Life sciences industry accelerates growth through volume and efficiency

"With the decline in inflation, the optimism in the life sciences sector, which has never really been lost, is also receiving a new boost"

08-May-2024

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The top management of Life Sciences companies is very optimistic about 2024 and 2025. Over 80% of managers from the pharmaceutical, medical technology and biotechnology sectors expect profit growth for the current year, and even over 90% for the coming year. Around one in two companies expect profits to rise by more than five percent this year and 70 percent next year. These are the findings of the annual "Life Sciences Executives Flash Report" study by management consultants Horváth.

The reason for the positive mood is that executives firmly believe that volume growth (over 75%), new product launches (over 80%) and cost efficiency measures will have an impact. In particular, they are focusing on a leaner administrative structure. Almost 50% of respondents see this as an opportunity to increase profits. Another popular measure is the renegotiation of supplier contracts. Around 40 percent see an opportunity here. Further efficiency potential lies in the widespread energy-saving programs. Almost 60 percent of those surveyed are already implementing these; a further 25 percent have already adopted corresponding measures.

"With the decline in inflation, the optimism in the life sciences sector, which has never really been lost, is also receiving a new boost," says Dr. Philipp Temmel, Partner and Head of Life Sciences at Horváth. "The current focus is on growth and expanding the product portfolio as well as reducing administrative and material costs. However, companies should not ignore collaborations and partnerships. They offer great potential, especially in the technology sector."

Increasing regulation, digitalization and cost-cutting measures

Managers currently see regulation as the biggest challenge for their companies. 90 percent expect the authorities to intervene more in the market. This is 25 percentage points more than in the previous year. "Companies have to place a further focus on market access, pricing and effectively addressing the market - both organizationally and in their approach to doctors and patients," says Oliver Freese, co-author of the study. Another 80 percent believe that the introduction of digital innovations will revolutionize the market and business models. In addition, a similar number of respondents expect a strong impact from reduced healthcare budgets due to public austerity measures. Two out of three companies are preparing for further challenges in their global supply chains.

The study also shows which priorities executives have set themselves for 2024. The top priorities are promoting employee engagement and new work models. This is followed by cyber security and improving cost and profit structures. Digital transformation also plays an important role, ranking fourth on the list of priorities.

"Generative artificial intelligence is a game changer for the entire value chain of the life sciences industry," says Marco Maisenbacher, co-author of the study. "For example, AI offers great potential for accelerating research and development or commercialization. Those who seize these opportunities early on can gain a significant competitive advantage."

About the study

For the "Life Sciences Executives Flash Report" study, Horváth surveyed executives from around the world who work in companies in the life sciences industry. The survey was conducted in the first quarter of 2024.

Note: This article has been translated using a computer system without human intervention. LUMITOS offers these automatic translations to present a wider range of current news. Since this article has been translated with automatic translation, it is possible that it contains errors in vocabulary, syntax or grammar. The original article in German can be found here.

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