Pharma 2024: Geopolitical Tensions, Inflation, Drug Pricing Struggles

Persistent inflation, geopolitical conflicts, and the ongoing push to reduce drug prices will pose as the primary hurdles for the pharmaceutical sector in 2024 (). The report by GlobalData, a data and analytics company, based on a survey of 115 healthcare industry professionals, showed that drug pricing and reimbursement constraints elicited the strongest responses from survey respondents. The majority of these respondents viewed the trend as having a negative impact in 2024.

Geopolitical Conflicts and Inflation Heighten Negative Sentiment

This was closely followed by geopolitical conflicts and inflation -- both eliciting more negative sentiment as well.“Even though inflationary pressures are retreating, the other shocks may come, especially with global tensions mounting. Geopolitical tensions and conflicts bring uncertainty to the economic outlook as deteriorating relationships are often accompanied by numerous repercussions ranging from reduced cooperation, IPO market disruptions, to economic sanctions,” said Urte Jakimaviciute, Senior Director of Market Research at GlobalData, in a statement.

It was scored as the number one impediment to industry growth when healthcare professionals were asked to rate the most negative emerging regulatory and macroeconomic trends for the 2019, 2020, 2021 and 2022 industry outlook. It was only pushed down to the second position last year, when inflation took over the leading place as the most negative industry trend for 2023.

“While pricing control can lead to a more affordable healthcare for the public, it limits revenue growth for the pharmaceutical sector. Price controls -- which apply to medicines in most major markets -- mean that drug prices are not typically allowed to rise at the same rate as general inflation," Jakimaviciute said.

"Nevertheless, this may limit the revenue growth for pharma, with production costs on the rise: for example, due to suppliers rising the costs and employees expecting pay rises, drug production costs may increase well above inflation rates.

“While inflation peaked in 2022 in most of the markets, and inflationary pressures are slowly receding, it is above the 2 percent target consumers and business are still feeling the pressure of increased prices. Sharp monetary policy tightening seen in most of the markets can also lead to recession or hamper global growth,” Jakimaviciute said.

Reference:

1. Geopolitical conflicts, inflation, and drug pricing pressures will be top challenges for pharma industry growth in 2024 - (https://www.globaldata.com/media/pharma/geopolitical-conflicts-inflation-drug-pricing-pressures-will-top-challenges-pharma-industry-growth-2024-finds-globaldata/)

Source-IANS