By Mike DeLone, US life sciences leader, Deloitte LLP
Early last summer, when we were just a few months into the pandemic, I explained how inspired I was by life sciences companies and the sector as a whole. I am optimistic and grateful that the sentiment and emotion I felt six months ago was well placed. Since COVID-19 emerged, the collective hopes of the world have been in the hands of companies that were developing vaccines, diagnostics, and therapies to defeat the virus.
As we enter a new year, I continue to be inspired. So far, at least two antiviral drugs and two COVID-19 vaccines have been given emergency use authorization by the US Food and Drug Administration (FDA). All of the vaccines have effective rates that far exceed initial expectations. Regulators recently approved an at-home COVID-19 test, and new therapeutics to treat the disease continue to be developed and tested.
Six trends life sciences companies can expect for 2021 and beyond
When countries around the world began to lock down last spring, life sciences companies could have opted to minimize their risk, pull back on investments, and weather the storm. Instead, they headed directly into the eye of the hurricane. Rather than reducing investments, many of them doubled down and poured more resources into research and development to advance both science and technology. This led to the development of vaccines, as well as new distribution and tracking innovations. The federal government helped reduce regulatory barriers and invested billions of dollars to fund research and development. In short, this is the reaction we would have all hoped for from our industry.
Here are six trends I expect will accelerate this year:
- Scientific breakthroughs will likely continue: Clouds have been hanging over the world for nearly a year. But as hope starts to shine through, we can see that scientific advances are a silver lining around those clouds. Life sciences companies, for example, have completely changed the way vaccines are developed. The speed at which the vaccines were created, approved, and administered has been nothing short of remarkable. We have also seen significant advancements in manufacturing, testing, logistics, digital supply chains, and virtual clinical trials. The knowledge that researchers and scientists have accumulated over the past year will likely create a foundation for advances that will unfold over the months, years, and decades ahead. What we endured over the past year has led to a stronger and more resilient life sciences sector.
- Companies will place more emphasis on health equity and workforce diversity: I don’t know of any life sciences companies that aren’t discussing ways to improve health equity and diversity inside and outside of their walls. In December, CEOs from 37 companies formed OneTen, an organization that intends to train, hire, and promote 1 million Black Americans to jobs over the next decade.1 In a recent blog, my colleagues David Rabinowitz and Jodi Reynolds interviewed two Merck executives about that company’s efforts to improve equity and diversity. Industry trade groups are also pushing in this direction. In November, the Advanced Medical Technology Association (AdvaMed) issued a set of principles to guide the industry in addressing racial health disparities. The organization is urging its member companies to promote inclusion and equity in health care and promote research equity in the medtech industry. The Pharmaceutical Research and Manufacturers of America (PhRMA) released principles that seek to narrow health disparities and enhance "information about diversity and inclusion in clinical trial participation." Life sciences companies have much to gain by developing products for more diverse populations. Improvements to decentralized clinical trials, for example, make it possible to reach and include populations that previously might not have been represented. As my colleagues Asif Dhar and Kulleni Gebreyes noted in a recent blog, COVID-19 is disproportionately affecting Blacks, Latinos, and indigenous people. There was a concerted effort to include brown and Black populations in COVID-19 vaccine research, but there is still a lot of work to be done in this area. I have no doubt the industry possesses the fortitude needed to make it happen. Improvements in health equity and diversity can benefit every aspect of our world!
- Partnerships and alliances could grow stronger: We have seen an unprecedented level of collaboration among fiercely competitive companies. They are sharing science and working together against a common enemy. As the pandemic subsides, I expect life sciences companies will continue to seek out the best science available, either through acquisitions, partnerships, or collaboration. There appears to be an acknowledgement that companies can accomplish only so much on their own. While there have been some bumps along this road, we have witnessed what companies can accomplish when they truly collaborate, share meaningful information, and work with regulators to expedite development while ensuring safety. Now that companies have traveled down that road, I don’t think there is any way they can turn back. Imagine the power and impact of the best science, the best technology, and the best information and ideas…all coming together without boundaries as we move forward!
- Public perception could improve: It’s no secret that the public has had a low perception/opinion of the life sciences sector—pharmaceutical companies in particular. Sadly, just last year, the pharmaceutical industry was ranked dead last—in an opinion survey of American consumers—behind 25 other industries and the federal government.2 According to Deloitte’s 2019 Consumer Survey, pharmaceutical companies ranked behind all other health-based sectors (e.g., physician groups, hospitals, pharmacies, health plans, and independent health-related websites). Will the industry’s success with vaccines turn that perception around? I think so, as long as we avoid major missteps. The production, logistics, distribution, and administration of the COVID-19 vaccines will arguably be one of the most significant challenges the sector has ever faced. Being as close to perfect as possible will be critical, which is a high bar. There also should be a high level of transparency as hundreds of millions of people around the world are inoculated. Trust can erode quickly. A misstep from one company could negatively affect the entire sector. Once we emerge from this crisis, I believe most people will have a new respect for the industry, at least temporarily. If collaboration continues into the future, I believe there is real potential to change perspective permanently.
- Companies will likely have access to a much deeper pool of talent: Many of us have grown accustomed to working from home over the past several months. While the pandemic changed how we work, it also has prompted many life sciences companies to reevaluate their strategies for finding and recruiting talent. Geography has become less of a barrier to recruiting the best and the brightest…whether that talent is in New York City, Indiana, or India. The ability to do a job virtually, even jobs that are immensely complex, could help balance the access companies have to talent and science. I see this as a neutralizing force that could help put all companies on equal footing where they can find the right talent for every aspect of their business.
- Artificial intelligence (AI) will likely become more integrated: AI, which includes advanced analytics, natural language processing, automation, and robotics, is playing an ever-expanding role in life sciences companies. However, it is only beginning to be integrated throughout organizations, and we are still in the beginning stages of understanding where the real value lies. As consultants, we have reached a point where we are no longer selling and/or explaining the virtues of AI. Most company leaders now understand it. The next step is to scale that capability and create a level of continuity throughout an organization (versus silos of focus and pilots that don’t consider all processes). We are moving away from experimentation and pilots to integration—from research and development to accounts payable. To date, companies have not entirely seen the return on investment from AI to match the hype. However, as my colleagues Aditya Kudumala and Adam Israel noted in a December blog, life sciences companies won’t see the full potential of AI until it becomes part of an enterprise-wide strategy. Every time a process becomes digitized, there is an opportunity to capture new information and improve efficiencies by applying some level of AI and data science. COVID-19 has accelerated adoption of this potential, which has been gaining steam for the past several years.
As we turn the page on 2020, I remain inspired by the life sciences sector. COVID-19 has been the catalyst for change, and life sciences companies have risen to occasion. If the threat of the virus had dissipated after a few months, I think life sciences companies would have quickly returned to business as usual. But we are now nearly a year into the pandemic, and I don’t think the sector can go back to where it was. If nothing else, COVID-19 generated a light that has illuminated a better way to work, collaborate, and innovate…toward a much brighter future!
1. Coalition of 37 CEOs says it will hire 1 million Black Americans over 10 years, USA Today, December 11, 2020
2. Big pharma sinks to the bottom of US industry rankings, Gallup, September 3, 2019
2021 Life sciences and health care outlook | Dbriefs webcast recording
As health care and life sciences organizations continue to advance and evolve, what new developments could emerge in 2021 that will continue to shape the future of health? Access our Deloitte Dbriefs recording to discover how organizations can rethink their growth strategies by finding new areas of opportunity.