Pricing pressures and raising capital among biggest risks for global biotech companies

International biotechnology companies are facing increased risks in their key markets as a result of tightening legislation across jurisdictions, where a greater emphasis is being placed on the price paid for drugs and what value they are adding to the patient. Add to this the economic downturn, which is making investors far more cautious and selective over which projects to back, and it is evident the industry is entering one of its most challenging periods for many years. This is according to a new report by Ernst & Young, titled Strategic Business Risk: the top 10 risks for the global biotechnology industry. Co-authored with leading think tank Oxford Analytica, it identifies the top 10 worldwide risks for biotechnology companies, based on the views of top industry leaders from across the world and Ernst & Young's global biotech analysts.

Pricing pressures could squeeze innovation

The report reveals that innovations in the USA and international drugs markets may not have happened had pricing controls been applied. Many new products on the market today have only been made possible through the reinvestment of healthy financial returns on drugs sold.