The key challenge for life science companies today, according to the IBM study, Fade or Flourish? Rethinking the Role of Life Sciences Companies in the Healthcare Ecosystem, is to move away from their current “silo thinking” toward a “systems thinking” approach. The study identifies three main challenges facing life sciences companies today: blockbuster drugs coming off patent, sales diminishing due to restricted physician access, and increased price pressures from payers.

According to the study, industry spending on biopharmaceutical research and development more than doubled in North America between 2000 and 2010, however, there has been no corresponding increase in the number of new therapies reaching the market. Within the next four years, an estimated US$250 billion in sales are at risk as the patents for 31 treatments will expire. In 2010, nine products worth US$20.5 billion a year came off patent.

The biotech sector also faces a challenge. In a recent analysis of 6,000 biotech projects available for late-stage licensing, less than 100 candidates showed the potential to become best-sellers. And the total revenues they were estimated to produce were only about $30 billion.

The study suggests life sciences companies rethink how they engage with the community, health care provider organizations, government and private payers to develop an infrastructure that serves them better. R&D teams need to find ways to collaborate and work more closely with the payer and provider community. Companies will have to work together to find solutions to problems.

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