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2023 Global Life Sciences Outlook

发表时间:2024-03-19 21:45

The underlying growth of the life sciences sector—pharmaceutical, biotech, and medtech—is strong at a combined US$2.83T. Life sciences companies are continuing this   strong growth, but still face significant challenges, such as the increasingly competitive market, the changing and evolving regulatory landscape, increasing pricing and reimbursement pressures, and growing demands from patients and health care providers for more effective medications and experiences as they manage health and well-being. This is all happening in the face of broader geopolitical and economic uncertainty.

In this year’s outlook, we explore more deeply the seven critical areas we see the life sciences sector investing for change: evolving portfolios and value creation; research and development; supply chain; pricing and reimbursement; patient centricity; digital transformation; and health equity. In some of these areas, we see and anticipate real advancement. At the same time, in other areas, we acknowledge and anticipate change may grind against the gears of our “new normal”—one where we continue to live and manage COVID-19.

The following are the key findings from the report:

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1. Evolving portfolios and value creation

The key portfolio decisions that life sciences companies are contemplating today come at a time of contrasts. We see a breadth of models and portfolio choices including the development of potential “blockbuster” medicines, the pursuit of next generation therapies, and a focus on diversification. These choices are being fueled by M&A as companies seek to put their capital to work. Additionally, with higher interest rates and lower valuations, medtech companies are mitigating uncertainty in the sector by divesting low-growth and low-margin assets. By doing so, medtech companies can free up capital, improving their financial profiles in the hopes of becoming more attractive to strategic acquirers.

  • Anticipation of an M&A revival raised. Much of this M&A activity slowed in 2022, as life sciences transactions surpassing US$1 billion fell by 60% compared to 2021. Notwithstanding, pharma companies with substantial cash balances have increasingly appeared ready to unleash pentup demand. One area of potential interest for acquirers are companies' multi-indication pharma products with potential applications across therapy areas, which have the potential to provide higher return. However, prospective acquirers pay a premium for that medicinal versatility.

  • Life sciences companies are actively researching the path to new revenue. And one set of developments that have invigorated pharmaceutical portfolios involve the emergence of mRNA technology. Life sciences companies will continue to see opportunity for additional streams of revenue through vaccines, mRNA technology, and next-generation treatments such as cell and gene therapy.

  • Exploring innovations in therapeutics, and research into next-generation therapies, including gene editing, is another area of portfolio expansion for life sciences companies. However, major challenges persist, notably the exorbitant upfront cost to develop cell and gene therapies, which require bespoke manufacturing processes. In addition, CGT companies are still facing shortages of raw materials as a lingering effect of the pandemic. Life sciences organizations may need to consider alternate funding and payment models to accelerate widespread adoption of their CGTs.

Figure 1 — A Typical Cell and Gene Therapies (CGT) Value Chain

  • In the current environment, companies are rationalizing their base—shedding noncore assets (including carving out assets that don’t fit within their overall portfolios or restructuring and rebalancing their portfolios). Economic conditions make many of the deals more attractive.

2. R&D

R&D innovation is one of the top actions that 91% of life sciences organizations plan to invest in more heavily during 2023, according to a Deloitte survey. Life sciences companies will continue to build on advances such as translational medicine, big data analytics, and digital innovations in research and development. And other advanced technologies will emerge. Life sciences R&D organizations are under increasing pressure to generate sustainable returns on investment given shifts in the market, regulation, and reimbursement practices, hence, companies need require reinventing and realigning traditional R&D models.

  • The growing benefits of Real-world evidence (RWE) helps life sciences organizations better understand disease progression, monitor patient safety, and assess clinical and cost effectiveness. Though life sciences organizations lagged other sectors in adopting RWE, it now is a growing part of the decision-making process. Companies are getting faster at collecting and analyzing RWE.

