Mapping the Healthcare Landscape Bringing pharmaceuticals into focus

Introduction

Courtesy of the patent cliff, the pharmaceutical industry is set for a dramatic slow down in revenue growth from 2011. Industry players are therefore looking to implement strategies which will cushion them against the anticipated revenue short-fall, with diversification away from pharmaceuticals into other healthcare sectors one avenue under consideration.

Scope of this research

• Analysis of Big Pharma's current business model, and the mergers, acquisitions and divestments which have shaped it.
• Classification of the human and animal healthcare landscape.
• Analysis of ten healthcare sectors using market size, operating margin, and indicative profit potential.
• Assessment of the healthcare landscape, with key recommendations for pharma companies looking to make future M&A decisions.

Research and analysis highlights

The average operating margin of pharma-focused companies tends to be higher than that of those with a more diversified business model, implying that increasing pharma-focus is the best strategy to drive profit growth.

Both the market size and operating margin associated with pharmaceuticals makes it the most rewarding of all ten healthcare sectors under analysis, and suggests that diversification on the part of Big Pharma will tend to end in profit dilution.

Patents are key to the high rewards associated with pharmaceuticals, and are also responsible for making the medical device/diagnostics sector the third most attractive sector under analysis, with branding playing a similar role for consumer/over-the-counter health.

Key reasons to purchase this research

• Understand how Big Pharma's business model has evolved, and how this has impacted on operating margin.
• Identify the major sectors within the healthcare landscape, and understand how they relate to one-another.
• Analyze the attractiveness of each sector as a target to diversify into, based on market size, operating profit, and indicative profit potential.