World Pharma and Biotech industry: the global state of play
By World Healthcare Journal-
2020 was the year the pharmaceutical industry discovered it can do things it never dreamed were possible. A novel, deadly virus was discovered, a vaccine developed against it, trialled, approved and delivered to, at current count, 2.26 billion doses worldwide within 18 months. The pharmaceutical industry has been through extraordinary times, and has responded magnificently.
However, the economic crises triggered by the pandemic will last much longer, and pharma and biotech industries will need to apply the resilience and innovation demonstrated in 2020 forward to address them.
Healthcare system change drives pharmaceutical market change
Around the world, the pandemic put healthcare systems into shock. The prospect of demand overwhelming hospital capacity was the key driver of lockdowns. All countries created capacity within the existing hospital provision by cancelling elective surgeries and non-urgent hospital treatment, at least for a time. Primary care saw significant reconfiguration, for many patients, routine consultations became virtual - although not necessarily all digital or telemedicine as might be conceived by innovators.
As the number of face-to-face visits with healthcare professionals declined, so did new diagnoses and new treatment, and also evaluations of current patients and switching of treatments. This built a backlog of non Covid-19 patients in the system, patients who have either not seen treatment, or whose treatment has been delayed or suboptimal.
It varies by country and by therapy area, but is pervasively present, and its consequences play out both now and long into the future. Launch products, which rely for establishment on new and switch patient opportunities, had a really challenging 2020, with few exceptions, mainly Orphan medicines. In the longer term the health impact of delayed or absent treatment for patients could play out as more severe or advanced disease presentation, higher co-morbidities and even earlier deaths. It will take a decade to fully evaluate the true impact.
In 2021, and beyond, addressing the patient backlog (and the consequences of failing to do so) will be an increasingly prominent healthcare topic, as the health impact for untreated, disengaged and suboptimally treated patients becomes apparent. We expect there will be a need for public information campaigns to encourage people to come forward for diagnosis and treatment of non-acute conditions which they may have simply tolerated during the pandemic. There are also clear concerns, and some hard evidence, that mental health conditions have risen in number and existing conditions been exacerbated during the lockdown, most worryingly, among the healthcare professionals who are so vital to post-pandemic recovery.
Impact on patient journeys to effective diagnosis and treatment
Patient journeys to pharmacotherapy are now often longer and more complex because of the pandemic, and also occur in different settings. Products which allowed patients to self-administer had a differential advantage which was quite variable before - in some cases it was an obvious advantage, in others the institutional inertia which promoted administration in facilities was slow to change.
Now, the playing field is very clearly slanted toward self-administration as a consistently attractive advantage, with oral treatments (such as the oral migraine agents) clear winners. Expect to see self-administration and oral presentations become a bigger factor in health technology assessment in the future.
Economic challenge to pharmaceutical markets
In 2020, country GDPs fell an unprecedented amount and while bounce back is inevitable as lockdowns ease, the sums spent on managing the pandemic are huge, and economies are being re-shaped with unemployment sharply on the rise.
Healthcare and pharmaceutical industries generally weather economic downturns well, but there are features of this downturn which suggest particular challenge. The first is the combination of economic challenge with direct healthcare system challenge- billions of dollars spend on Covid vaccines, stretched resources and the backlog of non Covid-19 patients.
The second is the significantly reduced ability of healthcare systems to realise savings from existing pharmaceutical products going off patent. In 2009, $183 million of global market value was due to go off patent in the next five years, in 2019, it was $200 million. Similar gross figures, but the 2009 figure accounted for 30 per cent of global market value, and 89 per cent of the patent loss was small molecules. In 2019, the share of the market about to lose exclusivity has dropped to 19 per cent, of which 44 per cent is biologics.
Biosimilars are now a long-established feature of European markets, and an increasingly well-established element in the US. 2021 marks the start of the era when these healthcare systems really need biosimilars to come good on their promise to realise cost savings. Even so, the available budget for innovation will be tight, and payer barriers to access will rise.
Engaging healthcare professional customers
"To achieve maximum impact, pharmaceutical companies must perform an exquisitely calibrated balancing act of healthcare professional (HCP) engagement, ensuring the right channels are used with highly relevant content"
In 2020, Pharma moved rapidly to remote interaction with healthcare professionals out of necessity, even to the point of all virtual launches of new products. The agility of many organisations effecting this rapid change was impressive, and a more resilient hybrid model has emerged as it is clear that, while face-to-face promotion will continue to be an important part of the mix, countries see a much more hybrid promotional environment, permanently.
To achieve maximum impact, pharmaceutical companies must perform an exquisitely calibrated balancing act of healthcare professional (HCP) engagement, ensuring the right channels are used with highly relevant content.
Therapy area shifts
The 2010s were the decade of oncology: via continuous introduction of significant innovation, oncology grew its share of global prescription medicine value from 8 per cent to 13 per cent of sales from 2010 to 2020. Oncology looks set to continue to dominate the world market in the 2020s, albeit with slower growth. But the most significant growth in value of a therapy area, in terms of conditions’ prevalence, and unrealised therapeutic potential, is Central Nervous System (CNS) conditions.
The drivers behind the CNS transformation are two classic elements: perennial unmet need and innovation, but with some very specific 2020s twists. The pandemic and consequent lockdowns have led, in some countries, to an explosion of mental health disorders. Covid-19 has accelerated the trend to remote and digital healthcare at a time when the development and use of digital diagnostics and biomarkers has become possible and very relevant to many CNS conditions.
This long-term innovative investment is finally yielding fruit in a range of CNS therapy areas, including the holy grail of CNS innovation: the approval of a disease modifying Alzheimer’s treatment, Biogen’s Aduhelm.
Pre-pandemic, China had already worked hard to reform its regulatory systems, reducing the backlog of medicines applications under or awaiting review by 80 per cent by the end of 2019. New Active Substances, as monitored by IQVIA audits, entered the Chinese market in 2020 at historically high rates.
Approval is not everything, and there remain significant market access and pricing challenges for innovative launch in China, but China’s domestic appetite for innovation is growing fast – the innovative branded products segment of the market grew by 12 per cent in value between 2015 and mid-2020, while the remainder of the market grew by 3 per cent. In addition to China, Japan, already one of the key country contributors to early innovative launch sales, has also accelerated the introduction and uptake of innovation in recent years.
From 2021, the importance of China and Japan to innovative product value is likely to progressively increase, driven both by increases in attractiveness of these two markets, and challenges in the European (and possibly US) environment. This will tip the geographic balance of the global pharmaceutical industry east, which will not just influence where pharmaceutical companies get their value from, but also usher a new collection of Chinese innovators into the global market.
2020 was a year in which, by rising to the challenge of the pandemic, the pharmaceutical industry demonstrated it can accomplish that which would previously have been labelled impossible. Whatever the challenges, the pharmaceutical industry enters the remainder of the 2020s with a new sense of purpose.
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