2023 Outlook for Life Sciences: Inflation, Talent, AI Are Top Issues for Biopharma and Medtech | Deloitte US has been saved
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By Pete Lyons, National Life Sciences sector leader, Deloitte Consulting LLP
Artificial intelligence (AI), machine learning (ML), analytics, and business intelligence could have a significant impact on medical device manufacturers and biopharmaceutical companies in 2023, according to a survey of C-suite executives conducted by the Deloitte Center for Health Solutions. At the same time, those executives expect inflation, a choppy economy, on-going supply chain disruptions, and competition for top talent will shape their strategy. (Click here to see our complete survey results.)
The survey results are based on responses from 131 C-suite executives representing US biopharmaceutical companies, medical device manufacturers, health systems, and health plans.
Life sciences respondents agreed that inflation is likely to have a major impact on their organizations in 2023. While inflation appears to be stabilizing, the higher cost of consumer goods is making it difficult for some people to pay for medical services, therapies, and devices. As a result, health care consumers might put off buying prescriptions or medical devices that can help them treat or monitor a condition. I see this as a potential challenge for our medtech and biopharma clients in 2023. But it could also be an opportunity. Companies that can make their products more accessible and affordable to patients could drive more volume. This could also help companies build trust with their consumers.
Based on our survey findings, and conversations with our life sciences clients, here’s what I expect for biopharmaceutical companies and medical device manufacturers in 2023. (Next week, Tina Wheeler will offer her 2023 Outlook for the health care sector).
What can medtech expect?
Like many industries, medtech has gone through some pretty challenging times since the start of the COVID-19 pandemic. From an industry perspective, I see tremendous opportunity for medtech companies across the board as they continue to reorient themselves for a post-pandemic future. The medtech sector grew in 2022 and I expect that growth will continue, and possibly accelerate in the year ahead. Here are three trends to watch:
What can biopharma expect?
Talent is also expected to be a top issue for biopharma companies heading into the new year. About 90% of surveyed biopharma executives intend to invest in workforce development and retention—including a focus on diversity, equity, and inclusion (DEI). Attracting the best and brightest (and retaining them) is expected be an important issue in 2023. Here are three other trends to watch:
I have been focused on life sciences for nearly 20 years and have never experienced a period that has been as challenging or transformative to the industry as the last three years. While I expect life sciences organizations will continue to face (and overcome) challenges in 2023, I also anticipate we will see many new innovations and more triumphs that will help to improve our health and well-being for the year and years ahead.
Happy New Year!
1 Gene therapy pipeline 1Q2022-2Q 2025, CVS Health, February 2, 2022; Approved cellular and gene therapy products, FDA, September 19, 2022; The state of the industry, Alliance for Regenerative Medicine, January 26, 2021
2 Explaining the prescription drug provisions in the Inflation Reduction Act, Kaiser Family Foundation, September 22, 2022
3 The trust crisis, Harvard Business Review, July 23, 2019
Watch our 2023 Life Sciences and Health Care Outlook Dbriefs webcast on-demand.
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Pete, a principal in Deloitte Consulting LLP, is the national sector leader for Deloitte’s Life Sciences practice. In this role, he leads a multi-disciplinary team who serves clients in the pharmaceutical, biotechnology, medical technology, and consumer health care segments through consulting, advisory, audit, and tax services. Pete is responsible for the overall strategic direction of the Life Sciences practice as well as its go-to-market strategies and resources. He also serves in the role as Life Sciences Consulting Leader. His past roles include US Consulting Client Excellence leader where he led the group of Consulting Account Leaders across our 400+ Advantages Client Portfolio clients and focused on how we more effectively bring our services to market through our client leaders. Pete has 25 years of consulting experience focused primarily on helping Life Sciences drive significant transformations across the strategy, operations, and technology spectrum. In addition, Pete also has an extensive background in finance, project, and resource management. Pete earned a B.S. in Economics and Information Systems from Boston College and an MBA from the Kellogg School of Management at Northwestern University.