2022 global life sciences outlook

Life sciences companies face distinct challenges with their very visible role in drug pricing and access to medicines, and the pandemic only underscored this focus. Even during these unprecedented times, over the last two years, many life sciences organizations have witnessed a scientific breakthrough. Shifts to more data-driven approaches across the value chain, greater collaborations, digital transformation, and the advancing CEO priorities are driving the change. A new bar has been set and companies are now willing to move beyond convention to solve the toughest challenges and stand to reap the biggest benefits.

2022 global life sciences outlook focuses on the current state of the sector, explores seven trends shaping the industry, and prepares stakeholders to take advantage of the many opportunities the pandemic has surfaced and accelerated. In the year ahead, forward-looking companies will adopt a think-digital-to-be-digital mindset and consider how these technologies can augment human capabilities and update execution of processes.

Environmental, social, and governance (ESG) – Another CEO Imperative. The impacts of the environment and climate change are increasingly viewed as a growing financial risk – both in terms of a company’s exposure to impacts, as well as their contribution to increased global warming. It is important that companies measure and report on the results of their ESG efforts to live up to the purpose set for the enterprise. The temptation can be great for being seen as ethical, as this may drive profitability. But the risks remain, even if unintentional, with bad data and communication. Building trust is a vital pathway to demonstrating the true value that biopharma companies and the rest of the healthcare ecosystem bring to society, while also being accountable to shareholders and stakeholders. Investors and other players in the capital markets are elevating their expectations when it comes to a company’s ESG progress, and boards are expected to be responsive.

Key takeaways

• By utilizing better data and analytics, life sciences companies can have a more systematic, quantitative, objective, and financially relevant approach to key ESG issues – providing ESG reporting with data integrity.
• The pandemic demonstrated that ESG factors with the most impact on life sciences include supporting innovation in medicines and treatments with the greatest need and improving access to life-saving innovation globally.
• Digital solutions for measurement and optimization are a core component for a successful net-zero strategy. Some life sciences companies are setting ambitious.
• In the coming year, biopharma companies might consider working together on specific ESG initiatives, and raise awareness of those initiatives collectively. This shall elevate the industry perception as well as the perception of individual companies.

Future-proofing operations, manufacturing, and the supply chain. Many transformation efforts begin with reinventing the operating model, and digital industrial transformation begins with strategy – including redesigning talent, transforming processes, and retooling technology. The ongoing pandemic requires not only mitigating risks, but also future-proofing manufacturing and supply chains. Life sciences companies that deploy advanced data-analytics capabilities, and make the right investments to enhance their global supply chains in the coming year, are likely to gain enduring competitive advantage and build resilience. In 2022, businesses that become product-driven should be in the strongest position to survive in the short term and excel in the long term.

Key takeaways

• Life sciences organizations are starting to adopt product-driven operating models, which focus on the customer and patient experiences, which were historically successful for many technology companies.
• Biopharma and MedTech companies are investing in fully digitizing and integrating information technology and operational technology capabilities in manufacturing. The establishment of smart factories is leading this change by seamlessly connecting and integrating disparate manufacturing systems.
• There are four drivers of performance for life sciences companies to get the most out of smart factory investments – human performance, process performance, asset performance, and network performance.
• Some life sciences companies are looking to minimize trade uncertainties and reduce customs taxes by rethinking operations and diversifying supply chains.

A shift from doing digital to being digital. While Covid-19 has accelerated the growth of digital innovation over the last two years, CEOs remain optimistic that it will continue in the years ahead. But many biopharma executives still believe we need a better digital innovation strategy. For a more holistic and enterprise digital transformation (DX) in the life sciences sector, companies must scale digitization, both within the company and outside the organization, to produce novel insights through DX partnerships. These companies will need to invest in agility, analytics, and automation. Without a plan for strategic use of data, tools are not likely to deliver the full value of digitization. And as biopharma executives address the urgency to take risks and make investments that will allow for more rapid innovation, they may also consider leapfrogging digital innovation to gain an edge over the competition.

