Capgemini Analysis |
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PLM Matters More Than Ever

By Ian Brodie, Executive Consultant, and Michelle Palmer, Managing Consultant
Capgemini
Pharmaceutical companies are missing vital opportunities to maximize their products' lifetime value.
Capgemini Life Sciences' latest global research report, 'Increasing the Lifetime Value of Pharmaceutical Products,' developed in collaboration with the Economist Intelligence Unit, reveals that for many executives, the effective lifecycle management of drugs is the most important priority for the pharmaceutical industry today. The report's findings are based on responses from more than 8,000 payers, physicians, pharmaceutical executives and industry leaders worldwide.
The report stresses the need for a more integrated approach to product lifecycle management (PLM) - one that not only enables pharma companies to make the most of their existing products, but which also helps the industry identify and nurture the products that will drive growth well into the future.
Given pharmaceutical companies' success in bringing blockbuster products to the market, up to now investment in lifecycle management has not been a priority. But with financial and pipeline pressure increasing, the research uncovers an emerging belief amongst pharmaceutical executives that lifecycle management must become a core capability for the future.
By 2007, $40 billion in U.S. sales will be lost at the top 10 pharma companies as a result of the slowdown in R&D innovation and the expiry of patents on major products. Analysts believe that market erosion to generics could cost at least two of these companies more than 20 percent of 2003 sales within the next five years. Taking a broader look across the industry, no fewer than 19 blockbuster drugs are expected to hit patent crisis by 2008. Capgemini analysis suggests that 150 mid-sized new compounds will be needed by 2007-2008 in the U.S. alone to plug this gap. Unsurprisingly, analysts are predicting less than 8 percent growth by 2007, with some predicting rates as low as 4 percent.
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