Redesigning for speed: Addressing life cycle compression in biopharma

| McKinsey Direct

Since our last industry report in 2022, increased competition, rapid advancements in treatment, increased biosimilar adoption, and pressure from payers are increasingly requiring biopharma companies to find innovative ways to mitigate risks and capture emerging opportunities. They must also account for the influence of new policies—notably, the US Inflation Reduction Act (IRA)—on their portfolios in the coming months and years.

In this article, we aim to answer three questions:

  1. How have asset life cycles evolved in the past two decades?
  2. How might the IRA affect asset life cycles?
  3. What are the implications for biopharma companies?

Specifically, we discuss the four most prominent forces driving life cycle compression in more depth and use a hypothetical scenario based on our analysis to highlight the impact of the IRA on life cycle compression. We then look at the implications for assets, portfolios, and companies, and discuss how leaders can quickly and proactively address them.

To read the full article, download the PDF here.

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