Guest Column | October 11, 2024

Efficiency Is The New Normal

By David Miller, Ph.D.

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As professionals within the life sciences industry, a new era is upon us, marked by the pursuit of efficiency. In part this has been driven by legislative measures such as the Inflation Reduction Act (IRA), which has had significant implications for pharmaceutical companies by controlling drug prices in the U.S., potentially limiting revenue growth and investment in R&D. Meanwhile, in the European Union, initiatives like the Joint Clinical Assessment (JCA) under the Health Technology Assessment Regulation are reshaping the market access landscape. Legislative changes aren’t just headlines — they’re affecting how we all operate, pushing biopharmaceutical companies to adapt and innovate in unprecedented ways. With this, there has been a clear shift in focus toward more innovative and differentiated products that can warrant a higher price tag and offer a greater return on investment. However, despite groundbreaking innovations, pharmaceutical companies have struggled to keep pace with capital markets, with returns lagging the S&P 500 by about one-third over the last decade. This underscores the importance of not only scientific innovation but also the need for efficient strategies to drive value growth.

Alongside the pressures on pricing, recent years have seen a funding crunch for the life sciences sector. The continued industrywide job cuts highlight the scale of this challenge, with over 100 companies having laid off employees in 2024 so far. In this evolving landscape, life sciences companies need solutions that can help create more efficient processes to obtain the highest return on investment, while getting life-saving drugs to patients as quickly as possible. This is where agile tech-enabled solutions supported by real world evidence and data can enable life sciences businesses to do more with less. Engaging with specialized partners who offer these capabilities can help companies navigate these challenges effectively.

Adapting To Big Pharma’s Changes In Workflow

The industry’s need for efficiency is having an impact on the way in which businesses are being staffed. During better economic times for the industry, pharma companies tended to staff for the peaks in activity and then find work for their people in the ‘valleys,’ i.e. when activity was lower. Work streams are no longer as steady as they were, however, and therefore in today’s environment companies are using the valleys as the base level to staff the business whilst finding solutions for the peaks. This shift has led to a resurgence in outsourcing, with pharma companies increasingly turning to external partners to provide specialized services and flexible staffing solutions. Recent surveys indicate that while clients are more cautious, they continue to spend on outsourced services, expecting revenue growth in the coming years.

Maximizing Value For Biotech

With an industry need for innovation and differentiation, alongside the reduction in staffing, small biotechs are becoming the new R&D centers for Big Pharma. In fact, it is estimated that 65% of newly approved drugs now come from biotechs. This shift has emerged from the fact that biotechs are often more agile and can focus on innovative research areas that larger companies may not prioritize. R&D spending is expected to increase most rapidly for biotech and small to midsized pharma companies, with projected growth rates of 9% to 12%.

In this age of efficiency, biotechs must make themselves as attractive as possible, executing pharma-standard delivery of data and presenting their assets as high-quality and reliable. Although biotechs benefit from agility, they generally lack the scale to employ all the specific skills they need during development, and therefore they can immensely benefit from the support of a research partner to ensure that their value is maximized. Outsourcing services play a crucial role here, allowing biotechs to access specialized expertise and technologies without significant internal investments.

Embracing Technology To Commercialize Drugs Faster

Once a product has gone through the arduous process of clinical trials and regulatory approval, it now must overcome the final hurdle: pricing and reimbursement. If this process ends up being lengthy it comes at a significant cost for companies; each day of delay in drug approval costs pharmaceutical companies approximately $500k in lost prescription sales. By engaging with a partner that leverages technology, advanced methodologies, and real-world data to provide valuable stakeholder insights from early product development, pharma companies can obtain guidance that informs optimal pricing and reimbursement strategies. These research partners also can help to solve the data challenges prevalent throughout the life cycle of a product.

Generative AI is rapidly evolving and impacting life sciences in significant ways. Technology has the potential to revolutionize everything from drug discovery to patient care by automating tasks, improving workflows, and optimizing processes, leading to significant cost saving and efficiency gains. Implementing multiple GenAI use cases linked together can transform entire processes across research, development, and patient care — a “string-of-pearls” approach to transformation.

Advancements in AI and data analytics are not only improving efficiency but also transforming biomedical research from discovery to clinical trials. Recent clinical data shows an uptick in clinical trials starting in late 2023 and early 2024, indicating increased activity that will ultimately translate into more demand for clinical and commercial services.

These technological tools also can help address data challenges by extracting actionable insights from a vast array of data sets. A typical Phase III trial uses close to 10 data sources and generates an average of 3.6 million data points; appropriately utilizing this data through advanced technologies can help to speed up trials and bring drugs to market faster.

Adapting To The Age Of Efficiency  

Clearly, efficiency in the life sciences sector is here to stay. By embracing innovation, agility, and collaboration, pharma and biotech companies can achieve more with less. To achieve this, engaging with research partners that can provide integrated, agile, and tech-enabled solutions is essential. The demand for increasingly innovative and sophisticated medicines is growing, which places a greater need on pharma to outsource more specialty services and rely on data analytics to generate insights. Amidst geopolitical, economic and regulatory uncertainties, companies that innovate differently and adapt swiftly will be better positioned to succeed.

About The Author:

David Miller, Ph.D. is the Chairman and Chief Executive Officer of Genesis Research Group. Prior to this appointment, David was Senior Vice President of Global Market Access at Biogen. He previously founded a consultancy delivering business and commercial strategies for biopharmaceutical clients and served as Vice President of Pharmacoeconomics; Managing Director, Asset Executive; and Head of International Operations at Elan. David began his career at GSK, culminating in his role as Vice President of Global Health Outcomes.