The global pharmaceutical policy landscape has undergone seismic shifts in the last two years. Post-pandemic budgetary pressures, coupled with the need to generate revenue for other priorities, have compelled policymakers to tighten the financial screws on the industry.
Examples of these headwinds include the Inflation Reduction Act (IRA) in the U.S., Financial Stabilization Act in Germany, doubling of the VPAS ratein the UK, and the proposed update of the EU general pharmaceutical legislation.
The regulatory scrutiny and belt-tightening are here to stay. Moreover, the turbocharged 2024 electoral cycle in key markets promises to add fuel to the fire:
- Brace for more U.S. Congressional hearings, while dealing with the regulators regarding the first tranche of IRA-mandated price negotiations.
- Be prepared for tough negotiations with NHS on rebates, all while the government defendsits health record during the upcoming general elections.
- Expect EU MEPs to make inequitable access to medicines across Europe a campaign issue. Following the parliamentary elections, expectations are they will swiftly finalize the pharmaceutical legislation, albeit with most of the problematic provisions around reduced regulatory data protection intact.
In a world where the appetite to pay for medicines is diminishing, the industry must adopt these three strategies to navigate this challenging environment and secure long-term success.
Quantify and Humanize the Impact on Innovation
While the industry has voiced concerns about the negative impact of these policies, it must communicate simply, straightforwardly, and persuasively. Critics accuse the industry of inflating the impactand engaging in hyperbole. Hence, the message that “price controls will result in fewer medicines for current and future patients” needs to be substantiated and echoed by stakeholders such as patient advocacy groups for it to be impactful.
Rethink and Amplify the Value Proposition
Companies should reconsider how they define their value proposition. Shortening a product’s economic lifecycle will likely exert downward pressure on research and development (R&D), pipeline growth, and competitive positioning. To continue attracting new investment, companies must persuade investors that they are worth backing.
Lean In and Take a Position
The days of relying solely on associations to address policy and regulatory challenges on behalf of industry are gone. Stakeholders, including policy and policy-adjacent audiences, patient advocacy groups, media, and investors, now expect industry leaders to take charge. Being proactive and articulating alternatives that address patient access concerns while promoting innovation is important. Companies that fail to shape their own narrative risk having it defined for them.