Key takeaways

• Biopharma and MedTech companies are expected to evolve from just doing digital to being digital, which means designing and implementing a differentiating digital strategy and incorporating it into the organization’s DNA.
• Legacy life sciences organizations are being challenged by nimble startups. Digitally-native companies are digital across the board and are more cloud-ready and unlike traditional pharma companies, startups are likely to challenge the way things have historically been done.
• In the year ahead, life sciences companies are expected to integrate artificial intelligence (AI) more holistically into all processes – from preliminary research and clinical trials, to manufacturing, supply chain, and commercialization.
• AI has the potential to expedite drug development, help companies launch and market products more effectively, and make supply chains smarter and more responsive. With robust data, the potential use cases for AI in life sciences are nearly limitless.

Streamlining new models for research and regulatory. The pandemic has embarked a never changing impact in the life sciences regulatory landscape – by engaging in wide-scale collaboration, cooperation, and information sharing. The speed at which Covid-19 vaccines were able to be developed and approved through expedited regulatory processes was unprecedented, and the focus remained on safety and efficacy despite the speed. Actions taken by governments, regulators, and organizations during the pandemic accelerated innovation in products and supply chains and increased the adoption of new technologies and processes. In the coming year, regulators are looking to improve data integrity of real-world evidence, and are expected to continue embracing digital technologies and sharing worldwide research.

Key takeaways

• Getting medicines to patients quicker is a priority for regulatory agencies as well as stakeholders. Tools such as accelerated approval, priority review, breakthrough therapy, fast track, and rolling submissions expedited approval of Covid-related vaccines and treatments.
• International collaboration, focused mainly on creating clusters of technical experts, sharing research results, leveraging inspection reports, and disseminating information on how to help health care workers treat patients and stay safe, has never been as important to medicines lifecycle development as it has been recently.
• Finding ways to make drug development, manufacturing, distribution, and approval process timelines faster across the board is likely to save money, time, and resources – and most importantly, benefit patients.
• Regulators are enabling changes that will contribute to speeding up the adoption of digital therapeutics – software-based products that provide clinical, real-world and, often, real-time evidence – with the United States, Germany, and Belgium leading the way.

Transforming the talent experience. The Covid-19 pandemic has permanently altered the society’s view of work. Organizations are now thinking differently about the workspace as a virtual place where team members gather when working digitally, and solve problems in the pursuit of organizational goals. The future of work is hybrid, with many organizations seeking to re-architect their digital workplace to more effectively support a higher level of synchronous on-site and remote work, but there are still challenges. The pandemic has caused some employees to feel isolated with remote work and also induced waves of people to quit their jobs, exacerbating the issue. In the coming year, many companies will continue to grapple with how to solve these issues. How are the life sciences organizations turning the great resignation into an opportunity for a great re-imagination? A new distributed work model coupled with a diverse culture, collaboration, and co-location will be a key to success.

Key takeaways

• Life sciences and MedTech organizations should continue to be flexible in how work is done and how talent is sourced, trained, and managed.
• Almost half of the employees and a majority of millennials report they would give up some work benefits for a more flexible working space. Empowering workers to work from a location that suits them promotes a better work/life balance and a more equitable approach.
• Deloitte research finds employee engagement – which is directly correlated with productivity – is at its highest among employees who spend 60–80 percent of their time working remotely. By harmonizing technology and worker preferences, organizations can deliver a more flexible and meaningful talent experience.
• Life sciences and MedTech organizations need digital talent, software engineers, and data scientists who understand how to design a digital product and solution that meets patient needs.

Transforming the patient experience. The global pandemic has been a game changer for providing improved patient care, more critical than ever before. It has accelerated the adoption of digital and virtual health, delivering more of what patients have been asking for – convenient and consumer-friendly healthcare. However, transforming clinical trials and patient services often requires catching up to other consumer experiences in the healthcare ecosystem. The technology today has raised the bar and patient-centricity now has a new meaning. In 2022, it is time to fully partner with patients. Life sciences companies and stakeholders should cultivate deeper patient relationships, moving away from short-term relationships. Patients should be treated as longitudinal partners to better understand their disease, collect long-term safety and efficacy data, and improve care outcomes. The organizations that re-imagine their business models and put the consumer-patient at the center, are likely to succeed in transforming the journey of care.

