A September 2019 survey by KPMG found that life science CEOs plan to achieve growth objectives in the next few years through deals. In 2018 33% of biopharma CEOs sought M&A opportunities. That number has increased to 43% for 2019. “Life sciences CEOs realize that it makes sense to find partners with capabilities in research to help bring products to market, whether that is through working with startups or venture partners or looking at technological solutions,” says Carole Streicher, KPMG’s deal advisory leader for healthcare.
Some of this deal making is being driven by low interest rates and favorable stock valuations, but business-model transformation is cited as the leading M&A driver. Cost cutting is another key factor cited. Biopharma trends we don’t expect to change in 2020.
In recent years, pharmaceutical companies have consistently prioritized investment in cancer drug development, making for an industry-wide turn toward Oncology. While cancer is still a sought-after indication in the biopharma world, there are other drug launches that are gaining momentum. Treatments in immunology and rare genetic diseases have grabbed the limelight and will continue to be one of the important biopharma trends in 2020 and beyond.
A term coined and explained in a recent report by Accenture; New Science is the use of a new mechanism, modality or technology to solve an unmet medical need. Accenture believes the use of New Science is an answer to the compressive disruption going on in the life sciences industry. There has been a decline in future value of biopharma companies, a gradual decline in the amount of time a treatment retains its leading position in the market and a struggle by the industry to compensate for lost revenue due to patent expiration.
New Science offers a more precise, effective way to treat and care for patients in ways previously not attainable. There is a 50% higher probability of technical and regulatory success with New Science as compared to other treatments. Investing six to seven times as much money in digital data and genomics than their peers to develop more precise treatments and interventions will not only improve patient outcomes but a biopharma company’s success as well. Again, biopharma trends that will continue well into the next decade.
The first draft of the human genome in 2001 was supposed to kick-off an era of personalized medicine and curative gene therapies. Due to a need for more refined manufacturing processes that meet high quality standards and a better understand of safety profiles required for clinical scale that growth has only started happening in the past few years. Several RNA and DNA based therapies are now on the market and the first curative gene therapy was approved in 2018.
The promise of gene therapies has not been realized on a wider scale but as clinical, manufacturing and technological advancements continue to improve and be innovatively applied, the real promise and significant biopharma trend of gene therapy should be realized.
The opioid crisis is being impacted through the New Science application of data. The Department of Justice is using data culled from Medicare, Medicaid, the Centers for Disease Control and Prevention and state pharmacy databases for health care prosecution. “Absent from many of these cases is that fine line often seen in health-care fraud cases that can become tricky, in figuring out whether something was medically reasonable or necessary. Here it is often straight up cash for prescriptions, no different than the exchange of money for drugs that takes place on the street every day,” said Sandra Moser, who ran the Justice Department’s fraud section until last year. Indictments of doctors, nurses and pharmacists is ongoing.
With public and bipartisan political pressure mounting over high drug prices, biopharma is paying attention. The Institute for Clinical and Economic Review (ICER), an outgrowth of Harvard Medical School with no political affiliation or official policy-making role, is getting traction with a model called Qaly first introduced in the 1960s. Qaly puts a dollar figure on a year of healthy life, calculates how much health a drug restores to a sick patient, then prices drugs accordingly. This little-known Boston nonprofit group is using Qaly to shame drug manufacturers to lower their prices.
“Enough people are paying attention to these reports that if a pharma company comes out with a price outside the range, it can cost them market share, “says John Arnold, hedge fund billionaire and financial supporter of ICER. “ICER has started real conversations about paying for value.” Definitely one of the biopharma trends to include in your long-range forecasting.
Interested in hiring or job hunting in the biopharma industry? Reach out to Biostatistics Recruiter, Nihar Parikh at [email protected].