With the advent on new and emerging technologies – both in the pharmaceutical, health and digital fields – companies are called to make an effort to update their business models to include latest advancements while keeping under control the very high costs of pharmaceutical development (especially for innovative medicines). The sentiment of the top managers of the health sector has been captured by the PwC’s 22nd Annual Global CEO Survey, showing in 2019 a marked decrease in the confidence the global economy would be able to resume a positive economic growth (down to 38% from the 67% of the previous year).
A negative outlook has been foreseen by 21% of the CEOs participating to the survey, vs 5% in 2018; worsening of the future economic scenarios is expected by 31% of top managers operating in the pharmaceutical sector, vs 7% just a year before. The 2019 PwC’s CEO Survey has taken into consideration the input from around 1,400 business managers coming from 83 different countries.
The possible dangers for the economic growth
The globe is suffering a period of high political uncertainty which together with an over-regulation of the health sector, would be the main drivers for the negative economic period, according to the survey. The new EU Commission is going to entry into force on 1st November and US president Trump is entering an electoral year that will end in November 2020 with critical elections to determine the renewal of his mandate. Only 55% of the interviewed CEOs said their company may increase the number of their workers (63% the previous year), while a 15% decrease of the workforce in 2019 is expected at the global level (8% in 2018). On this basis, PwC expects over 12,9 million health professionals will be globally missing by 2025.
Increasing health costs are the main reason of concern (81%) while constraints in resources (82%) and the need to pay attention to social determinants potentially impacting on health management (42%) are other causes of worry for CEOs in the pharmaceutical sector.
Business decisions are mainly targeted to safeguard the brand value, the company’s reputation and its financial potential (94%). Not an easy exercise in the first case, as data on which these decisions are based can be considered adequate just in 28% of cases, while this percentage increases to 45% for decisions based on financial data, said the CEOs. Patients’ needs are another important driver (93%) for companies operating in the health sector, even if data are considered adequate in just 17% of cases, followed by the possible risks that might affect the business (91%, with 22% data adequacy). The low perceived quality for the data used for decisions may be explained with the many silos still present, the low propensity towards their sharing, and the lack of analytical capacities suited to manage the very large amount of data available.
The importance to implement AI
Artificial intelligence is expected to exert significant changes on business models by 81% of the CEOs participating to the survey (75% in the pharmaceutical sector), but its full implementation is still far to become a reality. None of the participating pharma companies’ CEOs said to have already implemented AI on the large scale (4% in the overall health sector), and 34% said not to have plans to do it in future (31% on the total). According to PwC, an extensive use of artificial intelligence might contribute $15,7 trillion to the global GDP by 2030, but there is still need to overcome a trust issue affecting this sort of technology. An issue that touches also CEOs, says the survey report, and that requires to clearly explain the true AI potential value to all citizens.