The economic fall-out is hurting the life sciences industry hard and a new study claims that the sector will still suffer “long after the upturn” and needs to make “significant changes” to address market challenges.

The analysis, released by Capgemini, begins by claiming that the issues facing the industry are rooted in longer-term trends and can therefore be expected to persist after the economy is back on its feet. However the consultants also note that two-thirds of life sciences companies interviewed (over 30 senior industry executives, including people at 12 of the top 20 global pharmaceutical companies) “point to a recovery within the next 24 months”.

The study acknowledges that the effects of the current economic climate are putting increased pressure on pharmaceutical companies in particular to contain their costs, but this need has not just arisen from the recession. Capgemini notes that patent expiries, a lack of products in late stage development pipelines, pricing pressures and tougher regulatory environments will continue to make life difficult. As for biotechnology companies, they are still finding it difficult to obtain funding for R&D.

Therefore, to prepare for the upturn, the report says that life sciences companies will need to adopt more radical cost-reduction strategies and “transform themselves in ways that go well beyond cost considerations”. Hanne Buus van der Kam, Global Life Sciences Lead at Capgemini, said that “pharmaceutical and medical device companies will be fraught with profitability challenges for the foreseeable future,” and “imminent changes to science, markets and society…add up to an urgent need for industry transformation that can no longer be postponed”.