The Life Sciences and Healthcare sector has always been fast paced and responsive as global heath needs evolve, adapt, and are influenced by the external environment. 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.
And it’s not just COVID. Life sciences is facing a perfect storm of challenges, ranging from Blockbuster drug patent expiration, to pipeline contraction and pressures to reduce pharmaceutical product costs in large markets such as the US. So what do we think are the big trends defining the life sciences and healthcare industry now?
What are the big trends defining life sciences and healthcare industry?
- Global risk and uncertainty: even before Covid-19, the industry was seeing significant headwinds. The US-China trade war for a start and the issue of tariffs remains a major challenge to firms. Regulatory pressures have also continued to impact 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 global transportation. And patent expiration continues to impact several leading pharma firms as ‘New Product Identification’ and biosimilar take-up remains slow.
- Big Data and the digital agenda: data has always played a huge role in healthcare, including the collection of medical data for product development and patent testing etc. For example, the ability to automate data extraction will have a huge impact for quality and safety teams. The expansion of smart device usage will provide large volumes of health data requiring analysis and the ability to track, monitor and share real time health data will begin to shape the future structure of many firms.
- Supply chain complexity: supply and demand planning has become far more challenging in the wake of Covid-19 – non-linear and unplanned close downs of different markets has played 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 and manufacturing locations.
- Industry structure: we will continue to see consolidation as firms respond to the impact of Covid-19 and the restructuring of companies’ portfolios of products in light of growing patent expiration. Some companies are actively moving towards a blend of chemical and biologic products, reflecting the theme of ‘Growing Personalised Healthcare’. There is also increased regulatory pressure, especially in the US market.
- COVID-19: we can’t talk about trends without mentioning the C-word. But it’s so pervasive, it has an impact on all the trends that precede it. We have mentioned the development of vaccines, PPE and testing. But it’s also been a gamechanger for business models of life sciences companies – supply chains, product distribution etc – COVID has turned everything on its head.
We’ll have to bide our time and see how the coronavirus story plays out. But we do know that the protagonist – and the eventual hero – will be the life sciences sector. In the meantime, the life sciences sector will continue to respond, react and adapt to all the changes it faces, as it always has.
If you’d like to find out more about how we can help you with your transformation project in the life sciences sector, please call me on +44 (0) 7813 900 337 or email [email protected]