A third of pharmaceutical industry CEOs are very confident that they can increase their companies' revenues over the next 12 months, according to PricewaterhouseCoopers 12th annual CEO survey. The survey of 47 pharma CEOs around the world indicates that the credit crunch may actually provide opportunities for many large pharma companies, particularly those with low debt ratios and strong cash positions.

Compared to over a thousand CEOs interviewed in other industry sectors, pharma CEOs are more confident and less concerned about the disruption of capital markets than their peers are, less likely to state that recent problems in the global banking system will delay investment plans, and more likely to be using internally generated cash flow as a means of financing growth.

Continuing merger activity looks likely, with pharma companies using their healthy cash balances to fund acquisitions. Pharma CEOs are more likely than their peers in other industry sectors to be planning a cross-border merger or acquisition in the next 12 months.

Simon Friend, global pharmaceutical and life sciences leader, PricewaterhouseCoopers, commented: “Pharma CEOs will have to make tough decisions about what actions are required to ensure their company’s future growth and successful operating models. Historically, external economic forces have impacted the pharmaceutical sector less than other manufacturing areas, and this year pharma CEOs are notably more confident about short-term growth than their peers. However weak pipelines require CEO's to look hard at their cost base and business structures.

“The economic downturn has created a potentially beneficial environment for large pharma companies wanting to expand and build on their R&D base. For instance in the current climate, with the yen rising against the US dollar and the euro, Japanese companies are potentially well placed to go on a buying spree for US and European pharma and biotech.”

Despite challenges such as the downturn, over-regulation and low-cost competition, 55% of pharmaceutical CEOs believe that the structural changes facing the industry's business model will have a positive impact over the long term.

Fred Hassan, Chairman & CEO of Schering-Plough Corporation, suggests that the economic downturn might provide an extra stimulus to innovate. "If we keep thinking short-term, we will not be able to deal with some of the structural challenges that need to be dealt with. In other words, tough times can make one innovate harder and faster."