By: DSM Pharma Solutions Editors
Bringing together players from across the global biopharmaceutical and pharmaceutical manufacturing value chains, DCAT is an important platform to connect for strategic discussions and to gain new perspectives through the unique insights that are shared. The DSM team joined other leading professionals at DCAT Week 2022, to explore how the pharma and healthcare landscapes are evolving and what the future of the industry might look like. Uncover five key insights from the week below.
1. Navigating the ‘new normal’
The COVID-19 pandemic has put extraordinary pressures on global healthcare budgets because of the need to roll out repeated vaccine campaigns. In fact, global COVID-19 incremental spending is estimated to reach $251 billion between 2021 and 2026.1 But now that initial vaccine initiatives have been established, the industry is turning its attention to recovery and the path to the next normal. This will likely bring fundamental changes in how the pharma industry operates – which will be both expensive and complex to navigate. But what exactly will the ‘new normal’ involve?
In order to respond to present-day healthcare challenges and opportunities, it is increasingly important that the market is guided by current health priorities. At an industry level, changes will likely focus on network optimization, patient-centricity – where research and development will be better aligned with public health interests and preferences – and meeting new demands related to capacity and efficiency. At an individual company level, organizations are prioritizing operational resilience and accelerating initiatives that enable more agility and transparency. This is being made possible through greater application of digital and analytics tools and automation. There are also changing regulations that put the onus on continuing to adapt.
2. The importance of supply chain stability
One thing the pandemic has strongly reinforced is that supply chains can be at significant risk when there is over-reliance on a location that may be vulnerable to disruption. In the US for instance, 90% of all prescriptions are generic products, but approximately 87% of active pharmaceutical ingredient (API) facilities are located overseas, presenting a risk of limited access to vaccines and medications.2 This has created a significant sense of unease throughout the industry, with many companies forced to consider moving their production-supply centers closer to their end-markets. Unlike before the pandemic, shifting production locations so that they are closer to end-demand or in lower-risk countries less vulnerable to disruption is now a routine consideration in risk mitigation. New initiatives have also already been introduced to address the issue, including an initial commitment of ~$60 million in the US to invest in domestic manufacturing.2
3. A shift from treatment to prevention
To be sustainable in the long term, it is clear that healthcare strategies must focus on prevention, rather than cure. Instead of prioritizing the treatment of those who are already sick and developing vaccines for infectious diseases only, it is predicted that innovation will increasingly focus on prevention and exploring the potential of vaccines in non-communicable diseases, like certain cancers for instance.
In addition, patients are no longer passive participants in their own care. Increased health education and literature, plus new promises of rewards for healthier lifestyles, are increasingly empowering and motivating patients to take back control of their own wellness. This is significantly shaping how the pharma industry views patients. The pandemic has forced healthcare, which has typically fallen behind other sectors when it comes to adopting consumer-friendly technologies and systems, to give patients a greater voice. The majority of big pharma companies have already started a journey towards putting the patient as the forefront of drug development. Supply chains are also becoming more patient-centric due to the increased adoption of digital tools, telehealth and app-based ecosystems.
4. The future of the pharma landscape
The global pharma market is set to be worth $1.7 trillion (at ex-manufacturer prices) by 2025, and it is predicted that the US (39%) and China (12%) will represent more than 50% of business.3 In the US market particularly, there is growing competition from Indian manufacturers, driving lower prices across multiple drug categories.
The opportunities in generics and biosimilars are also likely to be significant over the next five years as the industry approaches one of its largest patent cliffs. The number of new generic players predicted to enter the market is projected to drive sales for the top 10 generic companies down. In Europe specifically, generics and biosimilars will be promoted aggressively to save costs, but companies will still be open to innovation too. However, with biosimilars becoming increasingly competitive, manufacturers are required to find new ways to differentiate products from the originator.
Looking at therapeutic areas, oncology still leads net sales, but it was not surprising that immunology was the fastest growing space between 2020-2021 (according to US$ billion net sales), with a 20% growth rate. 4 Finally, it is also important to get ahead of disruption in the market. Although currently underestimated, Chinese innovation, population-based contracts and digital health are predicted to be major market disruptions.
5. A fast technological evolution
The pharma industry has certainly risen to the challenge in the years following COVID-19, demonstrated by the fast-tracked innovation and new technologies developed during the crisis – such as mRNA-based vaccines. Operational teams have also rallied to enable the secure supply of vital medicines across borders and handle evolving government restrictions, all while beginning to prepare for new vaccines and therapeutics. And many companies put plans in place to manage and bring stability to an otherwise unstable time. But what’s next for innovation in the space, aside from continued advancements in vaccine technologies?
It is forecast that precision medicine – which encompasses predictive and personalized medicine – will be critical in ensuring access to therapies. Precision medicine is an emerging approach to disease treatment and prevention that takes into account individual variability in genes, environment and lifestyle and allows physicians to more accurately predict the therapy that will work best for a patient. Advances in precision medicine have already led to powerful new discoveries and FDA (US Food and Drug Association)-approved treatments that are tailored to specific characteristics of individuals, such as genetic makeup or the genetic profile of a type of cancer tumor. Going forward, this market will be powered by the development of new diagnostic capabilities, e.g. wearables, and data-collecting capacity.
If companies in pharma want to survive – or even better, thrive – in a future built around prevention, early detection and personalized therapies, it’s time to reimagine traditional business models and embrace new technologies that put the patient front and center.
Discover how DSM is supporting developments across the industry – from innovation in the cannabidiol space to helping customers overcome complex formulation challenges, realizing pathways to more patient-friendly medication.
10 May 2022
4 min read
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