The Major Trends Defining Global Lifesciences and Healthcare 2020-21

The Life Sciences and Healthcare sector has always been fast paced and responsive as needs evolve, adapt, and are influenced by the external environment. Recent years have seen a perfect storm of challenges facing the sector ranging from blockbuster drug patent expiration to pipeline contraction, pressures to reduce pharmaceutical product costs in large markets such as the US as well as realignment of business models and broader diversification. The outbreak of Covid-19 initially in China and then its global spread has now placed the sector under even more pressure to increase its performance and pivot where necessary to meet changing needs.

1. Global Risk and Uncertainty: before Covid-19 reared its head and changed the world possibly forever, the industry was seeing some significant headwinds driven by changes to the global market. The US-China trade war has continued unabated and the issue of tariffs remains a major challenge to firms wishing to operate in that space. Regulatory pressures have also continued to impact on the bottom line as governments and international organisations push hard on compliance including the cost of medicines in the US market and the required reduction of emissions for the global shipping fleet shipping. The impact of patent expiration continues to impact several leading pharma firms as New Product Identification and biosimilar take up remains slow.

2. Big Data and the Digital Agenda: data has always played a huge role in the sector including the collection of medical data for product development and patient testing product development, manufacturing and supply planning, distribution and inventory control as well as product marketing. The ability to automate data extraction will have a huge impact on quality and safety teams to rapidly move content from unstructured formats such as written forms and translate data for analysis and optimise processes. Digital Therapeutics and the expansion of smart device usage are providing large volumes of health data which will require analysis, interrogation and application to existing sector products and services. The ability to track, monitor and share real time health data will begin to shape the future structure and operation of many firms operating in this space.

3. Supply Chain Complexity: tied in with the emerging changes and developments to big data, the complexity of supply chains continues to grow as demand patterns are affected by the range of global issues outlined above. Supply and Demand Planning has become far more challenging in the wake of Covid-19, non-linear and unplanned close downs of different markets and continents play havoc with demand, the location of product and the build-up of inventory. Distribution and Logistics Management has seen significant pressures placed on the balance of land, air and sea freight and has forced firms to reconsider the future of distribution, network optimisation strategy and manufacturing locations.

4.  Industry Structure: 2020 continues to see industry change and consolidation as firms respond to the impact of Covid-19 as well as realigning their portfolio’s in light of growing patent expiration. Several portfolios are actively moving towards a blend of chemical and biologic products reflecting the theme of Growing Personalised Healthcare. There is also a continuation of Increased Regulatory Pressure for firms especially in the US market where the FDA is challenging the price of medicines which prevents so many ill patients from receiving the care that is needed. Additionally, as more firms have sought to delegate work to CMOs and 3PL providers in recent years there is now a greater emphasis on third party risk ad compliance than ever before.

5. Covid-19 and Beyond: Above all else, the impact of Covid-19 on the lifesciences sector has been and continues to be enormous. The sector has played a leading role in the drive to develop new and existing products to protect and treat patients of this virus and support governments in protecting against future waves and outbreaks. However aside from this drive to address the pandemic, Covid-19 has impacted on businesses models in a way unseen in decades and may end up being a gamechanger for the wider sector. Impacts on the Planning, Supply and Distribution of products has been changed potentially forever. The standard Bullwhip effect which undermines supply chain value has been exaggerated by the closedown of economies, the delay in shipping products between producers and patients/consumers as well as requiring providers to build up pockets of cost through inventory and the wider risks associated with that. Additionally, the need to respond rapidly to the effects of the pandemic (as well as any future pandemics) has made the industry very aware that the pace at which a new entity is identified and ultimately manufactured requires increasing significantly while retaining existing levels of Quality Assurance.