How could COVID-19 affect Life Science Evolution?
As the globe is still combatting the COVID-19 pandemic and looks likely to be doing so for the next year or more, this insight focuses on how the long-lasting effects of the pandemic may shape the future of the life sciences industry. Similar to those coping with the effects of Long-Covid, companies will need to adapt over the short to long term.
Survival of the Fittest (Darwinism)
Brian D. Smith in his book “The Future of Pharma: Evolutionary Threats and Opportunities” (well worth a read), uses the theory of modern Darwinian thinking to map the evolution of the life science industry to major changes in both the social and technological landscape. In simple terms, the survivors and fatalities in the industry correspond to their ability/capability to adapt to these changing variables.
In this insight I examine some of the more significant factors that have been identified by Brian D. Smith that could steer the future of life sciences and the potential impact of the Covid pandemic.
“It is not the strongest of the species that survives, not the most intelligent that survives. It is the one that is the most adaptable to change.”Charles Darwin
Concept of Value
Historically, drugs were relatively expensive due to the need for companies to gain adequate returns to fund the development cycle over the remaining life of the patent (typically less than ten years from the issuance of the marketing authorisation). Consequently, for developing nations this limited access on the grounds of affordability.
Over recent years, the payers’ (buyers’) expectations have evolved to focus on value for money resulting in:
- Significant price pressure on companies
- The Evaluation of drugs for cost-effectiveness in addition to safety and efficacy (an example being NICE in the UK)
- An increase in added-value services (i.e. managed services, applications, etc)
With a number of previously blockbusting drugs nearing the patent-cliff and the prospect that companies need to concentrate on treating the more complicated diseases, (having picked most of the low hanging fruit) these issues are being heightened.
In the pandemic, we have seen increased focus on value for money where companies have been influenced to offer vaccines at cost price in order to improve people’s health outcomes and hopefully return to some level of normality.
“We try never to forget that medicine is for the people. It is not for the profits. The profits follow, and if we have remembered that, they have never failed to appear. The better we remember it, the larger they have been.” George Merck
The dilemma for these companies is that they are accountable to shareholders; rebalancing this and being accountable to society will ultimately deliver on shareholders expectations.
Larger Fragmented Market
During the 20th Century the main marketplace for drugs was concentrated on a relatively few developed countries and in particular, the USA. As we turned a new century, we saw a rise in emerging markets – the so called BRIC Markets (Brazil, Russia, India and China) which has led to companies adapting their business models and capabilities to meet new market demands and supply chain challenges.
What we all have learned from the pandemic is that healthcare should be addressed globally and access to medicines should be more equitable. The need to meet these demands and the customs of these markets still poses significant challenges to companies whose focus has been narrow.
Supply chain issues have had a significant impact on the disparity of vaccination programmes across the globe and led to forming new contract manufacturing arrangements, new distribution networks and increasingly collaborative ways of working between pharmaceutical companies. The pandemic also showed the weaknesses in the supply chain with reliance on low cost countries to furnish the needs of the developed markets. This is evidenced in India, arguably a global centre for life science manufacturing, and it’s struggle to provide vaccinations to its own population whilst providing supply to more developed countries
More Risk Adverse Market
Since the early 1960’s, as a response to the thalidomide scandal, regulation has continuously evolved and genuinely for the benefit of the patient; however, this increase in regulation has also been characterised with some inefficiencies in the process, leading to significant delays in getting a viable product to the market. Over recent years we have seen some introductions to enable the fast-tracking of drugs which are categorised as lower risk. This was improved further during the pandemic where it was viewed that a quicker introduction of the vaccines outweighed the risks (with the understanding that there was no significant lessening of quality). This was achieved by looking at opportunities to run parallel activities which typically are executed linearly as well as the collaborative working between companies, regulatory bodies and other parties.
It is hoped that a more efficient regulatory process will remain after the pandemic to allow for drugs which have a significant benefit on patients, to not be “unduly” held up in bureaucracy whilst ensuring that efficacy and safety standards are not compromised. If this continues it could lead to a longer period before patent expiry and an increased motivation to be cost effective.
