Internal and External Challenges to Biopharma in 2019

Published on: 
BioPharm International, BioPharm International-01-01-2019, Volume 32, Issue 1
Pages: 5

Pricing pressures, investment volatility, and government disfunction greet Biopharma in 2019.

Good news about a record-setting number of new drug approvals in 2018 was tempered by financial and political pressures external to the industry. Questions on Pharma’s 2019 agenda include pressure to lower drug prices and contain costs, and deal with a volatile investment market and contentious federal government.

In the annual GlobalData outlook report (1), 51% of respondents said drug pricing and reimbursement constraints will have the greatest negative impact on the biopharmaceutical industry in 2019. Many drug companies kicked off 2019 with price increases for more than 100 drugs averaging 6.3%.

Investment options

The investor market in 2018 ended on a downward trend. The Vantage 2019 Preview report (2) said it was difficult to predict how much further the market may fall; those interviewed for the report expected a more volatile year.

Companies looking for funding will have to work harder in 2019, but the report says financing options are not expected to dry up. While there is enthusiasm over new therapies, these products must prove commercial success to maintain investor interest in biologic products, the report said.

A Deloitte report (3) said the majority of US companies were interested in investing in research and development (R&D), business operations, and capital projects, including some US operations, as a result of the corporate tax reforms of the Tax Cuts and Jobs Act enacted in December 2017. The biopharma executives surveyed said they were likely or very likely to invest in R&D (67%), capital projects (57%), general business operations (50%), share buybacks (50%), and M&A (42%). Lower priority investments were compensation/pension funding (40%) and hiring (40%).

The 2016 presidential election and tax reform debate of 2017 put some mergers and acquisition activity on hold, according to the Deloitte report; however, deals picked up in the first half of 2018.


In three weeks spanning the end of 2018 and start of 2019, Pfizer and GlaxoSmithKline announced a merger of their consumer healthcare products businesses; Eli Lilly announced the acquisition of Loxo Oncology for $8 billion; and Bristol-Myers Squibb announced it will acquire Celgene for $74 billion. 

Restructuring FDA?

While the pharma industry-and the rest of the nation-awaited a resolution to the partial government shutdown, a white paper (4) based on input from seven former FDA commissioners, recommended FDA be reconfigured as an independent federal agency. A new structure is needed, they argued, to promote science-based decisions, increase transparency, streamline processes for developing regulations and guidance documents, and allow for more responsive and predictable decision making.

The paper stopped short of recommending a new model for agency operations but defined several major shortcomings of current operations. With federal government operations on hold over political squabbling, it was nice to see constructive efforts to address faulty practices.


1. GlobalData, The State of the Biopharmaceutical Industry–2019, January 2019.
2. A. Brown, J. Gardner, and E. Elhmirst, Vantage 2019 Preview, December 2018.
3. D. Green, M. Zellars, and C. Chang, “Life Science Companies More Bullish on US Investment Post Tax Reform,” Deloitte Insights, 2018.
4. The Aspen Institute, Seven Former FDA Commissioners Recommend: FDA Should be an Independent Federal Agency, White Paper, January 2018.

Article Details

BioPharm International
Vol. 32, No. 1
January 2019
Page: 5


When referring to this article, please cite it as R. Peters, “Internal and External Challenges to Biopharma in 2019," BioPharm International 32 (1) 2019.