The global population is ageing! Despite the trend having been visible throughout the past decades, the global population’s ageing is now being considered one of the biggest megatrends shaping the future of our societies.
Even though an ageing population has an impact on numerous areas of our society, the healthcare industry is among those that face the greatest challenges. Hereby, both the public and private healthcare sectors are affected and are challenged to actively mitigate the risks and heightened costs caused by an ageing population. While the problems may seem manifold, the factor that might convert challenges into opportunities is innovation. Only with the help of new technology, new business models and innovative visions, challenges ahead can be overcome, and new opportunities by various healthcare players can be seized.
We are ageing
In 2019 the global number of people aged 65 or older was recorded at 703 million. This figure is projected to more than double by 2050. This trend of an ageing demographic is particularly pronounced in Europe, where people aged over 65 already accounted for 20.8% of the population in 2021. The reasons for this development are evident: an increase in life expectancy as a result of continued innovations in the healthcare sector, coupled with falling birth rates.
Ironically an increase in life expectancy has so far not automatically implied a healthier population. The timeframe during which we can enjoy the additional years in good health has only grown a fraction compared to the steadily increasing life expectancy. Many experts view this paradox as a new challenge the healthcare sector has to address. Hereby, maximizing the number of years the ageing population can enjoy in good health has moved to the forefront of medical innovation, replacing the previous goal of “simply” prolonging lives.
How an ageing population challenges our healthcare systems
While medical progress and the associated increase in life expectancy are perceived as extremely positive, society is confronted with various challenges caused by this development. An ageing population represents a major economic burden. Probably the greatest problem, hereby, are the increasing costs the healthcare sector is required to shoulder. It is projected that the ageing population will cause an increase in public spending by about 1.5% of GDP by 2035. In addition, a shortage of personnel, estimated at around 1 million health workers in Europe, further overextends existing resources.
Moreover, changes in medical priorities linked to the ageing population can be observed. On the one hand, the research focus of many healthcare players is slowly shifting towards age-related diseases including cardiovascular, respiratory and metabolic diseases. On the other hand, the spotlight is being placed on prevention and rehabilitation, rather than traditional treatment. The aim is shifting from increasing life expectancy to improving the quality of life of the older generation.
Innovation as the key to unlock vast opportunities
In order to master the above-mentioned challenges and ensure a high level of healthcare, even against the background of an ageing population, one factor can drastically improve the situation: innovation. While public healthcare can only take limited measures to alleviate pending cost pressures and staff shortages, the private sector is challenged to develop solutions for more effective and efficient care. Whilst the need for traditional pharmaceutical innovations linked to more effective therapies for age-related diseases exists, there is an increased focus on innovation in the area of early detection and the identification of health risk factors (e.g.: through P4 medicine) can help conserve resources and increase the quality of life of the elderly.
In addition to traditional pharmaceutical innovations, novel combinations of traditional therapies with new technologies (e.g.: nanotechnology, AI, etc.) are promising to address the unmet need for medical care. As a result, the pharmaceutical industry can seize new opportunities. At the heart of these new therapeutic opportunities are so-called digital therapeutics. These efficient and innovative forms of patient care can be an important key to mastering the challenges of an ageing population.
Spotlight
Virtue Health and its platform „Look Back“ are one example of preventive digital therapeutics, which can be part of a solution to challenges caused by the ageing population. The company has developed a platform that uses virtual reality to help people with dementia, a disease associated with age as well as high costs of care. The company’s therapeutic approach aims to tackle the disease through reminiscence and cognitive stimulation, helping older people to visit various locations and stimulate past memories. In addition, the VR experience can be viewed on a companion app by caregivers, along with a series of suggested questions to help stimulate relevant conversation about previous experiences. As a result, the platform not only aims to improve the mental well-being of people suffering from dementia, but also their loved ones. Next to private payers using the app in caring for their elderly relatives, Britain’s National Health Service (NHS) is among those testing the new therapeutic approach in care homes, day centres and memory clinics.
Successful entry into these new business areas requires not only traditional pharmaceutical knowledge but also the development of new business models and technological competencies. Often, established players find it useful to cooperate with innovative start-ups and other unconventional players in this area to quickly build up the necessary competencies and implement innovative visions.
While the ageing population poses challenges, effective and innovative solutions might, be found by including a diverse set of players and facilitating unconventional partnerships!
Summary
- A globally ageing population poses major challenges for both the public and private healthcare sectors, especially cost pressure and staff shortages
- For pharmaceutical companies, however, this megatrend also offers opportunities
- On the one hand, the focus of traditional pharmaceutical innovation can be shifted towards age-related diseases and preventive treatments
- On the other hand, new business areas can be developed by combining traditional therapies with new technologies
- In order to quickly establish the necessary competencies within traditional pharmaceutical companies, partnerships with innovative start-ups can help bridge existing gaps
Outlook
Given the challenges and opportunities a global ageing population presents to healthcare systems and the pharmaceutical industry, future changes and developments linked to this megatrend will definitely be interesting to observe. Nonetheless, the question remains: Will our healthcare system and the pharmaceutical industry be able to adapt fast enough to mitigate upcoming challenge? And what role will innovative technologies and new therapeutic approaches play in an ageing society?