Switzerland

Pharmaceuticals 

Like other industrial sectors, the pharmaceutical and medical devices companies have felt the effects of the economic crisis and there is a potential continued knock on effect to the pharmaceutical (including medical devices ) sector. This is driven by western governments’ desire from 2010 onwards to severely cut public spending.
hero Image Pharmaceuticals

What are the challenges?

 

Healthcare reforms resulting in price and margin pressure
Healthcare spending is set to continue to rise, but ageing populations particularly in Western countries places increasing pressure on available government healthcare budgets. This, combined with the fact that a substantial amount of branded products lose patent protection in main markets soon, will reinforce the rise of generic drugs and place increasing pressure on profits for pharmaceutical companies.
 

Managing opportunities from high growth in emerging markets
The sector is increasingly focusing on new high growth markets such as China, Brazil India, South Korea, Mexico, Turkey and Russia which together are forecast to grow significantly driven by greater government spending on healthcare. 
 

Managing opportunities from high growth in emerging markets
The sector is increasingly focusing on new high growth markets such as China, Brazil India, South Korea, Mexico, Turkey and Russia which together are forecast to grow significantly driven by greater government spending on healthcare. 
 

R&D productivity and increasing R&D costs to develop blockbuster drugs
The major challenge in R&D is to tackle the speed, cost and quality of the research and development value chain. The new markets of the world demand products at much lower  cost. Key to this transformation is the way that the industry players achieve high performance in the development phases more quickly for much lower costs. The R & D units of the major pharmaceutical companies are likely to be under pressure for several years during this transformation program.
 

Manufacturing overcapacity
Overall manufacturing utilization is poor. We believe the industry will have to look for new innovative ways to pool assets and share manufacturing capability rather than continue to build its own. 
 

Achieving efficiency in the supply chain
Tax efficient supply chain management, which considers the tax and business aspects of the supply chain from both strategic and tactical aspects, may offer a way to yield additional tax benefits whilst achieving efficiency gains in the wider supply chain.
 

Improve working capital management
KPMG’s recent cash and working capital survey revealed that there is significant room for improvement in the working capital performance of European pharmaceutical sector.
 

 

How can KPMG help?

 

KPMG’s pharmaceutical practice combines broad technical expertise with deep industry knowledge to support pharmaceutical and medical devices companies in areas such as:

 

  • Tax compliance outsourcing
  • Tax efficient supply chain management
  • Transfer pricing
  • Transforming the finance function
  • Cost optimization
  • R&D project management
  • Legal entity rationalization
  • Shared services and outsourcing
  • Standardization of IT systems / processes
  • Business intelligence and improved forecasting
  • Treasury and working capital management
  • Set up of businesses in emerging markets
  • Fraud & corruption and parallel trade investigations
  • Contract compliance e.g. outsourcing arrangements, licensing / royalties, clinical trials , R&D alliances and Joint
  • Venture audits.
  • Sales and marketing ethics audits

Erik Willems

Erik Willems

Partner, Sector Head Chemicals & Pharmaceuticals, Switzerland

+41 58 249 63 04