The pharmaceutical industry is considered to be one of the most stable sectors even when pandemics, economic or geopolitical crises hit markets. However, even the pharmaceutical industry is not immune to the uncertainty in business conditions that 2023 may bring, finds GlobalData, a leading data and analytics company.

A survey* taken from GlobalData’s report, ‘The State of the Biopharmaceutical Industry – 2023’, reveals that a total of 47% of surveyed healthcare industry professionals felt optimistic or very optimistic about the industry’s growth during the next 12 months, down by 34% compared to last year’s results.

Urte Jakimaviciute, Senior Director of Market Research at GlobalData, comments: “Businesses will face turbulent times in 2023, and the pharmaceutical industry is not immune to this. Financial and costs pressures, as well as increasing regulations and an uncertain economic outlook will contribute to decreased levels of optimism in the industry’s growth prospects.”

Interestingly, respondents based in North America and Europe seemed to be more pessimistic compared to their Asia-Pacific counterparts. With inflationary pressures intensifying, economies are expected to shrink faster in upcoming years, especially in developed countries in these two regions.

Some regulatory events such as the introduction of the Inflation Reduction Act (IRA) in the US are also anticipated to bring some turmoil. While IRA is expected to reduce healthcare costs by protecting lower prescription drug prices in Medicare, the impact of IRA on the pharmaceutical industry is still unclear. Previously, Medicare was prohibited from negotiating drug prices with drugmakers, but now, this federal agency will be able to engage in price negotiations for high-cost drugs for the first time.

Jakimaviciute adds: “While celebrated as a ‘historic win’ for patients by patient advocacy groups, the act will bring substantial uncertainty to the pharmaceutical industry, as it may have a huge impact on pharma revenues and investments. For example, companies like Eli Lilly, Alnylam Pharmaceuticals, and Alkermes have named this act when highlighting their decisions to cut back or alter their drug research. AbbVie reportedly left major US pharmaceutical industry lobbying groups for this same reason.”

*198 healthcare industry professionals were surveyed between October 26, 2022, to November 23, 2022.