  • The traditional approach to clinical development is a lengthy process with only 10% success rate. Life sciences companies are actively reshaping clinical trials, through digital trials, trial simulations, retail clinics and intelligent trials, with the help of digital technology for data collection and results analysis. Not only does it advance the development and regulatory evaluation of new drugs, while reducing the time and costs of clinical trial cycles and improving patient safety, and to some extent, it addresses health equity issues.

  • AI plays a growing role in drug development. Life sciences organizations can use AI to expedite R&D and time to market, while also more accurately forecasting development costs.

  • During the COVID-19 pandemic, regulators globally have been working for collaboration and shared services more closely together than ever, which are likely to continue in the years to come. And life sciences organizations are turning to external providers for services to reduce the time it takes to develop new drugs.

3. Supply chain again a CEO agenda

Amid the volatility of the pandemic, geopolitical unrest affecting shipping and logistics, and inflation at a four-decade high, biotechnology and pharmaceutical companies are shifting away from planning for inflexible accuracy to designing agile supply chains that can bend and adapt quickly to changing conditions – and multiple scenarios. To better understand vulnerabilities in their supply chains, life sciences companies are exploring an array of practices to enable proactive scenario planning and risk mitigation.

  • Enabling end-to-end visibility is a necessity. Enhanced visibility into suppliers and investments in digital sensing capabilities helps life sciences companies avoid costly missteps.

  • Emphasis on human-centered design to boost success on the production floor. Life sciences companies that focus on high-value, relationship-driven investments in their people create more resilient supply chains.

  • In the long term, sustainability can be a supply chain advantage for life sciences companies. And circularity is becoming a prerequisite for supply chain design among life sciences companies. In addition, the push for sustainability is also driving life sciences organizations to avoid inventory imbalances when available supply doesn’t match demand.

  • Confronting geopolitical security, some life sciences companies are using blockchain for anti-counterfeiting, genomic, and clinical data sharing, revenue management, and materials transfer. Promoting supply chain visibility, industry partnerships, and distribution agility across national and regional markets is another key goal of life sciences companies, which can increase compliance and efficiency of life sciences companies over the long term.

4. Pricing and reimbursement

Historic global shifts in drug pricing and pharmaceutical reimbursement policies are colliding with intensifying competition. Life sciences companies are responding to these commercial pressures through dynamic pricing techniques and portfolio management approaches that account for a growing number of specialized treatments for a range of ailments. Companies require reposition pricing in an increasingly competitive landscape. However, in the global market, there’s also a recognition of the increasing pressure on pricing and equitable access to treatments.

  • IRA in the United States for the first time empowers Medicare, the US national health insurance program, to negotiate drug prices and compels drug makers to pay inflationary rebates. But drugs without a single source and competing products that are approved and marketed will not be eligible for negotiation. Hence, companies need to confront pricing uncertainties.

  • Promote flexible pricing approaches. As a result of the IRA drug pricing provisions, Medicare may broaden its acceptance of value-based pricing, which some health providers already offer. Adopting similar pricing for prescription drugs, however, would require an independent assessment of clinical value that would determine payment, rather than current models that define payment by the manufacturer’s list price.

  • Creating policies on drug pricing and reimbursement depends on factors such as health records, competition, and profit margins. Companies need to tailor pricing and reimbursement to regional markets. One measure for addressing shifts in drug pricing involves balancing a country’s ability to pay with the individual needs of patients. Some pharmaceutical companies are using data analytics to predict local market responses to specific products.

  • The comparatively high cost for treating diseases that affect a small population is one of the key pricing challenges for this group of medicines. As a result, marketing specialized, next generation therapies requires its own type of commercialization strategy for pricing and reimbursement.

  • To increase drug access, managing of pricing trends and transparency may cause potential legal hurdles and reputational risks for life sciences companies.

5. Patient centricity

Three-fourths of people around the world now have experience with at-home tests for a global virus, and companies are increasingly able to access, interpret, and act on the billions of patient data points. And patient expectations and their ability to voice them have risen. The conditions for true(r) patient centricity are here.

Figure 2: Pharma companies are now facing up to the need to frame their patient-centric strategies for operating in a new customer-centered, digital ecosystem.

