Six key risks facing pharma manufacturers in 2021
After weathering the storms of 2020, the pharma industry is on the way to recovery in 2021. But there are still major risks to be reckoned with.
COVID-19 has exposed weaknesses in global supply chains, consumer confidence is still far from fully recovered while consumer expectations are rising, fraudsters are running rampant – and there’s always the risk of falling off a patent cliff.
Read on for the six biggest dangers pharma companies must beware of in 2021.
1. Reduced demand for prescription medication
With a third wave rising in the UK, and major outbreaks still raging in countries like India, the pandemic is not over yet. Consumer confidence remains low, as does purchasing power, and fewer people are going to the doctor or hospital for non-COVID-related conditions.
All this adds up to ongoing low demand. But several industry observers have predicted a quick recovery once the worst is over, especially with promising new drug therapies in development.
2. Growing competition from generics
Several major medications are set to fall off patent cliffs this year, meaning they’ll lose exclusivity and generic copies can be marketed. This is bad news for the big manufacturers, but good news for smaller companies wanting to develop generics and for consumers looking for cheaper medication.
3. Pharmaceutical fraud
Pharma fraud has risen during COVID-19, and lawsuits and the recovery of money from fraudsters are likely to continue throughout the year, with a potentially large disruptive impact on the industry. Fraud prevention will be a key issue for manufacturers.
4. Rising consumer expectations and poor brand health
Pharma companies are squirming under the critical eye of consumers, making brand management particularly important this year. Consumers are becoming more likely to shop around for the best price when buying medicine and to expect more from the industry. This could be particularly tricky to manage given the ongoing disruption in supply chains caused by COVID-19.
The value of consumer data is rising, and with it the number of data breaches. Pharma companies are particularly vulnerable to cyberattacks; pharma was the fourth most-impacted industry last year and lost nearly £4 million to hackers.
Companies will need to invest in better cybersecurity both in the workplace and for home workers, who have been targeted by opportunist hackers during COVID. Internet-connected manufacturing technology like industrial IoT sensors may also need extra protection.
6. Supply chain disruptions
While global pharma supply chains survived the pandemic, they certainly didn’t thrive. Serious weaknesses have been exposed, leading to long manufacturing lead times and unpredictable ups and downs in demand, both of which are likely to continue for the rest of the year. Cybercriminals may also target supply chains, and poor visibility and transparency make all the challenges worse.
While the end may be in sight, managing these six risks will be vital to pharma companies’ success in 2021.