PharmExec Blog

The Seven-Billion Society: What's In It For Pharma?

On Monday, the world’s population hit the 7 billion mark, repeating a pattern of largely unrestrained growth that has endured for the last century: the world is now adding roughly one billion people every 12 years. The UN Population Fund (UNPF) estimates that, barring some unforeseen demographic or environmental/development shifts, the figure will reach just under 10 billion by 2050.

More interesting than the numbers themselves are the implications of this growth. The addition of another billion people over slightly more than a decade requires a 40 percent expansion in the global food chain, another 40 percent spurt in the availability of fresh water, and 50 percent more energy—all just to keep pace with the status quo.  Equally important is the skewed distribution of this new population profile. The sub-Saharan Africa and South Asia regions account for most of the increase, while in the northern climes population totals are set to decline, with key economies like Germany, Italy, Japan, and Russia slated to actually have fewer people in 2025 than today. And many of them will be elderly and female—not additive to the resource mix.  The rise is also disproportionately more urban than rural.  Whereas today there are 10 cities around the globe with a population of 10 million plus people, the UNPF projects that there will be upwards of 21 such cities by 2025.

What do the new numbers really mean for the business model and strategic focus in health care and pharma? Several points come to mind.

First, more people has a hidden upside—it’s called human capital. Leveraging the energy of more young people and women can yield rich dividends in economic growth. Good health is a pre-condition for achieving compensating gains in productivity to alleviate the burden of population on resources.  The health dividend also works in addressing the claims of aging populations, a cohort no longer limited to the “mature” industrialized markets. Poor countries are growing older too.

Second, that “bottom billion” of the customer base that underpins Big Pharma’s new commercial model for developing and emerging markets is going to get larger.  Cracking the “reverse innovation” nut for products and processes in a way that addresses their needs will add significantly to the industry’s success ratio in regions with the most substantial prospects for long-term revenue growth.

Third, accelerated urbanization will create new opportunities for more efficient drug distribution and to link drug therapy more closely to the provision of basic health services. The trend offers the ability to demonstrate how access to essential medicines can drive improvements in primary care and overall health outcomes. This is particularly true in maternal and child health as well as the prevention and management of chronic disease.

Fourth, it follows that drug-makers should devote time and attention to contributing to health system reform, focused on understanding how medicines can more efficiently find their way to all patients who need them, not just the affluent 10 percent at the top.  Applying “cheapening technologies” at the root of the supply chain and learning more about basic consumer preferences is central to this.

Fifth, the relationship between health, disease and the degradation of resources and the environment is likely to see more scrutiny. Interventions, tools, and technologies that help mitigate these effects represent a strong potential growth area for companies active in the health space. Quite simply, it argues for a widening of the product franchise for pharma in the years ahead. Cancer prevention and diagnostics along with nutrition management, food supplements, and control of obesity are research targets that come immediately to mind.

Finally, consider the reputational assets to be found here. One of the most prominent statistics cited by the UNPF in recording Monday’s transition to the seven billion society:  a baby born in the US today has a 50 percent chance of living to the age of 100. It’s the best argument I have heard for awhile of the value from investing in medicines innovation.

William Looney, Editor-in-Chief

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One Comment

  1. Zoe Muons
    Posted November 3, 2011 at 12:55 pm | Permalink

    Plain and simply, we need to find a way to drastically cut the population expansion. EVERYTHING pivots on that one simple fact.

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