MARKET SEGMENT REPORT Life Sciences and Pharma€¦ · healthcare expenses - Rapid introduction of...

Life Sciences and PharmaM A R K E T S E G M E N T R E P O R T

I N D U S T R Y O V E R V I E W

The Life Sciences and Pharma industry is a quickly transforming sector with the advances in biotechnology, robots and innovative R&D methods. Shifting economies, mergers and acquisitions and regulatory parameters have also proven to sway the industry in many ways throughout recent years and are expected to enact even more change in years to come.

Key industry figures such as annual revenue, growth rate, employment and associated costs are included in this report to present a holistic understanding of the industry’s current state. We will also take a deeper look at the Life Sciences and pharmaceutical industry at the

regional level selecting various countries that are seeing major change in the market. Brazil, China and India are seeing surges in occupancy by pharma counties looking to expand operations into new and promising markets.

In this report we look at the major change drivers in the Life Science and Pharmaceutical industry and how jobs and talent are being effected as a result. As more processes and tasks are being automated by robots, AI and machine learning, the role that human workers play is changing. New jobs and responsibilities are being created by the human workforce –focusing more on cognitive thinking that

machines are not capable of (yet). There is also a renewed focus on soft skills of the future that will be just as, if not more, important than technical skills required for positions.

Finally, we discuss the current challenges and risks the industry faces from high talent attrition rates to talent shortages and regulatory scrutiny to skills gaps in highly specialized fields. Through both short term and long term solutions like attracting talent through employer brands and upskilling workers, we have created a guide to face these challenges and seek opportunities for growth for our clients and partners.

M A R K E T S E G M E N T R E P O R T

Life Sciences and Pharma

I N D U S T R Y O U T L O O K B Y R E G I O N



Total Revenue in 2019$1,260 trillion

Number of Businesses16,352

Annual Growth 2014-20191.6%

Industry Employment3,032,417

I N D U S T R Y F A S T F A C T S

Cost to Develop a New Drug$2.6 billion

Number of New Drugs Currently in Development 7000+



The pharma industries of the top ten countries are worth $858 billion – these top 10 counties make up 78% of the global industry

Global market for pharmaceuticals reached record high of just over $1 trillion in 2018, up $100 billion from 2017

More than 50% of global industry respondents believe that drug pricing and reimbursement constraints will have the greatest negative impact on the pharmaceutical sector in 2019 –study by GlobalData Pharma

Global Pharma Industry was valued at $1.11 trillion in 2018By 2020, this is projected to reach $1.43 trillion

United States47%

Japan13%

China12%

Germany6%

France5%

Brazil4%

Italy4% UK

3%

Canada3%

Spain3%

Pharmaceutical Markets Value By Country

M A R K E T S N A P S H O T O F L I F E S C I E N C E S a n d P H A R M A



I N D U S T R Y T R E N D S I N L I F E S C I E N C E S A N D P H A R M A



C H A N G E D R I V E R S I N P H A R M A

Biopharma continues to see venture capital investment

In 2018, biotech startups globally raised just shy of $29 billion in seed

Prescription drug market is growing at 6.5 % annually

Forecasts show the Rx market will reach $1.06 trillion by 2022

R&D will take place in more incubator labs

Early-stage Life Sciences companies are developing drugs in incubators to reduce costly overhead

Incubators, much like co-working spaces, provide turnkey laboratory settings and a collaborative atmosphere

M&A continues to surge

In the first 6 months of 2018, there were 212 mergers and acquisition in the sector worth more than $200 billion. That was 61 more than the same time period in 2017.

M&As drivers include:Realignment – refresh portfolios, seek tax benefit and diversify ahead of patent expirations

Innovation – larger companies provide funding for smaller, often more creative, companies



R E G I O N A L O U T L O O K O F L I F E S C I E N C E S A N D P H A R M A



T H E A M E R I C A S

United Statesholds over 45% of the global pharmaceutical market. The US has always been a pioneer and a booster for the global pharmaceutical industry with over $60 billion annual spend on R&D alone.

The downside for consumers is that pharmaceutical costs are now the fastest-growing component of all healthcare costs –increasing at the rate of about 15% year-over-year.

Latin AmericaCompound annual growth rate (CAGR) for the Latin America Pharmaceutical market between 2018 and 2024 is projected to be 9.3%.

Similarly, the over-the-counter pharmaceuticals market in Latin America is also showing strong growth, with a projected CAGR of 8.64% between 2016 and 2022.

Brazilis one of the biggest pharmaceutical markets in Latin America. Brazil’s pharmaceutical business is now sixth in the world and is projected to be in the top 5 by 2021.

Brazil’s pharma market has grown larger than the UK, Italy, Canada and Spain and is expected to exceed that in France before long.Many companies see Brazil as a promising pharmaceutical market and have begun plans for substantial expansion in the country.



