Overview of the Pharmaceutical industry

The pharmaceutical industry is a rapidly changing global environment, undergoing a massive transition from merely treating diseases to preventing and managing them. Nevertheless, this market continues to discover, develop, and market pharmaceutical drugs to improve the quality of life for patients.

Many experts describe pharmaceutical innovation as having flatlined for nearly a decade. Mostly because the US government has felt the intense financial pressure, leaving little room for developmental momentum. However, sales have continued to climb. But, it only makes sense that this industry is facing challenges adjusting to the new shift in society’s approach to healthcare.

What’s more; is that consumers demand value and measure it according to cost-effectiveness and positive outcomes—a different mindset from days past. Still, with data-driven scientific discovery and medicine, the pharmaceutical industry is geared to navigate the ongoing changes.

Some of the biggest risks Pharmaceutical companies face

As the healthcare landscape undergoes a massive transition, pharmaceutical companies face new challenges, including:

Advocacy Groups

Patient advocacy groups influence governments and regulators heavily. These organizations lobby for officials to address inequalities for medical care of rare diseases. Naturally, this creates challenges for pharmaceutical companies, forcing them to take competitive risks to develop medicine for these specific diseases. All the while, chronic diseases are monopolizing much of the healthcare budget.

Patent Protection

As time passes, specifically by the year 2021, many medical patents will be expiring. This milestone puts up to $148B of pharmaceutical sales at risk. What this could mean is a grinding halt on the industry’s upward trajectory—or even a second patent cliff.

Tax Reforms

Pharmaceutical company mergers and acquisitions (M&A) have taken a step back because of recent tax reforms—specifically, the Affordable Care Act (ACA). Many pharmaceutical companies have mounds of cash invested overseas in research and development (R&D) programs. To move forward on any US-related M&A could subject that money to heavy taxation, which might cause more loss than gain in the end. 

Why is Insurance for Pharmaceutical Companies Important?

Although the pharmaceutical industry faces enormous challenges today, these forces are the same ones that will offer opportunities in the near future. This market is cutting through the fog of multiple vulnerabilities armed with a robust scientific base and insight into genetics and genomics.

With rising regulatory requirements and severe tax reform influencing the market’s momentum, pharmaceutical companies must protect their assets. Insurance for pharmaceutical companies is what will ensure that patients’ needs are met continually, and companies stay afloat, in general. 

Furthermore, pharmaceutical R&D is expected to grow by 2.4% in the next couple of years. Adequate insurance coverage will help support R&D as well as product sales, extending the life of the company overall. 

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What Insurance do Pharmaceutical companies need?

How much does Insurance for Pharmaceutical Companies cost?

The cost of insurance for Pharmaceutical companies will depend on several things, including the size of the company and the stage of the company in its development process. Other factors include:

  • Exposures: risks being insured.
  • Company practices: views on safety, compliance, and risk management. 
  • Program structure: the amount of deductible and willingness for a company to assume more risk
  • Claims history: the type and amount of past claims against the company

Types of Pharmaceutical Companies that need Insurance

A variety of companies operate in the pharmaceutical industry. While each type has its distinct business model, these companies share similar risks in this market. Here are a handful of companies in this space that benefit from having insurance:

  • Research and development companies
  • Manufacturers
  • Distributors
  • Biological products companies
  • Mainline brand developers (i.e., Pfitzer, Merck, Novartis, etc.)
  • Generic competition companies

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