Source: Deloitte analysis

  • Thanks to virtual checkups and smartphone-enabled diagnostic tools — and with COVID pandemic habits now increasingly entrenched — fewer patients are visiting centralized care sites and decentralized diagnostics are emerging. Life sciences companies can collect data through personal devices from a patient’s home. As life sciences companies advance patient centricity, many are exploring “real” direct-to-consumer (DTC) channels. DTC enables direct patient engagement when and where they seek it.

  • In the process of drug discovery and development, wearable devices comprise another realm of active exploration and investment for life sciences companies. The number of clinical trials has grown by more than 400% since 2010. Recruitment, however, remains a challenge for discovery research. The emergence of remote and virtual-participation trials is one method pharmaceutical companies are using to be more cost-efficient and to address patient barriers to traditional trial designs.

  • Life sciences companies need to build patient-centric partnerships for better diagnostics, experiences, and outcomes. To enhance their patient-centric offerings, life sciences companies are targeting patient cohorts that would benefit from their therapeutics more precisely through real-world data curation. By focusing on technologies that enhance the interoperability among distinct entities, life sciences companies can create a digitally interoperable ecosystem, improving patient care. However, full digitization may only be worthwhile if patients are receptive to sharing sensitive personal information.

6. Digital transformation

COVID-19 has had a profound impact on the life sciences sector, including the digital transformation. During the pandemic, cloud technologies and platforms gave organizations the scale and flexibility to enable employees to work remotely and collaborate. Cloud technology also helped reduce costs, improve time-to-discovery and insight, and collect data to improve manufacturing and supply chain operations. Companies that continue to embrace innovation will gain a competitive advantage in the coming years.

  • While a digital strategy can help a life sciences company improve, it also can expose companies to new threats as data starts to flow outside proprietary systems and into data lakes that sit on various cloud platforms. Finding the perfect balance of accessibility, while protecting critical information, brings cybersecurity and data protection to the forefront of building and growing trust.

  • Transforming the organization is becoming an inevitable trend. A Deloitte survey found that almost 80% biopharma leaders said their organizations needed to be more aggressive in adopting digital technologies. This means moving from transactional engagements to an insight-driven, value-based enterprise.

  • Deloitte’s research has found that only about 20% of biopharma companies are digitally maturing. Enterprise digital transformations deliver more significant business advantages by achieving digital maturity and applying innovation and digital technology to existing and new business models in strategic, creative, and agile ways for patient, partner, and employee impact.

7. Elevating health equity

Inequities in health systems are both broad—including significant variations in global care delivery resources, investment, and access to care—and more localized—such as unconscious bias, a lack of trust, and language barriers. Health inequities strain workforces and productivity, create supply-chain challenges, and influence consumers’ purchasing decisions. They cost life sciences companies trillions of dollars in lost productivity annually. By addressing health inequities, life sciences leaders can boost productivity, increase market opportunities, generate growth, and improve their competitive advantage.

  • The cost of health inequities is too great to ignore. Across the health ecosystem, inequities can limit people’s access to affordable, high-quality care, create avoidable costs and financial waste, and impact every individual’s potential to achieve health and well-being.

  • Data inequities are not rare. In many cases, data on race and ethnicity is not collected or properly recorded, in others, it is misused in determining treatment and diagnosis. Systemic bias can lead to poor understanding of certain diseases

  • Barriers to trial diversity persist in part because life sciences organizations have not done enough to boost awareness that trials are being offered, provide suitable access for all groups, or address issues of mistrust in underrepresented communities. Improving clinical trial diversity is imperative.

  • Stakeholders need to take action to achieve health equity. Leaders are required to design and build systems that advance health equity as an outcome. Every organization should plan to address health inequities by designing and enabling the future of health care around people and equity.

Throughout the global life sciences industry, it is critical to focus on these seven critical areas. We hope that the Global Life Sciences Industry Outlook 2023 will inspire industry players to fully grasp the industry trends, innovate and collaborate for tomorrow!

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