COVID Changed Life Sciences Companies…Will They Change Back? | Deloitte US has been saved
By Vicky Levy, Global Life Sciences sector leader, Deloitte Consulting, LLP
It is hard to believe we are already four months into 2022…and more than two years into the pandemic. We have seen progress in response to COVID-19 as life sciences companies, regulators, and health care providers challenged convention and replaced some traditional business models with new ones. The question is, will the industry continue to move forward, or will it backslide?
There is nothing like a crisis to force an industry to change. In the early phases of the pandemic, there was an expectation that core activities, such as research and development, and clinical trials, would grind to a halt. There was also a feeling that some pharmaceutical companies were too big to make changes, or that they would be hamstrung by their legacy infrastructure and not able to meet the moment. What we saw was quite the opposite, according to our report, Breaking barriers to digitalization in biopharma. Many companies quickly adapted as the sector was forced to become more digital and virtual. At the same time, regulators also adapted and addressed many real and perceived barriers, helping industry transition. In a blog last summer, my colleagues Anne Phelps and Neal Batra noted that the pandemic caused traditional orthodoxies in life sciences to change, and regulators had to change, too.
The good news is that there appears to be broad agreement among CEOs and executives we interviewed for our annual outlook…the sector cannot revert to its pre-pandemic ways. However, they also acknowledged that maintaining momentum could be a challenge. It’s human nature to return to more familiar ways of working because it instills a certain level of psychological confidence. But to a person, each interviewee told me they are developing strategies to ensure they don’t revert back to less-efficient legacy ways.
I am optimistic. New ways appear to be having a positive impact even beyond the notable COVID-19-related successes. After a decade of consistent declines, the pharmaceutical sector rebounded with record-high returns on investment (ROI) in 2021, according to the Deloitte's Center for Health Solutions 2021 analysis of projected R&D productivity among the top 15 largest biopharma companies. While much of the growth was driven by the development of vaccines and therapies to prevent and treat COVID-19, it wasn’t the only factor. In addition, the projected ROI jumped from 2.7% in 2020 to 7% in 2021, according to our research. This was the largest year-over-year increase in internal rate of return (IRR) we’ve seen since we began analyzing the data 12 years ago.
Four trends that could reshape the global life sciences sector
Our recently released 2022 Global Life Sciences Outlook explores some of the changes that emerged during the pandemic and explains how we expect those trends to continue to reshape the industry in the months and years ahead. Here are four key trends that are indicative of continued progress:
We are bullish on the sector given what we have witnessed over the past two years. Many pharmaceutical and medtech companies are emerging from the pandemic as more effective and nimbler than they were two years ago. We have seen an unprecedented level of collaboration and greater focus on patient outcomes and the consumer experience. The life sciences sector demonstrated a remarkable ability to pivot in response to a crisis. While a few companies might return to pre-pandemic business practices, I’m optimistic that most industry leaders will push to maintain and accelerate the progress they’ve made.
1. Rolling NDA and BLA Submissions: Accelerate Your Timeline for Review, Certara, April 23, 2021
2. Shortening Approval Delays for New Drugs: A Safe, Straightforward Prescription, MEI, June 21
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Vicky Levy is the Deloitte Global Life Sciences sector leader. In this role, she ensures our leaders around the world are able to bring the best of Deloitte to bear in the life sciences sector and guides and advises Deloitte Life Sciences leaders across our global network. Levy brings more than 25 years of global life sciences professional services experience to our clients around the globe. She advises executives across a range of topics, including executive transitions, transformation, culture and diversity, equity, and inclusion.