E U R O P E

The manufacturing and production of pharmaceuticals in Europe reached €260 billion by 2018, up from €127 billion on 2000.

Europe accounted for 22.2% of global pharma sales compared to 48.1% of sales carried out in North America (includes both the US and Canada).

As of 2018, 765,000 individuals were employed in the pharmaceutical industry across Europe. That is 100,000 more people employed in the industry since 2010.

Switzerland represented the majority of production output with 18% or € 45 billion as of 2017. Much of this is influenced by Novartis, Roche and Lonza which are all headquartered in Switzerland.

Pharmaceutical production in other regional countries have reached all time highs: Italy €31 billionGermany €30 billionFrance €21 billion

Europe is now faced with new competition from emerging economies such as Brazil and China. Rapid growth occurring in these markets resulting from investment in R&D and promising economic factors has caused strain on the European pharmaceutical market.



A S I A P A C I F I C

China is now ranked as the second largest pharmaceutical market globally with $137 billion in total spending in 2018. This growth has been attributed to these factors: - Regulatory reforms at the

government level- Greater access to insurance

in both urban and rural areas- Modernization of hospitals

and primary care services

Top 5 Chinese Pharma companies ranked by revenue (2018):1. Sinophram Group

2. Shanghai Pharmaceuticals3. Jiangsu Hengrui4. Guangzhou Baiyunshan5. China Mehecco

Other Asian countries that will see strong growth in Pharmaceutical markets: VietnamSri Lanka MyanmarBangladesh

India is the largest provider of generic drugs globally supplying over 50% of global demand for various vaccines, 40% of generic demand in the US and 25% of all medicine in UK.

In 2017, the pharma industry in India was valued at $33 billion with expectations rising it is $55 billion by the end of 2020.

Government enablement within the industry includes: - Reduction of costs to

healthcare expenses- Rapid introduction of

generic drugs into the market

- Focus on rural health programs, lifesaving drugs and preventive vaccines

The Australian pharmaceutical market is projected to surpass $25 Billion by 2020

The country sees significant investment from both domestic and foreign entities which to boost economic growth, develop competition, create jobs and increase exports



J O B S A N D T A L E N T I N L I F E S C I E N C E S A N D P H A R M A



Physical and digital labor will be integrated to work together

Using robots to perform routine tasks will allow more work to become automated

Robots will not replacing humans but instead will allow humans to perform more meaningful tasks

Highly specialized talent

Greater need for specialist skills as lower roles become automated

Workforces require a blend of internal and external talent

The gig economy will become a substantial part of the workforce ecosystem

Gig workers are expected to make up 43% of the workforce by 2020 and 50% by 2025

Freelancers or gig worker provide pharma companies with an agile and skilled workforce

Shift of job roles and associated tasks

Monotonous, systematic tasks be automated however new roles will be created that require higher level human thinking

F U T U R E O F J O B S A N D T A L E N T I N P H A R M A



Emerging occupations• Data Analysts and Scientists

• Biologists and Geneticists

• AI and Machine Learning Specialists

• Information Technology Services

• Environmental and Occupational Health and Hygiene

• Big Data Specialists Diminishing Occupations• Data Entry Clerks

• Assembly and Factory Workers

• Sales Reps, Wholesale and Manufacturing, Technical and Scientific Products

• Client Information and Customer Service Workers

G L O B A L H E A L T H a n d H E A L T H C A R E

Global Health and Healthcare



Emerging Occupations• General and Operations Managers

• AI and Machine Learning Specialists

• Sales and Marketing Professionals

• Organizational Development Specialists

• Mechanical Engineers

• Data Analysts and Scientists

• Research and Development Officers

• Innovation Professionals

C H E M I S T R Y , A D V A N C E D M A T E R I A L S a n d B I O T E C H N O L O G Y

Future of jobs

Diminishing Occupations• Data Entry Clerks

• Assembly and Factory Workers

• Accounting, Bookkeeping and Payroll Clerks

• Sales and Purchasing Agents and Brokers



F U T U R E S K I L L S F O R T H E I N D U S T R Y

Soft SkillsCognitive and behavioral sills are becoming just as important to hiring managers and organizations as the technical background and experience of a candidate

Technical SkillsAs technology and processes evolved to become more efficient and incorporate new ways of getting work done, the workforce will need to evolve their technical skills to be a valued asset within their organization.

