Global cost pressures and a fast-changing political and regulatory landscape indicate that the pharmaceutical industry is at an inflection point as we head into 2025. Manufacturers must fundamentally rethink their models, focusing on long-term value, evidence-based decision-making and strategic collaboration. At a macro level, the single biggest factor in the current landscape is continuing pressure from both government and private payers to reduce the cost and ensure the value of drugs.
Across the globe, government payers are raising the bar for market entry. This takes the form of increasing evidentiary requirements and growing complexity in rules that govern reimbursement. This is further amplified in the U.S. market by the consolidation of healthcare delivery into fewer, more complex and powerful healthcare systems. Not only do these healthcare corporations bring substantial market clout to the negotiating table, but they are increasing their centralized control over the drugs, devices and tests used across the sprawling inpatient and outpatient facilities they control. And while they don’t have as much influence as global corporations or national governments, pressure to lower drug prices is also driven by consumers who are struggling financially, burdened by many factors, for whom the cost of drugs is a proxy for the spiraling cost of healthcare. More than ever, this year’s challenge for pharmaceutical manufacturers will be about responding to this pressure in constructive ways that illustrate the immense value that pharmaceuticals bring to everyday Americans. The passage of the Inflation Reduction Act in the U.S. shattered management’s complacency regarding the political landscape
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