Three of every four pharmaceutical companies believe they are in the midst of a strategic crisis.

-more than 50% of the companies are willing to transfer their administration, I + D and sales to emerging markets departments

-costs of I + D have increased by more than 80% worldwide in the last 10 years

-the launch of new products has decreased 43%

Madrid, February 2013- three out of four companies in the pharmaceutical industry believe that they are in a strategic crisis, according to the study the pharmaceutical industry struggling for profitability ” conducted by Roland Berger Strategy Consultants. For this reason, 78% of respondents believe that they must adjust their business models to adapt to the new demands of the market.

While the ten major pharmaceutical companies were able to increase their sales by 13% between 2009 and 2010, its profit margin was reduced in the same period by nearly 4%. This equates to a loss of 34 million euros in benefits.

Markets such as Europe and the U.S. are suffering a stagnation due to pressure on prices, which is on the rise, regulatory changes in the health system and the admission requirements more stringent for new drugs.

The costs of I + D have increased by more than 80% worldwide in the last 10 years. And therefore, the number of new product launches has decreased by 43%. Therefore, nearly half of the companies surveyed believe that the return of investment (ROI) in the field of R + D is negative.

The rise in prices, regulatory changes, and the expiration of patents are leading to the reduction of the margins in the pharmaceutical industry. According to the makers of Roland Berger, “the global pharmaceutical industry is facing a major structural change. Although overall sales have increased in recent years, profit margins have been reduced considerably”.

In this context, one of the key measures that are willing to take is to focus its investments in the emerging markets of high growth, which means 40% of the world pharmaceutical market in 2016. More of 50% of the companies surveyed are willing to move his administration, I + D and sales to emerging markets. “This means that realign business models to adapt to the various products and markets with new requirements is essential to ensure the success of the business ”, say those responsible for the study.

“Emerging markets offer opportunities for growth, and could provide a solution to this situation. These markets will have an important role in the growth of the global pharmaceutical market momentum in the coming years.

Especially China, Brazil, India and Russia are experiencing above-average growth. “The rising purchasing power in these regions, the class average in growth and best health systems are driving demand for drugs,” plain members of Roland Berger. “Therefore, it is not surprising that many pharmaceutical companies are focusing increasingly on emerging markets to take advantage of the growth potential in these regions”.

About Roland Berger

Roland Berger Strategy Consultants, founded in 1967, is one of the leading strategic consulting firms in the world. With more than 2,700 employees in 51 offices in 36 countries around the world, we carry out successful operations in the most important international markets. The consultancy is an independent company that belongs exclusively to around 250 members.