Table of Contents
Every year, Deloitte conducts a series of surveys into the life sciences and healthcare sectors, in which they interview senior executives in the biopharma and medical device manufacturing industries.
They identify the 6 most important areas for biopharma in 2024 and beyond.
1. Market Competition
The Inflation Reduction Act (IRA) of 2022 had a variety of wide-ranging aims, many of which were focused on sustainability. But one of its aims was exclusively inflation-focused: to reduce the cost of prescription drugs.
There’s a general perception that some pharma companies increase the prices for the kinds of prescription drugs that patients get through Medicare and Medicaid because they know the government is footing the bill.
The IRA has introduced two correctives to this. On the one hand, federal regulators have now been given the power to negotiate with pharma companies over the prices they charge for those drugs. And on the other, any company that raises their prices above the rate of inflation will have to reimburse the government agency for whatever the difference was.
It will be some time before all the various stakeholders can see what all of this looks like in practice, and there are already a dozen court cases challenging aspects of its implementation. But clearly, pharmaceutical companies are going to have to start taking account of this drive for greater transparency around pricing.
What this means is that it’s even more important for pharma companies to streamline their processes and consolidate their systems, so that they can create efficiencies that will help them protect their margins. As those price pressures will make the markets where they operate even more competitive.
2. Generative AI
“More than 90% of biopharma and medtech respondents said they expect generative AI to have an impact on their organizations.” – Deloitte
Artificial Intelligence (AI) has been transforming manufacturing practices and processes for several years now, and is what makes smart factories and their digital thread possible. But the explosive arrival of ChatGPT has led every business to draw up wide-ranging plans around generative AI.
AI is already used in biopharma to generate a wide range of efficiencies. It’s used, for instance, to help determine which disease areas are the most profitable ones for life sciences organizations to focus on. While:
“It is also being used to identify targets, develop molecules, accelerate clinical trials, and submit findings for regulatory approval.” Deloitte
All of which will increase over the coming months and years, as companies accelerate their use of AI around automating repetitive back room and factory floor tasks, supporting compliance and regulatory requirements, and creating efficiencies around their supply chain management.
3 Inflation
Inflation has come down in the U.S. and Europe, going from 4.9% in the U.S. in 2022 to 3.6% in 2023. And the predicted recession has, so far, been avoided. But we are still some way from the 2% range aimed for in western countries. And Deloitte found that:
“36% of life sciences respondents expect the economy and inflation will continue to influence their strategy in 2024.” – Deloitte
4. R&D Investment
Investment in research and development (R&D) is at the heart of the biopharma and medtech sectors, so it might seem surprising that Deloitte’s surveys show that executives report less emphasis on the need for R&D investment in 2024 compared to 2023.
However, this can be largely explained by concerns around the IRA and the impact it might have on pharma companies’ ability to charge the prices they need to justify the vast sums of money they plough into R&D when developing a new drug.
Those concerns will likely settle down once stakeholders see those IRA measures in practice. Furthermore, all those efficiencies that AI will be helping to produce will act as an accelerator for increased R&D investment, notwithstanding any pricing concerns.
5. DEI
One of the main things to emerge over the last few years is a greater focus around diversity, equity and inclusion (DEI). An extensive, multi-year FDA study found the 80% of the participants in clinical trials were white, and less than 20% of the drugs approved had data that evaluated its effects on black patients.
Every organization in the different health care sectors is taking steps to correct this. Specifically:
“60% of biopharma and 57% of medtech executives said addressing health equity would influence their strategies in 2024.” –Deloitte
6. Supply Chain Pressures
Another of the issues to emerge from the pandemic and its aftermath was the supply chain disruption that resulted. Unfortunately, none of those geopolitical tensions have disappeared and companies in every sector are having to factor that in to their calculations. Hence:
“Nearly 60% of biopharma executives said geopolitical tensions could have an impact on their 2024 strategies.” Deloitte
Nonetheless, those improvements in the manufacturing process that smart factories have created, and the efficiencies that increased use of generative AI promise, will help biopharma companies to address those supply chain challenges. And to future-proof their organization for whatever lies ahead.
Cora and Biopharma
Cora has been providing PPM software to biopharma and medtech companies for twenty-five years. Our software solution digitizes data and documents, streamlines processes and integrates any existing software into the one, central system.
Everyone works in the same, standardized way, using the same facts and figures and is kept permanently up to date. Which will help reduce costs, protect margins and increase revenue.
Find out more here.