One of the remaining concerns/risks that is still to be evaluated is that of the accelerated nature of clinical trials as part of the rush to vaccinate the global population and dampen the pandemic; this is particularly concerning for the long-term effects of the vaccination(s) on the human body, in particular adverse effects on auto-immune diseases which are being monitored in parallel to the rollout of the vaccines. Recently, there has been an increasing litigiousness nature of the market, whereby individuals target pharmaceuticals for significant pay-outs. It is hoped but not guaranteed that this practice will not return to previous levels.
Stratification of the Health Provision
Healthcare is usually provided through a combination of state funding, private or employer funding via health insurance companies, or through self-funding. Over the last ten years, we have seen a shift away from state-funded models due to sustainability/affordability. This, at the very least, could lead to a tiered system of what the state is willing to pay for and what would need to be funded by alternative means.
The pandemic has shown us the importance of state-funding which was proportional to the effectiveness of managing the mortality rates and the vaccine rollout. However, due to the economic burden of state healthcare we are unlikely to see a U-turn on the trend but it does strengthen the need for a tiered-system.
More Informed, Sceptical and Proactive Public
Since the birth of the internet we have seen more educated, informed, sometimes sceptical and certainly proactive public and patient advocacy groups. Once the sole domain of physicians, information is now available through numerous public channels which have resulted in a sharp shift of power from physician to patient.
The pandemic has been heavily if not overly reported and the power of public pressure on governmental policy has been significant as well as the rise of the anti-vaccination movement.
The proactive management of the communication (within the existing code) by all groups i.e. governments, regulators, companies and the scientific community is essential.
More Preventative Approach to Healthcare
In modern times, there has been a growing trend to prevent the disease instead of treating the disease with drugs. This has led to a focus on wellness (shifting habits and behaviours towards healthy living); more recently this has manifested itself as a more focussed approach to identify individuals’ risk factors and target these specifically.
During the pandemic we have seen an increase in adopting a healthier lifestyle and higher standards of hygiene across the globe which we all hope will remain for future years.
Another differentiator in the pandemic has come from pandemic ready countries, such as some in the African continent, who demonstrated their experiences from previous outbreaks such as Ebola, Zika and the like, by responding quickly and proactively to keep infection rates at manageable levels. More developed countries should have learned that preventative planning is required for the next pandemic to hit.
The Second Therapeutic Revolution
The life science sector is facing a second revolution particularly in the following areas:
- The recent understanding of the human genome – leading to new methods and applications
- Convergence of Pharmaceuticals and Medical Devices, so called combination products, look promising in disease management, particularly in the area of nanotechnology
Telemedicine & mhealth
Lockdown has restricted access to physicians; and in turn accelerated the transition to telemedicine and mhealth. Whilst this may have created a new barrier for some of the most vulnerable and technology challenged patients, it has ignited the trend towards empowering patients to keep track of their own health.
An unexpected consequence of the Covid-19 pandemic is that governments everywhere are having to rethink the role of digital technology in healthcare.
New R&D Technologies & Collaborations
Technology improvements have been seen in the following areas:
- Bioinformatics – how data is managed and applied
- How people and processes are managed (i.e. platforms, outsourcing and open source collaborations)
Improvements in the technology landscape have without doubt powered the development of vaccines and other treatments for COVID at break-neck speed and the ability to monitor the spread and variants of the virus as it evolves.
No one can doubt the significantly negative impact of the COVID pandemic on the human population but as we eventually come out of this we all hope that humans will learn and benefit. The importance of it’s effect on the science community and similarly within life sciences, is fundamental to us understanding life itself and to build a better one for us all.
The life science sector has faced significant challenges over the last year or so as we have seen a tectonic shift in both the social and technological landscape. Whereas the factors that have become evident over the last decade have not fundamentally changed, the stimuli has been intensified by the pandemic particularly in the social landscape.
It is difficult for us all to predict how this will change the future of the life science industry but the following maybe be prevalent
- Further consolidation/contraction of the industry
- New business models created for global healthcare provision
- Collaboration will continue to be a market differentiator
- Increased reliance/investment in technology platforms
- Greater reliance on contracting operations (i.e. CROs, CMOs, etc)
Some companies have reacted quickly to the pandemic and thrived (if not economically but perception-wise) whereas others have been too slow; for these companies it may be advisable to read Darwin’s “On the Origin of Species”!