Our business environment
The need for high-quality healthcare has never been more urgent or important. People around the world are living longer, fueling a rise in chronic diseases and pressuring healthcare systems to restrain spending growth. At the same time, digital technology and a deeper understanding of the root causes of disease are accelerating medical innovation and opening new possibilities to improve the lives of patients.
Healthcare demand is expected to rise post-COVID-19
Global demand for healthcare and associated spending is expected to grow over the next five years, supported by renewed economic growth and increased investment in healthcare in many countries after the COVID-19 pandemic. We see growth for our business in many markets, including in the US and – over the longer term – in China. At the same time, pressure on pharmaceutical pricing is expected to continue as payers step up initiatives to reduce the cost of healthcare.
The global medicines market is expected to grow at between 3-6% CAGR through 2025, according to IQVIA, a research firm. Growth in non-COVID-19 spending is expected to return to its pre-pandemic outlook by 2023. In China, spending on medicines is predicted to exceed USD 170 billion by 2025.
Use of data and technology is expanding across our industry
The use of data science and technologies such as artificial intelligence is increasing rapidly across our industry – in everything from clinical trials and manufacturing to patient diagnostics and treatment. COVID-19 has accelerated this trend. Meanwhile, customers want more efficient and personalized ways to connect with pharmaceutical companies. Against this backdrop, data privacy and cybersecurity are growing in importance.
According to a 2021 survey by Deloitte, nearly two-thirds of doctors, nurses and other healthcare professionals in the EU have increased their use of digital technology to support clinicians’ new ways of working.
Innovation continues to accelerate
Medical innovation is accelerating, as technologies such as gene therapy and ribonucleic acid (RNA) therapies open new paths to scientific discovery. Increased cooperation within the industry could lead to a new era of open science. At the same time, innovation is getting harder, with new discoveries requiring significant longterm investment.
In 2020, spending on research and development by the world’s 15 leading pharmaceutical companies reached USD 123 billion, an increase of 43% since 2015, according to research published in 2021 by IQVIA.
Access to healthcare remains a global challenge
Almost a third of the world’s population does not have access to the medicines they need. For the past five years, access rates in the poorest countries have been declining. Meanwhile, the COVID-19 pandemic has highlighted deep health inequities in both developed and developing countries.
The number of people who lack access to essential medicines, according to the World Health Organization (WHO).
Aging and other factors are changing the disease burden
As the complexity of the world’s healthcare challenges grows, the nature of the global disease burden is also changing. Aging populations and lifestyle changes are fueling a rise in noncommunicable conditions such as cardiovascular disease and cancer, driving an increase in disability and early death, and putting additional pressure on healthcare systems.
Noncommunicable diseases (NCDs) are responsible for 71% of global deaths, according to the WHO. Cardiovascular diseases account for most NCD deaths, followed by cancer, respiratory diseases, and diabetes.
New ways of working are here to stay after COVID-19
COVID-19 changed our work habits. Post-pandemic, many employees continue to want more flexibility in how they work. Within our own workforce, there is more emphasis on digital skills. At the same time, workplace diversity is more important than ever to attract and retain talented employees, and support innovation.
Nearly three-quarters of workers want a mix of office-based and remote working, according to a 2021 survey by Accenture. Research also shows more flexible working can bring cost benefits for employers and can help companies widen their talent pool.
Climate crisis threatens to undermine global health gains
Climate change is already causing extreme heat and poor air quality in some areas, which threaten to exacerbate pre-existing health conditions such as respiratory diseases. In addition, an increase in temperature and humidity may cause a proliferation of insects that carry vector-borne diseases, including dengue fever and malaria. Ultimately, climate change could undermine decades of progress in improving human health at a time when antimicrobial resistance is also rising.
Between 2030 and 2050, the WHO expects climate change will cause approximately 250 000 additional deaths each year – from malnutrition, malaria, diarrhea and heat stress alone.
Opportunity to build public trust in the wake of the pandemic
COVID-19 has brought an opportunity to reset public trust in our industry, with companies working together to end the pandemic. Trust matters for our industry: Our success depends on patents and trademarks that are granted by society and protect the long-term investments required for our business. Trust also matters for patient engagement, for working with regulators and policymakers, and for attracting talented employees.
Worldwide, trust in pharmaceutical companies stood at 57% in 2021, according to the Edelman Trust Barometer. Trust improved in the US, Germany, the UK and Italy, from 2020, though from relatively low levels.