Regs and R&D: How COVID changed life sciences

By Oliver Steck, principal, Deloitte & Touche LLP

Life sciences companies that operate in multiple countries must comply with a wide array of regulations. In the past, clients would occasionally reach out to me for information about regulations in various countries. Sometimes they were interested in real-life examples, lessons learned, and other intelligence that they couldn’t get from their internal regulatory intelligence system or processes. When someone was searching for information about a regulation in Hungary, Colombia, or Japan, for example, I typically had to scour the company directory to find our regulatory specialists in those countries.

These information requests—along with the need to help our clients see their businesses through a global lens—prompted us to bring together our regulatory specialists from around the world and formalize a process for compiling and deciphering each country’s regulations, intelligence, and other relevant information pertinent to the regulatory function. The Global Regulatory Intelligence Team (GRIT) is made up of more than 250 internal regulatory specialists in major markets and regions of the world. Every couple of months, we meet to discuss regulatory developments in North America, South America, Europe, Asia, and Australia and their likely impact on life sciences companies. This global network of specialists was particularly useful when the pandemic emerged, as outlined in our report, How COVID-19 created seismic change in life sciences regulations. Many countries declared public health emergencies, government agencies modified processes, and the industry looked for ways to collaborate with regulators and with each other.

In the spring of 2021—a year after the pandemic began—GRIT members contributed detailed information on government actions and regulatory changes. They evaluated the likely impacts on the country’s regulatory framework, and on life sciences companies. These native regulatory specialists also conducted secondary research, interviewed colleagues and contacts in the industry and in the regulatory community, and applied their own knowledge and experience. The result was a 60-page, highly detailed report that can serve as a valuable reference tool for our clients.

The new and accelerated R&D cycle

Prior to the pandemic, developing, testing, and releasing a new vaccine, therapy, or medical device in less than 10 years was almost unheard of. Today, however, companies, shareholders, consumers, and the overarching ecosystem have almost come to expect faster cycles. I don’t think R&D can ever return to the way it used to be. One reason is the cost. Long drug and device development times can add significant human, health, and economic costs to R&D efforts. By working to reduce those times through international interagency collaboration, regulators could help mitigate those costs.

Life sciences companies are likely to be more successful if they can incorporate some of the lessons they learned during the pandemic and apply them broadly. In the pharmaceutical sector, the return on investment in R&D reached its highest level since 2014, according to our 12th annual Pharmaceutical Innovation Report. The analysis indicates what could be the first signs of a reversal in a decade-long decline in projected R&D productivity. Projected ROI in 2021 increased from 2.7% in 2020 to 7.0% in 2021—the largest annual increase we’ve seen since we began tracking this data in 2010.

Once the threat of the pandemic passes, there are some concerns that the industry could take a step backwards. But it is in the interest of companies and regulators to keep communication channels open. Now that they have seen what is possible, maybe it will be impossible to return to pre-pandemic R&D processes.

Three dimensions of collaboration

The race to develop devices, vaccines, and therapeutics to detect, prevent, and treat COVID-19 led to an unprecedented level of collaboration among life sciences companies—even among fierce competitors. I see three key dimensions of collaboration:

1. Global regulatory collaboration: Over the past two years, regulators globally have been working more closely together than ever. While many regulatory bodies were involved in working groups prior to COVID-19, the pandemic turbo-charged those relationships.
2. Private-sector collaboration: Biopharma companies and medtech manufacturers are sharing information with each other in a way that would have been unimaginable just a few years ago. Case in point: In March 2020, shortly after COVID-19 was declared to be a pandemic, several large pharmaceutical companies (e.g., Eli Lilly, Novartis, Gilead, and AstraZeneca) formed a group called COVID R&D to share knowledge and resources to accelerate development of vaccines and treatments.¹ In the future, we might also see more incumbent life sciences companies forge relationships with more agile start-up companies that are innovating from the ground up.
3. Regulatory-industry collaboration: Companies and regulators learned to share information and to work more collaboratively. These closer relationships focused mainly on areas such as creating clusters of technical experts, sharing research results, leveraging inspection reports, and disseminating information. The readiness and ability of regulators to relax certain requirements, lower barriers to entry, and accelerate certain approval processes for new products undoubtedly facilitated rapid public- and private-sector responses. I expect collaborations between regulators and the private sector will grow stronger.

It would be impossible for regulators and life sciences companies to perpetually operate as though they were responding to a public health emergency. However, some of the efficiencies gained in the first two years of the pandemic have likely forever changed the way we see collaborations, R&D, and the regulatory process. The ability for regulators and companies to adapt quickly could mean we are better prepared for the next health emergency. Life sciences companies and regulators should strive to sustain the type and levels of communication they developed during the pandemic. Ensuring open lines of communication could help build stronger, wider bridges connecting the industry and its regulators. Open communication could also help prepare regulators and companies for future crises and enhance trust and improve relationships in ordinary times.

Endnote:

1. How the pharma industry pulled off the pivot to COVID-19,” The Scientist, July 13, 2020.

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