Gary Connors, Partner at business consulting company Oliver Wight EAME looks at some of the most important factors that will affect the pharmaceutical industry going forward.
We advise all our clients to make assumptions and think about scenarios that could affect their business at least five years in advance. I’m not a futurist, neither are most business leaders that we work with but, while you cannot predict the future, you had better be planning for it.
Advances in new manufacturing technology accelerate
Back in 2019 I wrote a paper about transforming the drug life cycle, which included what I felt were the opportunities and the challenges that were going to affect the pharmaceutical sector over the next few years. Although I could foresee in 2019 the changes in technology that would so quickly revolutionise the industry, as a young engineering graduate (many years ago now), I researched new technologies like ‘continuous manufacturing’ that were predicted to disrupt the industry and, indeed that has happened.
In 2019 I forecast the arrival of AI in the drug discovery process, in 2023 we are seeing that this approach is now commonplace in molecule design, preclinical selection and the running of clinical trials. Beyond 2023 we will also see even more sophisticated use of cloud computing, which will enable the pharma community to innovate rapidly, manage changes effortlessly and deliver new medicines faster. Drug manufacturers will be able to upload all testing data to the cloud and use AI and ML to identify combinations that are more likely to create a viable new drug. This is already enabling small academic start-ups to leapfrog big pharma in the race to discover new drugs. More than 20% of new drugs are now coming from small innovative organisations and this percentage is increasing exponentially as these small organisations adopt this new technology.
Biopharma drug development will outpace traditional small molecule drug development
In 1993 a collaboration between BASF and Cambridge Antibody Technology developed a compound initially named D2E7 that was the first fully human monoclonal antibody approved by the FDA. Once proven, this innovative biological technology was acquired by Abbott and developed into the biggest selling pharmaceutical blockbuster in history that you may know as Humira. This behemoth eventually resulted in Abbot splitting into two separate organisations where the organisation that began Humira became known as Abbvie and continued to develop more breakthrough biological blockbusters that would have them consistently recommended as a ‘buy now’ on the NYSE.
While there will still be a place for development of small molecule drugs the future is increasingly being dominated by large molecule solutions developed through a biological route. Pharmaceutical organisations with a manufacturing footprint located in the development, manufacture and supply of small molecule solutions will have to rethink their strategies.
New drugs will be increasingly tailored to the needs of specific individuals
The idea is that the development of drugs that treat the needs of large clinical cohorts will no longer drive the discovery pipeline. The focus will shift to treating the clinical needs of each patient and will drive discovery of drugs that will treat newer conditions relating to cancer, dementia, and gender transformation.
The development of CART19 to treat leukaemia in 2014 at Penn state University by using a patient’s own T-Cells to be re-programmed to fight their own cancer cells opened the door to this concept and once Novartis acquired the technology and invested its commercialisation a new chapter in healthcare was born and has been growing rapidly since then. The CART19 drug to treat leukaemia has been approved and Novartis has established a manufacturing footprint to bring this development to the world.
Looking to the future we will see more drug discoveries that are tailored to the individual rather than being mass produced. As penicillin changed the world with mass produced antibiotics 100 years ago, so will tailor made drugs change the world in the next 10 years and drug discovery organisations are gearing up to deliver this.
Emerging economies and ageing populations will reshape supply chains
The impact that emerging economies will have on the way big pharmaceutical companies operate is a conundrum. There will be an increasing desire for life-enhancing drugs from people in developing countries, which will drive demand to record levels. At the same time government agencies will push to supply these treatments at the lowest possible cost, putting increasing pressure on big pharma.
In order to have the ability to reach a diverse population, both geographically and medically, the supply chain needs to be robust. The portfolio management efforts need to be aligned with demand management activity and supply chain performance to ensure the right amount of the right product is where it needs to be at the right time.
Sustainability: a critical issue for the industry
Nearly three quarters of the industry’s emissions come from activities like transport and packaging – which sit outside of the pharma company’s direct control. A further challenge, in a changing macroeconomic environment, is the need to balance supply and its quality with the availability of energy and costs.
Although some things remain outside of the industry’s direct control, it remains common practice amongst pharmaceutical manufacturers that single-use plastics are being used extensively in the manufacture of their products and it is common knowledge that this practice is not sustainable.
For many new drugs, which need to be stored and transported with temperature control comes the need for next generation products and service as a solution. The supply chain will need to be adapted to ensure that there is an end-to-end solution that offers control, visibility, and reliability.
Consumer awareness will catch up with what is happening beyond the appearance of the product packaging, and they will start to exercise their choices to influence the manufacturing practices too. Integrating these assumptions into the decision-making forums in the business, having meaningful discussions about the future scenarios, bringing sustainability metrics onto the executive scorecard, and allowing them to impact executive bonuses seems to be the least that they can do. These recommendations make for good advice but are also the right thing to do.
Managing the drug life-cycle will become even more important
As products in the pharma portfolio mature and are faced with an ever-decreasing exclusivity period engaging with external partners early and developing trust with contract manufacturers through shared knowledge will enable the organisations to compete against generic competitors. Organisations can look to outsource some of the early steps of the patented process or think about developing external contract manufacturing partnerships to save on costs. Once the drug reaches its end stages, plans to reduce manufacturing costs become a primary driver. The supply chain design needs to be reviewed and difficult decisions about downsizing the internal supply footprint need to be made. We have also worked with companies that have introduced the drug to emerging markets at a lower price. Whilst established markets tend to move quickly to a generic competitor, emerging markets show a tendency to stick with a trusted brand.
Planning for the unknown future
The next few years will herald an exciting new dawn for the drug discovery world but it will become more competitive not least because giants such as Amazon and other tech companies will try to get a slice of the pie. Ensuring companies have the right people, internal processes, data and robust supply chains to optimise resource, new technology and demand will be paramount.