Driving life sciences innovation in a disrupted world

By Karen Taylor, director the UK Deloitte Centre for Health Solutions

In November, we were once again the strategic sponsor of the Financial Times Global Pharmaceutical and Biotechnology Summit in London. This much anticipated event in the life sciences and health care calendar attracts senior people from across the global health ecosystem, including several of my Deloitte colleagues who appeared on the conference stage as either a moderator or speaker.

Given that the conference spanned three days, it’s impossible to do justice to the breadth and depth of content covered. However, I have attempted to summarize my main takeaways from the sessions in which my colleagues participated.

The initial panel was moderated by our Global Life Sciences and Health Care Industry Leader, Greg Reh. He discussed how economic uncertainty, geopolitical conflict, climate change, regulatory reform, and other disruptive forces—as well as technological advancements—are impacting the life sciences industry. While economic pressures are undeniable, technological developments in personalized medicine, genomics, and artificial intelligence (AI) make it a very exciting time to be in the industry. Such developments can improve health for all, engage patients, and increase the probability of success of new products. 

In terms of the economic outlook, the panel acknowledged that the commercial challenges caused by the current environment meant the industry was on the brink of a perfect storm. Aging populations, rising health inequalities, and affordability of new medical innovations means governments might be struggling to meet the increasing demand and are therefore attempting to contain costs by reducing the price paid for medicines. In Europe, new pharma legislation is also looking at cutting market exclusivity for new medicines. Consequently, some companies are looking to alternative markets for launching new assets. Market competitiveness remains a sticky point in Europe. The panelists were clear that, given the long R&D cycles, more predictable incentives were needed in Europe to increase manufacturing in the region and close the ‘attractiveness’ gap between the US and Europe, especially given that China is eagerly awaiting to fill this gap. A balance needs to be struck between innovation and access, but the panel raised concerns that current pharma legislation reforms could have unintended consequences if they fail to guarantee the necessary incentives.

These challenges are often exacerbated by a talent shortage across the health care industry, requiring a shift toward a new model of working—with a focus on flexibility and wellbeing—and a dynamic use of locations (including wider geographical coverage). Work schedules should drive productivity and importantly establish an environment in which employees feel trusted and empowered to do their best work. By 2025, 70% of health care professionals will likely be digital natives so it’s important to provide the technology that can help them do their jobs more effectively.

How can supply chains be strengthened to withstand disruption?

Angela Bowden, Deloitte’s Supply Chain lead for Life Sciences, introduced the session on Supply Chain Disruption. She noted that, while pharmaceutical supply chains are essential for national health security and economic prosperity, the global economic uncertainty, geopolitical unrest, and cyber-threats present ever-evolving risks to the stability of complex pharma supply chains. Furthermore, investing in new solutions to integrate and optimize supply chains to make them more resilient can require extensive adjustment to, or the replacement of, existing processes. The participants discussed the importance of being able to respond to macro and local challenges in providing critical medicines to patients and in getting great products to patients fast.

The pandemic exposed the risks of just in time strategies and the lack of supply chain resilience, but also created several opportunities. It accelerated the adoption of technologies that enabled more end-to-end visibility and generated greater insights on the critical role of suppliers, the need for greater efficiencies, and more inventory. The panelists acknowledged that protecting pharma supply chains will likely always be a priority for companies. They are also increasingly seeing the value that AI-enabled technologies can bring in improving the accuracy of demand forecasting, inventory management, and logistics. As technology and capabilities evolve, biopharma employees will likely need to balance the pursuit of new skills with the application of their current skill set. The next generation of talent will need to be agile, digitally literate, and open to continuous learning.

What are the options for strategic partnerships in biopharma?

Vicky Levy, our Global Life Sciences Sector leader, facilitated a panel discussion on strategic partnerships in the industry, highlighting the need to go faster and further together. On a commercial level, the mergers and acquisitions (M&A) environment remains subdued. However, partnerships are increasing as technology transforms the range of services being offered to pharma companies by industry suppliers. This is helping to create a dynamic environment that enables partners to create and share value in many ways including joint ventures, alliances, and co-promotion. 

At the macro level, the economic downturn means that many small and medium enterprises (SMEs) are being pushed to rationalize and prioritize their pipelines and consider equity markets and other options for raising capital. In this environment, partnerships can provide a good alternative alongside other benefits, including the opportunity to get products to patients more quickly. Partnerships can also bring together people with complementary skills and talents. The increase in innovation hubs—bringing different but like-minded partners together—enables the identification of synergies as the industry moves to more of a pathway-based market, instead of a drug-based market.

Good relationships are key for successful and valuable partnerships. The panelists acknowledged that clarity about what each party brings to the partnership is crucial alongside the need to build trust and stay true to the agreed values. Moreover, establishing and managing partnerships requires careful thought and consideration for the partner, takes time and are often under-estimated especially when doing business across different parts of the world where cultures differ widely. 

Conclusion

The life sciences industry is in a period of relentless disruption. Advances in technology are transforming research and development, innovative treatments are reshaping health care as we know it and companies face the challenge of bringing products to market in an uncertain regulatory environment. Overcoming these challenges requires concerted action across the health ecosystem and is essential to reach our vision for The Future of Health in Europe that we explored in our latest report. I am hopeful that the discussions on these pressing topics and the various solutions highlighted at the conference will continue to drive progress toward this equitable and sustainable vision.

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