The global population is growing faster then ever before and will continue to grow by 1.24% per year until 2030. And while the population increases, it is also aging, with baby boomers at the core of this trend. The number of people aged 65 to 80 will rise to 28% compared to 22% in 2000. While increasing urbanization and a growing middle class will help to make drugs available and affordable for more people, it will also lead to a higher demand for medication.
The demand for lower drug prices has put significant pressure on the pharmaceutical industry over the past couple of years, and that trend will continue. According to Global Data Pharma’s 2019 industry outlook survey, more than 50% of respondents (globally) believe that drug pricing and reimbursement constraints will have the most significant negative impact on the pharmaceutical sector. Along with a demand for better visibility to the entire pharmaceutical process, patients are becoming warier of drug prices. Additionally, regulators and politicians are facing pressure from the current administration to freeze price increases. Pharmaceutical manufacturers are then faced with shrinking profit margins and a desire to find more cost-effective ingredients. As we look to the future, regulators, patients, politicians and payers will continue to play an essential role in forcing the industry to drive down costs of medications.
As the Industrial Internet of Things becomes more ubiquitous, companies are looking to use artificial intelligence (AI) to innovate further and optimize their manufacturing practices. AI can help improve production line efficiency, automate reporting and proactively address potential errors before they occur. Many pharmaceutical companies have been cautious in the speed at which they’ve integrated AI in their processes to date. That’s because the cost of even one failure can total in the millions, not to mention the impact on patient lives.
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