Halfway through 2024, here are three trends that are shaping pharma companies

Shaping pharma in ’24: Innovation, CGTs, and women’s health

By Namrita Negi, head, Life Sciences Knowledge Center Deloitte Consulting LLP, and Alex Blair, senior manager, Deloitte Consulting LLP

Last November, we launched a semi-annual blog series where we explore some of the trends influencing the life sciences sector. In each blog, we identify three trends and offer our analysis. Our prior blog highlighted growing competition among biopharmaceutical companies in oncology. We also looked at the impact state and federal regulations are having on pharmaceutical companies, and the Securities and Exchange Commission’s emerging climate disclosure requirements (see 2023 trends and drivers for pharma).

With the first half of 2024 behind us, here are three additional trends that are likely to continue to influence pharmaceutical companies during the rest of the year and beyond:

Trend #1. Biopharmaceutical companies may have entered an innovation renaissance: Last year, the U.S. Food & Drug Administration (FDA) approved 73 novel drugs spanning multiple therapeutic areas. More than half (51%) of those approvals were for rare diseases such as Sickle Cell Disease, Hemophilia A, and Duchenne muscular dystrophy.¹ Oncology was the leading therapeutic area with 17 approvals.² Between January and May 2024, FDA approved 21 novel drugs, including six for cancer indications, and eleven drugs to treat rare diseases.³ The industry’s research and development (R&D) pipeline is at an all-time high with more than 22,800 drugs—up 7% from 2023.⁴

Our analysis: High innovation activity could lead to increased competition across therapeutic and disease areas. An increasingly challenging regulatory landscape, combined with growing cost pressure, can make it more difficult to launch new products. Rising competition and financing constraints in the health care ecosystem have led some payers to exert more control on utilization, even in therapeutic areas such as oncology and rare diseases.⁵ Year-five sales projections for the 10 top-selling drugs approved in 2023⁶ is 40% lower than the similar cohort from 2019, according to our analysis. Also, our 2023 report, Drug launches reflect overall company performance, determined that 34% of all new launches failed to reach even 80% of annual sales projection in the first year. Biopharma companies might want to consider robust launch planning and differentiation strategies to help ensure market share in increasingly competitive markets. Evolving market dynamics may necessitate investment in generating real-world evidence and cost-effectiveness data and adapting commercial strategies.

Trend #2. The expanding cell and gene therapy (CGT) market involves innovative approaches: 2023 was a record year for CGTs with seven approvals, including the first-ever approval of a CRISPR gene editing therapy.⁷ The FDA has approved four CGTs this year and at least seven additional products are expected to receive approval by year’s end.⁸ Along with more next-generation therapies coming to market, the populations these treatments are targeting are expanding beyond rare diseases. While the CGT market appears to be accelerating, biopharma companies, health systems, and payers might encounter challenges in ensuring these products are accessible to the patients who need them. Unlike more traditional pharmaceutical products, CGTs are developed from the patient’s own cells. Apheresis (the process of taking whole blood from a patient, extracting cells for the therapy, and returning the remaining blood to the patient) is a time-consuming process. Few health care facilities have the infrastructure, capacity, or staff to serve many CGT patients (see Standardization, more capacity may be needed as CGTs grow). Once the necessary blood components have been collected, it can take two to 15 weeks to develop and infuse the therapy (depending on the complexities involved). In addition, CGTs tend to be expensive (one recently approved product has a price tag of more than $4.2 million).⁹

Our analysis: CGTs are starkly different than traditional therapies and require a completely different model to manufacture and make them accessible to patients. With an increasing number of these therapies coming to market, and targeting larger patient populations, there is likely to be more pressure on the health care ecosystem to produce, distribute and finance them. Some manufacturers are exploring innovative financing models, such as outcomes-based pricing and annuity payments as well as ways to improve manufacturing and distribution efficiencies (e.g., automation).¹⁰ Given the complexities of CGTs, a tailored and multi-faceted approach is often needed. Manufacturers should consider proactively engaging with stakeholders and clearly demonstrate the value of their potentially curative, one-time treatments. Given the cost of CGTs, all stakeholders involved in the process should consider the potential impact these therapies could have on health equity.

Trend #3. Momentum is building to address gaps and disparities in women’s health: The US health system was not designed for or by women. As a result, the health needs of women have historically been underprioritized (see Can investors help women’s health break through the glass ceiling?). Women are an average of 4.5 years older than men by the time they are diagnosed with many of the same diseases (see Can FemTech help bridge a gender-equity gap in health care?). To add complexity, women manifest certain diseases differently than men. While women have historically been under-represented in health care, the tide appears to be changing. In March, the White House launched an initiative on women’s health research,¹¹ and the World Economic Forum created The Global Alliance for Women’s Health.¹²

Our analysis: A focus on women’s health is important for health equity. It also presents a potential market opportunity for pharmaceutical companies given the significant unmet needs and persisting disparities (see Can investors help women’s health break through the glass ceiling?). Women’s health encompasses not only female-specific conditions, but also the broader impact of gender on health outcomes and experiences across different diseases. Case in point: It often takes longer to diagnose women with Inflammatory Bowel Diseases, with a higher number of misdiagnoses at all levels of the health care system.¹³ Biopharma companies should consider evolving their clinical trial designs, go-to-market strategies, and patient services to address gender-related differences (e.g., hormonal, pharmacokinetics) and help ensure inclusivity and equity. Health equity is not only a social imperative, but also potentially a strategic opportunity to differentiate themselves in increasingly competitive markets.

As we guide our clients on issues that matter to them and to the broader society, we welcome the opportunity to discuss these trends with you and will continue to post here with regular updates on our observations.

Acknowledgement: Tim Schrader, manager, Deloitte Consulting LLP

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Endnotes.

^{1_{Novel Drug Approvals for 2023, FDA, January 1, 2024}}

^{2_{FDA Approves Many New Drugs in 2023 that Will Benefit Patients and Consumers | FDA}}

^{3_{Novel drug approvals for 2024, FDA, June 11, 2024; 2024 biological license application approvals, FDA, May 23, 2024}}

^{4_{Real-time tracking and analysis of the drug development pipeline, Biomedtracker}}

^{5_{IDNs’ numerous strategies and tools to manage high-cost drugs, HPM Market Access Insights, May 13, 2024}}

^{6_{More in hope than expectation: Biopharma in 2023, Evaluate, January 20, 2024}}

^{7_{Approved cellular and gene therapy products, FDA, April 26, 2024}}

^{8_{Alliance for regenerative medicine}}

^{9_{With costs up to $4.5M, cell and gene therapies redefine norms (drugdiscoverytrends.com)}}

^{10_{Managing the challenges of paying for gene therapy, Institute for Clinical and Economic Review, April 23, 2024}}

^{11_{President Biden issues Executive Order and announces new actions to advance women’s health research, The White House, March 18, 2024}}

^{12_{The Global Alliance for Women's Health, World Economic Forum}}

^{13_{Impact of female gender in inflammatory bowel diseases, National Institutes of Health, January 17, 2023}}

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