Pharma Poised for Continued Growth in 2021 Driven By Lessons Learned From COVID-19
Rise of Start-Ups and CMOs, Swifter Regulatory Action to Spur Innovation
By Jean-Noel David, Managing Director, Seqens CDMO NA
While COVID-19 continues to cause devastation across the world, one silver lining has been the way private business, government and academia have come together to fight a common enemy and put scientific innovation in the driver’s seat like never before.
The pandemic has disrupted the pharma and life sciences industries and offered valuable lessons that will be put into play this year. We’ve learned that collaboration is key to solving major challenges; that science rules, yet age-old practicality (like covering your face and washing your hands) can be quite powerful; and that accelerated treatments that cut through bureaucracy are achievable.
From a business perspective, responding to COVID-19 will do more than spur renewed innovation and industry growth in the new year. It will also exacerbate trends already underway, such as offshoring and supply chain challenges, rising drug prices and a revisit of regulatory processes about the way drugs and treatments are approved and controlled.
The following are six key trends that promise to reshape the pharma landscape this year and beyond:
- Easing Regulations. The ability to bring COVID-19 vaccines and treatments to market in months, instead of 10-plus years, has proven that it’s possible to safely accelerate approvals. This year we may see greater flexibility and speed in bringing vital drugs to market, based on this evidence. Yet, this is trend that has been simmering for a while. The easing of regulations has been in the works since the 1980s, when Congress passed the Orphan Drug Act to spur greater innovation in treatments for rare diseases. The FDA allowed for smaller trials and less rigid evidence standards, and it offered longer patents without generic competition.
- Greater Clinical Backlogs. Because of the urgency of fast tracking vaccine approvals and implementing clinical trials, the coronavirus pandemic put a halt to many other clinical trials for critical diseases last year. In 2021, we will see those clinical trials gradually ramp up, and new DMFs being filed. Even with more flexible regulatory requirements, the backlog will cause increased burdens on the FDA’s ability to keep pace with their oversight.
- Supply Chain Disruption. Offshoring manufacturing to far-off locations, such as China and India, has been standard practice for many years now, as pharma firms became lured by lower costs. That model worked well until COVID-19 came around and many firms were unable to receive critical raw materials with any predictability. In 2021, pharma firms may reconsider their use of offshore suppliers, or at the very least, more closely vet suppliers to make sure they won’t compromise critical project deadlines.
- Rising Drug Prices. Because of the hardships faced by pharma firms, forced to close their offices, shut down their plants or limit transport via plane, ship or trucks because of sick workers, the limited supply of critical drugs, and the rising cost to produce them is increasing. In addition, in the U.S., the ever-growing network of pharmacists, pharmacy benefit managers and others all taking a slice of the profit, will continue to create a snowball effect on drug prices.
- Growth of Pharma Start-Ups. The formation of start-up firms was strong in 2020. According to CrunchBase data, in the first half of the year, “start-ups secured a record 44 supergiant funding rounds of $100 million or more.” This growth is likely to continue in 2021, driven by the need for additional COVID-19 treatments and vaccines, as well as the availability of interested investors looking to finance novel gene therapies and other pharmaceuticals.
- High Manufacturing Demand. Contract Manufacturing Organizations (CMOs), with specialized expertise and cGMP-level infrastructure, will be in high demand for companies working to quickly bring about new COVID-19 treatments, as well as drugs for cancer and other diseases. There simply will not be enough of specialized manpower and internal resources to keep pace with demand. According to MarketsandMarkets, “the global active pharmaceutical ingredients market size is projected to reach $248.3 billion by 2025.”
The pandemic ushered in a new generation in the pharma industry, and we can expect sweeping changes in how vital drugs are produced, manufactured and approved. Despite some challenging new trends, such as rising drug prices and approval backlogs, there is bright new hope for the industry in 2021 as firms, governments and consumers become inspired by the possibilities enabled through science, innovation and a common goal.
About the author
Jean-Noel David, who holds an MBA from the Goizueta Business School at Emory University in Atlanta and a Master’s of Science degree from ENSTA Paris, is the managing director for Seqens CDMO North America. He is responsible for growing manufacturing capacity, staff and equipment in North America and integrating U.S. operations throughout Seqens’ 24 manufacturing sites and R&D centers around the world.