Adapting to Market Pressures and Patient-Centric Demands in Biotech and Pharma

Shaped by rapid advances in AI, evolving market access strategies and the growing impact of tariffs on global supply chains, the biotech and pharma sector stands at a critical crossroads in 2025.

Current Commercial Trends

Revenue growth in the biotech and pharma industry has remained relatively steady. This predictability is a hallmark of the industry, driven by the consistent demand for healthcare services and products. Sales roles continue to be a preferred investment, with companies allocating significant portions of their field budgets to customer-facing positions. Despite discussions about the diminishing need for salespeople, the industry has shown that these roles are indispensable for driving revenue and maintaining customer relationships.

Patient support and medical affairs are also critical components of the field organization, emphasizing the importance of patient-centric models. The field budget allocation reflects this, with sales consuming nearly half of the budget, followed by patient support and medical affairs. This investment in customer-facing roles underscores the industry’s commitment to enhancing patient experiences and ensuring compliance with regulatory standards.

Patient Centricity in Commercial Practices

Patient centricity has been a buzzword in the industry for years, but its implementation varies significantly across companies. A poll conducted by the Alexander Group revealed that while no participants rated their commercial models as “not at all patient-centric,” there was a spectrum of responses from “slightly” to “very” patient-centric. This variation highlights the ongoing challenge of integrating patient-centric practices into commercial strategies.

Corporate culture plays a significant role in patient centricity. For instance, Genzyme’s rare disease business was renowned for its patient-centric approach, driven by its corporate culture rather than just commercial practices. This example illustrates that true patient centricity requires a holistic approach, encompassing corporate values and commercial strategies.

Incentive Compensation Trends

Incentive compensation remains a cornerstone of commercial strategy in the biotech and pharma industry. Alexander Group’s survey revealed that most companies update their compensation plans annually, with a focus on pay-for-performance models. This approach aims to increase efficiency and productivity, aligning compensation with performance outcomes.

Changes in base salary, sales headcount and target incentives are the primary drivers of budget increases year over year. While most companies adjust base salaries annually to keep up with inflation, changes in target incentives vary, with some companies opting for fixed target incentives and others adjusting them based on performance. This flexibility allows companies to manage costs effectively while incentivizing high performance.

Tariff Impacts on the Biotech and Pharma Industry

The potential impact of tariffs on the biotech and pharma industry is a topic of growing concern. A survey by the Alexander Group indicated that 43% of biotech companies anticipate a reduction in sales by greater than 5% due to tariffs. Additionally, 61% of organizations are considering reductions to their commercial budgets. This uncertainty necessitates strategic planning to mitigate the potential negative impacts of tariffs.

Strategies to manage tariff impacts include customer prioritization, investment efficiency and strategic pricing. Companies are advised to validate and rank high-impact customers, recalibrate messaging to address customer concerns and seek efficiencies in their investments. Digital tools can also play a crucial role in maintaining customer engagement and managing costs during uncertain times.

Future Outlook and Recommendations

Looking ahead to 2025, the biotech and pharma industry faces a mix of opportunities and challenges. While growth remains steady, the uncertainty surrounding tariffs and global economic conditions requires proactive management. Companies are encouraged to focus on patient-centric models, optimize incentive compensation plans and strategically manage their investments to navigate these challenges effectively.

The biotech and pharma industry is poised for continued growth, but commercial leaders must stay vigilant and adaptable in the face of evolving trends and potential tariff impacts. By prioritizing patient-centric practices, optimizing incentive compensation and strategically managing investments, companies can navigate these challenges and achieve sustained success.