UK Biopharma Navigating Stormy Waters: How COVID-19 is Changing the Landscape

Part 1

UK Biopharma Navigating Stormy Waters: How COVID-19 is Changing the Landscape

In the first of two blogs, Dr. Nick Turner looks at how COVID-19 is changing the landscape for UK biopharma, addressing long-standing inefficiencies and operational pressure points.

April 2021

Dr. Nick Turner, Senior Director

Read part 2 of this blog post on the long-term challenges from BREXIT here.

Introduction

The last 12-months have seen a seismic shift in the conditions facing UK pharma. COVID has forced the broader biopharma industry to address long-standing inefficiencies and operational pressure points and adopt digital solutions to interact with external stakeholders. The challenge facing UK biopharma is in incorporating these innovative approaches into a more efficient and productive business model. At the same time, UK biopharma also has to deal with profound changes to its European operations arising from a BREXIT trade agreement that creates legal and logistical barriers to marketing drugs in the EU and may weaken the UK’s reputation as an attractive place to conduct R&D.

A New Backdrop for Biopharma Companies

There is little doubt that the COVID-19 pandemic has accelerated the adoption of digital working and changed the way biopharma interacts with its stakeholders.

Geographic lockdown measures exposed how vulnerable manufacturing and global supply chains were to disruption, giving rise to government concerns over drug shortages and prompting companies to evaluate strategies to mitigate their exposure to such existential threats. One expected outcome is a shift toward onshoring of manufacturing, including API sourcing; one very visible example is government investment in vaccine manufacturing and fill-and-finish capacity, which had previously been kicked into the long grass. In terms of technology, the last 12 months have also forced many pharma companies to adopt technologies more rapidly than they might otherwise have done. Remote management systems for inventory, workforce and supply chains have been leveraged to manage supply chain risk, with tools providing real-time visibility on current inventory levels and the tracking of goods and materials. This has created the potential to generate significant recurring cost savings, as supply is better aligned to demand.

How the industry interacts with its key stakeholders, including regulators, HCPs and end customers, has also fundamentally changed.

It is unlikely that digital and remote engagement with HCPs – adopted out of necessity during the pandemic – will fully revert to face-to-face promotional activity, with many HCPs now favoring remote detailing. Healthcare systems have also had to fall back on telehealth and virtual appointments with patients and a shift to at-home alternatives for patient care.

The pandemic has also exposed the shortfalls in healthcare provision, creating additional pressure on drug pricing and reimbursement.

Given the shortages in equipment, disposables, diagnostics and ICU beds experienced in many countries during the pandemic, we expect governments to invest more capital expenditure in fixed healthcare costs, telehealth and diagnostics. In the context of looming fiscal tightening from 2022, this can be expected to exert pressure on drug pricing as the only discretionary spending that is not politically toxic. This may see government payers placing greater emphasis on value-based criteria, and potentially a closer role for health technology assessors in the regulatory process and in determining market access.

Steps UK Biopharma Companies Can Take to Respond to This Challenge

A key near-term task, particularly for small- to medium-sized biopharma companies, will be to align pipelines and R&D with price-resilient therapeutic areas and unmet needs.

Moreover, if there is a broader lesson for the industry arising from the pandemic, it is the value of real-world data as an efficacy endpoint, potentially changing clinical trial and regulatory dynamics.

In a more cost-conscious environment, a commercial organization may have to align more closely with payers and health technology assessments (HTAs) on committing to real-world outcomes as the determinant of sustained reimbursement and formulary positioning. It is also clear that real-world evidence (RWE) is a means of product differentiation and competitive advantage. Therefore, biopharma companies need to take steps to make RWE generation a priority in their product development and life cycle management strategy, aligned with the value-based healthcare needs of their stakeholders.

Having an AI strategy can be a competitive advantage.

AI and big data are becoming a central pillar of biopharma R&D; therefore, a key move for UK biopharma will be to incorporate computational biology and machine learning (ML) into preclinical and clinical development. This move can dramatically reduce attrition in development, shorten development timelines and decrease R&D costs. AI and big data can also provide quantitative evidence of real-world cost-benefits and play a major role in smoothing HTAs and pricing discussions.

It is critical to maximize the impact of interactions with key stakeholders.

It is likely that some or all of the shift to remote healthcare practice will continue after the pandemic. To be more impactful in their engagements with HCPs, representatives and MSLs will need to be more strategic and focused on generating value and solutions for the practitioner, rather than simply providing product-orientated information. Biopharma is therefore charged with establishing HCP and patient support and engagement programs as an integral part of its commercial model, as well as maximizing the value of its engagements with HCPs and thought leaders.