of lower-than-average demand. Some industry observers expect that the pharmaceutical sector will return to its pre-pandemic solid growth levels. As the pandemic recedes and the economy recovers, factors including an aging global population, rising prevalence of chronic illnesses, and the development of new medicinal therapies will boost growth.
2. Generic medications are becoming more and more competitive.
It’s bad news for certain pharmaceutical businesses but good news for generic pharmaceutical companies and consumers who want to save money on drugs.
Lucentis, a drug with 2020 sales of over $1.6 billion, and Bystolic, a blood pressure treatment with 2019 sales of $600 million, will lose US exclusivity this year.
Risks associated with patent cliffs will be a crucial concern for significant businesses. The effect on the rest of the sector is expected to be enormous and might open up new opportunities for smaller firms, as it has already done for larger ones.
3. Fraud in the pharmaceutical industry
As a significant problem for the pharmaceutical sector, pharmaceutical fraud got even worse under COVID-19. According to industry experts, the pandemic is expected to contribute to higher-than-average recoveries of health care fraud this year.
An unlabeled vial marked “COVID-19 Vaccine” with a red stamp reading “FAKE” over the label conveys the notion of counterfeit vaccines.
It was estimated that Purdue Pharma paid up $4 billion in settlements connected to opioid-related litigation by the 16th of March, giving the US government $8 billion.
The False Claims Act rewards those who come forward with information regarding possible average sales price fraud, clinical trial fraud, good manufacturing standards (GMP) fraud, and industry kickbacks. Is one such regulation in the United States that helps prevent or expose health care fraud.
We may have seen a decrease in pharmaceutical fraud due to this legislation. Still, we may expect huge recoveries throughout the year, which might significantly influence industry-wide activity.
4. Increasing consumer expectations and challenges in maintaining brand health.
Fraud is intertwined with another big danger for the pharmaceutical industry: a decline in the brand’s reputation. Customers are putting a lot of pressure on pharmaceutical businesses, which means that brand management maybe even more crucial than usual for the rest of the year.
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On the other hand, consumers have higher expectations of the pharmaceutical sector. It is becoming increasingly customary for customers to carefully analyze the dollar value of medicine and shop around when purchasing medication.
Through the year, pharmaceutical companies will need to manage rising customer expectations and be prepared to respond to brand crises, which may develop due to COVID-19’s continued disruption of supply chains, for example.
5. Cybersecurity concerns, such as data breaches
As consumer data becomes more valuable, the number of cyberattacks on businesses and individuals increases.
Pharmaceutical companies are particularly exposed to cyber-threats because of their sensitive information. According to IBM’s 2020 Cost of a Data Breach Report, cyberattacks cost the industry more than $5 million last year4, ranking it as the fourth most damaged industry, trailing only health care, energy, and finance in terms of financial losses.
Security breach, system compromised alert with a red broken padlock sign indicating unsafe data being subjected to a cyberattack.
A rise in internet-connected manufacturing technology — such as industrial IoT sensors — in the manufacturing sector may make production facilities more vulnerable to cyberattacks.
The investment in cybersecurity will need to expand in the future as cyberattacks become a more dangerous to the sector. Better cybersecurity measures in the office and for remote workers will also be required, or companies will face the prospect of an expensive data leak. Adopters of IoT technology may also need to make investments in IoT security, which will need additional resources.
6. Delays in supply chains
While the COVID-19 pandemic did not destroy global pharmaceutical supply systems, it showed severe flaws in pharmaceutical logistics.
The industry’s lean supply chains are not responsive to unexpected disturbances or production challenges induced by events like pandemics. The year’s end is likely to be plagued by extended manufacturing lead times and unpredictable demand.
Cybercriminals may potentially target the supply chain.
Moreover, poor supply chain visibility and transparency may exacerbate some of these issues.
Manufacturers may have to change how they make things in 2022.
There is a chance that things will get better soon, but pharmaceutical companies still have many risks to deal with this year.
Fragile global supply chains, more health care fraud, and weak demand will all be problems for manufacturers in the coming years. It may be difficult for manufacturers to deal with the rise in cyberattacks, especially those that spend a lot of money on new manufacturing technology.
A business that doesn’t deal well with these risks in 2022 will likely fail.
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Reference pharmaceutical UCGconferences press releases and blogs