Navigation Links
Creative Alliances with Nontraditional Players Increasingly Essential for Survival in Pharmaceutical Industry, New Ernst & Young Report Finds

NEW YORK, Feb. 11 /PRNewswire/ -- Information technology (IT) companies, large retailers, and telecommunication firms are strategically poised to capitalize on rapid changes taking place in health care, and pharmaceutical companies are increasingly looking for innovative ways to collaborate with these new players to reach and improve outcomes for patients. Despite near universal agreement among pharmaceutical industry executives that these nontraditional companies will help reshape the healthcare marketplace, most feel unprepared to address the challenges these new creative alliances will bring. These findings and other insights were released today in Progressions, Pharma 3.0  Ernst & Young's annual global pharmaceutical report.

The Progressions report identifies several industry trends driving nontraditional companies into the sector, including health reform, health IT, comparative effectiveness, and the rising confidence in consumer power. These factors and others are prompting pharmaceutical companies to broaden their focus from producing new medicines to delivering "healthy outcomes" – a shift that will be driven through creative partnerships and business model innovation.

"Despite the tumultuous changes over the last few years, executives realize the road ahead will become even more complex with the entry of new players which are being lured to the sector in increasing numbers," remarked Carolyn Buck Luce, Ernst & Young LLP, Global Pharmaceutical Leader. "In this environment, successful companies will find new ways to combine their unique assets and attributes with those of partners through dynamic collaborations focused squarely on patient outcomes and the consumer experience."

The Progressions report describes the rapid transition from the industry's long-standing vertically integrated blockbuster-driven model, defined in the study as Pharma 1.0, to today's Pharma 2.0 business model. Under this business model, companies have adopted a number of changes to improve productivity and financial performance, from pursuing more targeted therapies, broadening their portfolio of products and capabilities, to establishing more independent and flexible R&D units, to boosting partnerships with biotech firms, and universities and outsourcing many non-core functions.

The report finds that even as pharmaceutical companies continue to implement strategies to prosper in Pharma 2.0, these efforts may be overtaken by a Pharma 3.0 "ecosystem" comprised of established industry members, nontraditional companies and an increasingly informed data- empowered consumer.

The entrance of many non-traditional players in Pharma 3.0 will heighten the need for further business model innovation by traditional pharmaceutical companies, making development of innovative new commercial models a critical counterpart to the development of innovative new medicines. Managing and optimizing an increasingly complex network of partners will pose new tests for industry leaders, whose success will come increasingly from adapting their company's unique assets and attributes to fit someone another company's business model. Early industry attempts to adapt to the Pharma 3.0 environment highlight some of the challenges ahead, according to the report. For example:

- As patients play an increasingly active role in managing their health care enabled by personal health records, smart phone applications, and other technologies, pharmaceutical companies remain largely on the sidelines of this revolution, hampered by a regulatory framework governing patient interactions which has been slow to evolve.

- As leading hospitals and payers mine electronic health records for correlations between prescribing patterns and patient outcomes, pharmaceutical companies have lost the exclusive control they once had over outcomes data, posing reimbursement risks and forcing strategic decisions to be made about whether to build new proficiencies in data analysis.

- As pharmaceutical companies expand into emerging markets, they are increasingly considering alliances with non-traditional partners – from micro-lenders who could bridge the affordability gap to food companies with existing distribution and infrastructure networks to help manage supply chains. The unprecedented nature of these new partnerships pose new challenges in determining how deals are structured and how each partner's contribution is valued.

Business development leaders see challenges ahead in Pharma 3.0 deal execution

As part of Progressions, Ernst & Young surveyed key business-development executives from 24 unique companies, including 11 of the 15 largest global pharmaceutical companies and members of new industries expected to enter the Pharma 3.0 ecosystem. Survey responses underscored the challenges ahead. Among the key findings:

  • 92% of respondents believe new entrants will enter the Pharma 3.0 ecosystem, with e-health, mobile-health and new medical technology firms being the most likely new entrants
  • 67% of respondents said they are not well prepared for valuation and modeling potential deals with nontraditional partners
  • 75% of respondents believe that corporate and deal strategy, offer and market positioning, and due diligence will all be more challenging in Pharma 3.0 alliances
  • 50% of respondents expect  deals will become more challenging in Pharma 3.0, while only 2% expect that they will become less challenging

"While this has always been an innovation-driven industry, the winners in Pharma 3.0 will approach innovation in new ways," said Patrick Flochel, Ernst & Young EMEIA Life Sciences Leader. "Innovation is no longer just about the product — it now encompasses how you do business, who you do business with and how you mobilize your resources to contribute to healthy outcomes for patients."

