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Pharmaceutical, Biotech And Medical Device Companies Need To Adopt Dramatic Changes


( Abstracted from a survey conducted by Deloitte )


A recent survey of top executives at pharmaceutical, biotech and medical device firms conducted by Deloitte reveals these companies will likely need to adopt dramatic changes in their business strategies between now and 2015 if they want to maintain their success.


The following is a list of changes ahead and what they mean for companies as per the interview given by United Press International interviewed Jacques Mulder, one of the main authors of the report and a principal within Deloitte's life sciences and health care practice :


Major Trends


Companies expect that more than 50 percent of their revenues by 2015 will come from products and services they don't offer today.


There are companies that are starting to diversify into partial ownership of treatment facilities. So in the future, not all revenues may come from sales of purely drugs or devices or biologics, but there may be other offerings, such as disease management or other services that go just beyond the supply of products.


What companies might be engaged in these trends?


Five years ago, we had a distinction between biotech and pharmaceuticals, there's almost no major pharma company today that doesn't have a biologics portfolio. So there really is very little differentiation between biotech and pharma companies.


Medical device companies are seen starting to put drugs on devices, anti-infective coatings, anti-clotting agents like with the drug-eluting stents.


Significant advances are also seen in the convergence between diagnostics and therapeutics. Companies are applying diagnostic tests, genotyping, phenotyping even, or using biomarkers to select patient populations that would be more responsive to certain therapies.


Convergence between biotech and pharma


Convergence between biotech and pharma is anticipated to be happening more and more.


Major companies and smaller ones are likely to be getting much, much closer together and leveraging technology and leveraging each other's science to bring products and new applications to market.


About medical device companies applying drugs to their products


The trend of medical device companies applying drugs to their products will lead to them acquiring pharmaceutical companies or vice-versa.


Because there is such pressure on the research and development pipeline which is resulting in two trends :


One is for device companies that want to put product onto their devices or to enhance their performance.


They really don't have to deal with the scientific risk of the chemistry because that's been proven in the human body. So it almost becomes a new model of development.


Also to find different applications for a product that's been around for a while.


About the impact of these changing trends and models to companies


A very high level of alliance formation.


More co-development and research alliances between small and larger companies is expected . Small and large companies are going to be moving much closer together and collaborating much more to get science out into the market -- and ultimately to the patient -- than in the past.


Not necessarily going to be acquisitions the way seen for the past 10 years, but much more of that collaborative alliance.


By 2015, how will the landscape look?


The first is the markets the major companies are focusing on, being North America, some of the major European countries and now, of course, with China and India and some of those markets really evolving and Africa, the foot print of activity globally is going to shift.


Companies that will be successful by 2015 will be the ones that have been able to use and successfully leverage developing economies. Not just to get access to people because the war for talent is significant at this point in time. Where do we find the right scientists to be able to fuel and sustain our need for new research and new discoveries? Those markets will become global very, very quickly. There are significant benefits and we see pretty much all of the major companies making a play for utilizing science and also access to patients in some of the developing economies because there's real competition for finding trial subjects. In diabetes for instance, finding patients you can actually do clinical work on is becoming a competitive advantage. Expansion to new patient populations is important. And of course, companies that have the ability to adjust their business models in such a way that they can actually do profitable business in these developing environments will be ones that will be successful by 2015.


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