Pharmaceutical manufacturers must earn trust from pharmacists to reverse "a prolonged period of disappointing business performance", accountancy firm KPMG has warned.

The industry was facing both "major structural issues" and "cynical stakeholders", KPMG research into the industry's future found. And manufacturers must battle this by demonstrating their integrity, KPMG stressed.

"In the race for growth, [pharmaceutical companies] have created the perception that they put their commercial goals above the interests of their biggest stakeholders and have subsequently lost their trust, with fines, court cases and product withdrawals all serving to draw attention to the industry's weaknesses," said KPMG European head of chemicals and pharmaceuticals Chris Stirling.

This would require a "radical transformation" of the industry's investment and business strategies, KPMG explained. "Those companies that can demonstrate the value of their products and are brave enough to price according to ability to pay will be the winners of the future," Mr Stirling stressed.

But KPMG predicted the industry would come under further financial pressure over the next 10 years. Falling returns on research and development and higher spend would create a "pincer movement" on costs, it said.

"At the same time, the global shift in sales growth to the emerging markets means a further squeeze is coming, as margins in these markets are far tighter than in the west," it added.

The industry would need to "wake up" and give more scrutiny to their commercial decisions, Mr Stirling advised. This would mean a stronger focus on research and development investment, he concluded: "By providing transparency on this critical decision-making process, improving governance and bringing in skills from other industries to deliver products to market more efficiently, investors will regain confidence in the industry's ability to deliver predictable returns."