Volatility of Pharma and Biopharma in 2017

The beginning of a new year usually implies a fresh, optimistic start, but it would appear that things are still not looking good for pharmaceutical companies in 2017.

The life sciences sector has seen some rough times in 2016 already—Donald Trump’s criticisms of the pharmaceutical industry alone raised more than one issue and certainly caused a panic—but changes to the political climate is not the only thing affecting the affairs of pharmaceutical companies. Aside from the threat of the stricter policing of drug pricing and uncertainty regarding the future of health insurance, there were also problems coming out of regulatory changes, issues in R&D, patent losses and roadblocks preventing pharmaceutical companies from finding stable footing in overseas stock markets and technological investments after an event like Brexit. And the very notion that price negotiations can happen is already a blow to the pre-existing structure that pharmaceutical companies have comfortably began to expect from their biggest consumers—any changes demanded of these companies will most likely be changes they will have to agree to.

As of mid-December 2016, the number of new drug approvals sits lower than the approvals documented in both 2014 and 2015. The Food and Drug Administration (FDA) only approved 20 new drugs in 2016 (whereas 2014 saw 41 approvals and 2015 had 45 in total) and noted that there had been a generally fewer amount of submissions last year. Drug company executives are also reigning in R&D while discussion over the control over drug pricing continues. With an obvious decline in returns, some believe that poor results in outsourcing and partner management have resulted in the substandard results seen in some pharmaceutical companies.

Furthermore, attempts to change the number of federal regulations for the sake of business may be affecting the FDA’s efficiency in their work. There’s also the issue of compromised overseas operations, where a drastic increase of FDA-issued warning letters for adulterated drug products reveals data integrity problems. As it stands, the FDA is also experiencing a shortage of working staff, leaving the Center for Drug Evaluation and Research (CDER) to struggle with conducting efficient work as they try to find reliable workers that can make it through the long-winded hiring process and the low pay. All of these problems leave room to imagine what the pharmaceutical outlook for 2017 might become—indeed, if things might get any better at all.