• Complex Problem Solving• Judgment and Decision Making• Interpretation and Communication Skills• Creativity• Adaptability

• Digital Literacy• Regulatory and Government Relations• Artificial Intelligence and Machine Learning• 3D Bio-Printing• Internet of Medical Things (IoMT)



R I S K S A N D C H A L L E N G E S



C U R R E N T C H A L L E N G E S I N L I F E S C I E N C E S

Solution

Trend

Specialized Engineering Fields

New technologies including automation, miniaturization of medical devices, process integration and bioinformatics are on the rise

In 10–15 years we will less wet lab research and see it replaced by much more computer modeling and in silico chemical design for drug research

High Turnover

Pharmaceutical and biotechnology industry experienced an 18% turnover rate on average in 2018 while Contracted Research Organizations reached 25%turnover

This level of turnover can be incredibly damaging for an organization impacting key factors like project timelines and project

Attract Talent through Investment in R&D

Overall R&D spending is expected to grow by 3% each year, reaching roughly $203.9 USD billion by 2024. The fruits of this capital-intensive process are visible in terms of an increasing number of new FDA approvals

New Regulatory Guidelines

Pharma companies will need to continue to add compliance professionals to their organizations that specialize in global

regulations, GMP experience, quality management, global health economics, drug pricing and reimbursement

Continued investment in R&D will attract top talent. Significant investments are needed to support the pharma workforces’ effort and ultimately produce best output of new and redesigned products to bring to market

Regular compliance training of existing talent and actively recruiting compliance experts will be critical for companies to maintain a compliant and progressive workforce

The pharma workforce will need significant up-skilling and re-skilling to be ready to work with future technologies so they can continue to innovate and remain competitive

Organizations must have employee retention programs and strong employee value propositions to retain top talent and achieve project success



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T O O L K I T T O G U I D E C O N V E R S A T I O N S W I T H C L I E N T S



How to Close the Skills Gap

S K I L L S G A P

Growing the skills of the existing workforce

Offer external training courses to employees

through General Assembly

Inter-departmentshadowing of colleagues to

develop additional skills

Learning and development

courses to develop skills of existing

workforce

By 2022, no less than 54% of all employees will require significant re- and upskilling.” – WeForum



T A L E N T S H O R T A G E

Managing the workload with fewer traditional workers

58% of companies said they use gig workers to access skills and experience that is not available in their current

workforce – Forbes

How to Win the War for Talent

Access to large pools of

freelancers candidates for project-based

work

Re-skill existing workforce with

General Assembly courses

Partner with Lee Hecht Harrison to

restructure the current workforce to best utilize the

employees



C O M P E T I N G F O R T A L E N T

Attracting talent in a limited market

Prospective candidates want to join companies that offer opportunities for growth and outlets for creativity

Organizations must set themselves apart from the pack to attract top tier talent

Fostersinnovation

among your workforce

Provides learning opportunities for

skillsdevelopment with General

Assembly

Offers competitive

pay, benefits, bonuses,

incentives

Offers flexible work

arrangements

Win talent with a strong employer brandPromote a workplace that:



Ways to prepare for the Gig Economy

Gig workers provide pharma companies with an agile and skilled workforce – KMPG

Freelancers will make up

Of the workforce by 202550%

Evaluate what part of the business can be outsourced to freelancer

– project work, seasonal influxes

Tap into the freelancer talent pool by implementing an FMS tool l

W O R K F O R C E 2.0 F R E E L A N C E R S

New composition of the workforce



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A D D R E S S I N G T R E N D S a n d C H A L L E N G E S

W I T H P O N T O O N ' S E C O S Y S T E M



Building the talent pool by up -skilling and re-skilling

Pontoon’s partnership with General Assembly faces this issue head on. GA aims to identify skills that are most in demand then provide training to increase the number of skilled workers in a given market

Today’s talent shortage is being felt across the global and across all industries. Life Sciences and Pharma and manufacturing are seeing the effects of advances in technology in many skillsets and not enough talent to keep up with the changes landscape of this field.

Employees can enroll in programs while working in their current role with plans to transition into the new roles or expand responsibilities once the GA programs have been completed

We must focus on developing the skills within the current workforce as the world of work rapidly transforms

Transforming the workforce

Lee Hecht Harrison has the expertise to guide organizations through strategic workforce transformation. With AI driven services including internal talent redeploy, outplacement and change management program, LHH will guide companies to be most effective in the current tight labor market

LHH has the capability to identify talented candidates through their powerful AI platform reaching of all levels and industries. Retaining and engaging talent is done through career development and coaching of both employees and leadership.

Employers can leverage Lee Hecht Harrison’s industry insight to optimize their workforcedeveloping leaders be a consultative partner best suit business needs.

“The alignment between organizational talent needs and an individual's career goals can be a potent force that not only prepares your organization to meet the challenge of business transformation, but also boosts engagement, retention and productivity.”

Melanie Stave SVP, Talent Development Practice Leader, LHH

T H A N K Y O U

+1 855.881.1533

[email protected]

www.pontoonsolutions.com

@pontoon2019



MARKET SEGMENT REPORT Life Sciences and Pharma€¦ · healthcare expenses - Rapid introduction of...

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