Key takeaways

• As the stakeholders look for new ways to offer patients more meaningful experiences, they are evolving KPIs to better measure engagement and satisfaction. Patient engagement is an essential part of the R&D of biopharmaceutical products and disease management.
• The life sciences organizations should fully partner with patients to get insights into what patients’ preferences and needs are, what their current skills are, and how they can help us shape ourselves as companies and industries.
• Digital health, digital medicine, and digital therapeutics offer stakeholders an opportunity to create more personalized experiences and new ways to become patient-centric. In the coming year, life sciences and Medtech companies plan to grow investments in digital capabilities for more personalized therapies and patient support.
• AI-driven engagement, connected patient, and healthcare provider platforms provide patients and partners timely access to relevant content and treatments. Biopharma companies must undertake purposeful digital innovation to provide life-precision experiences.

Accelerating R&D productivity and industry collaboration. Many life sciences companies are currently showing a need for speed as their focus is on driving R&D productivity. Covid-19 has facilitated the adoption of new processes, originally used to expedite vaccines and therapeutic products, for the development of other drugs. Pharmaceutical companies expect to advance scientific breakthroughs and manufacture innovative products in an effort to fulfill unmet needs and stay ahead of the competition. Changes brought about as a result of the pandemic are shaping a new era in clinical trials. In 2022, pressures are expected to be on optimizing processes to fundamentally change the drug development paradigm. By making the clinical trial process more convenient for enrollment and participation, industry leaders stand to gain better research results, fewer failed trials, and more trust from physicians and patients.

Key takeaways

• As a result of the pandemic, many hospitals and healthcare institutions are revamping the clinical trial models. Researchers are finding new ways to bring more people into trials through new models that are decentralized, hybrid, and adaptive, and break down health inequity barriers and make them more inclusive.
• Digitization is reducing patient burden and reporting subjectivity, while increasing outcome accuracy. In particular, research shows that decentralized trials (DCTs) that rely on remote strategies are showing return on investment and are here to stay.
• Hybrid trials are another growing solution to improve access to trials in remote locations. Researchers should be aware of the logistical difficulties that some necessary in-person provider interactions and laboratory tests may pose for some participants.
• In addition to clinical data, genomic information and improvements in technology – like AI and quantum computing – are evolving the way life sciences organizations approach drug discovery and development.

Outlook
The last two years of the pandemic saw unprecedented collaboration across life sciences and with stakeholders. Everyone was mobilized in the interest of patients, including regulatory agencies around the world digitally sharing research. Over the next year, more patient-centric, co-created experiences will evolve to make patients more equal partners in decision-making throughout their journeys and help life sciences deliver better, more personalized outcomes. More diversity is anticipated in clinical trials driven by patients and a greater focus on health equity, enabled by decentralized trials among other strategies.

In 2022, data-driven scientists, armed with new sources of insights and real-world evidence, will be solving problems for diseases that were once thought intractable. Scientific breakthroughs, like the mRNA technologies behind the Covid-19 vaccines and cell and gene therapies, have many potential use-cases for the future. The new processes adopted to expedite Covid-19 vaccines and therapeutic products are now also being applied to speed up the development of other drugs and treatments—and companies cannot revert back to old ways. ESG is expected to remain front and center in 2022, as companies face enhanced disclosures and new global standards. Watchdogs, investors, and customers will be scrutinizing life sciences’ progress. In the year ahead, life sciences leaders will be expected to focus on material ESG factors for the sector such as access to medicines, drug pricing, environmental sustainability, health and race equity, and diversity in leadership.

Change will persist through 2022 and beyond. Many life sciences companies have experienced growth and are emboldened with stronger balance sheets from which to invest. Investments are anticipated in their portfolios, including next-generation therapies and investments, to capitalize on their digital progress. With access to a myriad of tools to gather and analyze data, it is time for life sciences companies to employ digitization at scale. A new bar has been set, and agile companies, willing to move beyond convention to solve the toughest challenges, stand to reap the biggest benefits. The greatest challenge for leaders in 2022 will be how to ensure they accelerate the progress made – and not revert to pre-pandemic norms. Bold leaders with a clear, cohesive vision will continue to take advantage of the many opportunities the pandemic has surfaced and accelerated.

This article is based on 2022 Global Life Sciences Outlook by Deloitte.