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Pharmaceutical Industry Scenario Planning Project Report

13 December, 2004

Pharma Futures is a scenario planning exercise, designed to permit industry and its investors to assess and successfully act on the long-term risks & opportunities facing the pharmaceutical industry, while responding positively and in an economically viable way to the demand for health as global public good.

The Pharma Futures report, published on December 9th 2004 presents the findings of the Pharma Futures scenario planning project. The report is sponsored by three major pension funds – ABP (Netherlands), the Ohio Public Employees Retirement System (OPERS, US), and the Universities Superannuation Scheme (USS, UK).

The report is freely available at: http://www.pharmafutures.org/

The report finds that fundamental change for the industry is inevitable since “muddling through” on the basis of the current business model will mean increasingly unsuccessful fire-fighting on a growing number of fronts. The report also highlights ways that the sector can manage this change and emerge profitable and successful. Critically, the report shows that these challenges will only be met if both the sector and its institutional investors change their thinking and adapt to the new circumstances.

This unique project brings together major worldwide investors and leading pharma executives and other informed commentators and is a bold analysis of opportunities and threats beyond the next quarter. It finds that investors need to understand that sustainable value creation from the pharmaceutical industry requires a better alignment of health and shareholder needs and that government has a key role to play.

The report outlines how the immense and increasing pressures on the industry – for new drugs, lower cost health care, the significance of emerging markets, the current lack of trust, the need for access to medicines in least developed countries and the difficulties in creating incentives to reward first-mover behaviour – are interacting to create disincentives for adaptive first-mover response and argues that continued and deeper dialogue amongst all stakeholders is critical.