About Ernst & Young's Global Life Sciences Center

Ernst & Young's Global Life Sciences Center brings together a worldwide team of professionals to help life sciences companies address their challenges at every stage of development. From the emerging biotech or medtech firm to the well-established, global pharmaceutical company, our industry teams bring deep experience in providing assurance, tax, transaction and advisory services. The Center works to anticipate market trends, identify implications and develop points of view on relevant industry issues. Whether it's forming innovative alliances, improving operations, new regulations or exploring new markets, we can give you a clear perspective on how to drive value in an increasingly complex, competitive and risk-driven environment. It's how Ernst & Young makes a difference.

For more information, please visit or email

About Ernst & Young

Ernst & Young is a global leader in assurance, tax, transaction and advisory services. Worldwide, our 144,000 people are united by our shared values and an unwavering commitment to quality. We make a difference by helping our people, our clients and our wider communities achieve their potential.  For more information, please visit

Ernst & Young refers to the global organization of member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients.

The Ernst & Young organization is divided into five geographic areas and firms may be members of the following entities: Ernst & Young Americas LLC, Ernst & Young EMEIA Limited, Ernst & Young Far East Area Limited and Ernst & Young Oceania Limited. These entities do not provide services to clients.

This news release has been issued by EYGM Limited, a member of the global Ernst & Young organization that also does not provide any services to clients.

SOURCE Ernst & Young LLP

SOURCE Ernst & Young LLP
Copyright©2010 PR Newswire.
All rights reserved

Related medicine technology :

1. Younger Adults Increasingly Treated for Heart Disease-related Conditions
2. Nationwide Survey Reports that Mothers View Cleaning Homes and Toys as Essential to Preventing Colds & Flu
3. Precise Low-Dose Drug Monitoring Essential for Long-Term Kidney Transplant Success
4. Essentialis Completes Patient Enrollment in Phase 2 Trial of DDCR for Treatment of Dyslipidemia
5. Essentialis Meets Primary Endpoint in Phase 2b Trial of DCCR for Treatment of Hypertriglyceridemia and is Granted Extensive Patent Coverage in the US
6. Essentialis to Submit SPA for Hypertriglyceridemia
7. Weekly Digests Investor Essentials Special Report Identifies Unique Investing Opportunities in the H1N1 Swine Flu Outbreak
8. Vidaza Significantly Extends Overall Survival by 74% in Phase 3 Trial in Myelodysplastic Syndromes (MDS)
9. Nexavar Significantly Improved Overall Survival in Phase 3 Asia-Pacific Liver Cancer Trial
10. Poniard Pharmaceuticals Announces Updated Results of Picoplatin Phase 2 Trial Demonstrating Survival Benefit in Small Cell Lung Cancer Patients
11. ERBITUX(R) Meets Primary Endpoint of Increasing Survival in Phase III Lung Cancer Study
Post Your Comments:
(Date:11/29/2015)... Iowa , Nov. 29, 2015 ... ultrasound guidance technology at the Radiological Society of ... in Chicago November 29 ... system is designed to offer customers unrivaled versatility, ... --> ...
(Date:11/27/2015)... YORK , November 27, 2015 ... system is set to go online. The potential to ... processes is vast and far from fully exploited as ... to patient health records, either via mobile tablet or ... ) --> ) --> ...
(Date:11/27/2015)... Research and Markets ( ) has ... Market 2015-2019" report to their offering. ... report, the author the present scenario and growth prospects ... calculate the market size, the report considers revenue generated ... IUDs and copper IUDs. The report forecasts the global ...
Breaking Medicine Technology:
(Date:11/29/2015)... ... November 30, 2015 , ... ... new company, Sublime Beauty NATURALS®. All products are available on Amazon or its ... oils, organic facial serums and USDA Certified Organic Sesame Oil for Oil Pulling," ...
(Date:11/29/2015)... Orion, Clarkston, Metamora, Michigan (PRWEB) , ... November 29, 2015 , ... ... football games, basketball games. Things that as a Mother and Wife would love to ... was no mistake that I just happened to call Dr. Zaidan first. They have ...
(Date:11/29/2015)... ... November 29, 2015 , ... NewsWatch featured X-wing as ... available to consumers. Amanda Forstrom, a technology expert and special reporter for NewsWatch, conducted ... reality in the future. , It’s the future because flying cars are about to ...
(Date:11/29/2015)... ... ... While conventional walkers afford considerable help with mobility, their design does not ... inventor from Uniontown, Pa., has found a way to address those needs. , He ... walker to improve the user’s quality of life. To begin with, this improved mobility ...
(Date:11/29/2015)... Viejo, CA (PRWEB) , ... November 29, 2015 ... ... an all new and unique analog distortion effect tool designed specially for Final ... their footage, and create limiltess looks with the easy-to-use modification controls. Destoying and ...
Breaking Medicine News(10 mins):