In 2024, GlobalData expects inflation, geopolitical conflicts, and drug price decreases to affect the pharmaceutical industry. Drug pricing and reimbursement limits are the most negative developments, with most rating them -5. Inflation limits revenue growth and raises production costs, whereas sharp monetary policy tightening might cause recession or slow global growth.
GlobalData predicts that the pharmaceutical business will face persistent inflation, geopolitical tensions, and pressure to lower medicine prices in 2024.
The GlobalData poll ‘The State of the Biopharmaceutical Industry 2024’ reported that n=50 respondents rated drug pricing and reimbursement restrictions as 5, 4, -4, or -5. Most respondents saw the trend as bad in 2024. Geopolitical disputes and inflation followed, both generating further negative feeling.
GlobalData Senior Director, Market Research Urte Jakimaviciute said, “Even though inflationary pressures are retreating, other shocks may come, especially with global tensions mounting. Geopolitical tensions and conflicts increase economic instability because deteriorating relationships can lead to diminished cooperation, IPO market disruptions, and economic sanctions.
The pharmaceutical business will struggle with drug pricing. It was the top hindrance to industry growth when healthcare professionals rated the most negative regulatory and macroeconomic issues for 2019, 2020, 2021, and 2022. It dropped to second last year when inflation became the most negative industry trend for 2023.
Jakimaviciute stated, “While pricing control can make healthcare more affordable, it limits pharmaceutical revenue growth. In most large markets, drug prices are controlled, so they cannot rise as fast as inflation. Due to suppliers boosting costs and staff expecting pay raises, drug production costs may climb considerably above inflation, limiting pharma revenue growth.
Inflation peaked in 2022 in most areas and is slowly declining, but individuals and businesses are still feeling the burden of rising prices. Sharp monetary policy tightening in most markets can cause recession or slow global development.”
Conclusion
GlobalData anticipates inflation, geopolitical conflicts, and prescription price cuts for the pharmaceutical business in 2024. Pharmaceutical pricing and reimbursement limits are the biggest issues, with respondents rating them -5, -4, or -5. Geopolitical crises and inflation will also hurt. IPO market disruptions, economic sanctions, and less collaboration may occur despite falling inflationary pressures. Drug cost is the industry’s biggest issue, with inflation the worst in 2023. Inflation peaked in 2022 but continues above 2%, and strong monetary policy tightening might cause recession or slow global development.
