When road conditions change, it is important to check your roadmap if you want to successfully reach your destination. Due to a rapidly changing global healthcare landscape, various developments are affecting the way in which companies are navigating their journey. New therapeutic approaches and technologies combined with ever-more complex drugs represent just a few of the changes making demands on the industry. At the same time these changes also represent significant opportunity for all involved, particularly solution providers.

A global industry with stable growth and rapid evolution
The global healthcare industry continues to grow at a rapid pace. According to IQVIA,¹ the annual growth of the global pharmaceutical market over the next five years is estimated to be 3-6%. Within the biologics sector, the GlobalData’s Drug Sales and Consensus Forecast (DSCF) Database estimates drug sales forecast to increase from $241 billion in 2018 to $524 billion by 2025. This represents a compounded annual growth rate of 12%. Solution providers such as contract development and manufacturing organizations (CDMOs) are actually part of this positive development. Challenges associated with bringing complex biological products from development to market, combined with new and sophisticated delivery systems and changes to the regulatory framework, all favor an increased tendency for companies to enlist the support of expert partners for development and manufacturing operations.

From our end, we do expect that emerging biotech companies will launch even more new medicines in the years to come. This tendency is based in large part on shifts in business strategy and the need to maximize financial returns to investors. Given currently low interest rates, these emerging companies are well-funded with venture capital. Costs of bringing a drug to market are high. And today’s drug development activities mostly require the mobilization of a diverse and ever-increasing range of competencies. For these reasons, it is frequently not economically viable for a smaller biotech company to set up and maintain multidisciplinary teams of high-level experts that work exclusively on a single or a small number of projects. This would also not reflect their, in general, more virtual character. A partner that can offer both comprehensive and competitive support allows for the spreading of these costs across several projects. The vast level of experience gained by working on a variety of projects means a qualified CDMO can provide the competencies required to take on increasingly complex projects at reasonable costs.

Today’s biological innovation hubs
The 2019 CPhi Annual Industry Report² shows that while the U.S. still leads in biologics innovation, Germany has overtaken Japan as the world’s second most innovative biologics industry. This 3% increase in innovativeness coincides with a 3% drop in the UK’s score, an indication that the biologics business has also been impacted by Brexit. The second tier includes Sweden, France and Ireland. Not surprisingly, China has once again moved up in ranking, overtaking Italy, Spain and India due to its impressive increase in innovativeness. China is also likely to pass prominent bio regions in Korea, Ireland and Singapore in the coming years. This shift can be allocated to the strong Chinese interest in biologics due to recent investments, as well as increasing domestic innovators and biologics expertise (see Figure 1).

In the area of finished product manufacturing, Germany, the U.S. and Japan again rank as tier one nations concerning the quality of finished formulations, rising above all other major pharma economies. With the exception of the UK, all markets continue to demonstrate positive growth with Korea showing the biggest percentage growth rate in this category.

New therapeutic approaches and drug substances are a key to success
Independent from the number of new injectable drug approvals, the market size for many drug products is in fact getting smaller. Today, ever-more targeted medicines are being developed for smaller patient groups which demonstrate a greater understanding and knowledge of precision medicine. Due to newer and more precise diagnostic tools, scientists are creating new research approaches that allow physicians to set-up a therapy or treatment protocol based specifically on a patient’s physiological profile. This approach can help minimize harmful side effects and allow for even more successful outcomes while minimizing the required amount of drug to be delivered within the medication plan. Starting development in a highly targeted, patient-centric manner is also critical for success. By comparison to the past, it is far more important that patients today are treated in a holistic manner.

Digitalization, data and intelligence take center stage
The business of data and intelligence is getting more and more attention and will continue to evolve in alliance with new approaches in the area of digital health. Like other industries, the role of Big Data and Artificial Intelligence in healthcare is of increasing importance. Opportunities to capitalize on patient and other datasets will play an even more important role in the future. On a global basis, companies are engaged in developing innovative solutions in the area of digital health which include ever-more patient friendly technologies such as the incorporation of mobile phones into the medication process. The evolution of connected smart devices will create ever-more digital possibilities for the exchange of data. Nowadays, a growing number of mobile apps are submitted to the FDA for clearance and approval. Combined, these technologies will greatly contribute to enhanced patient monitoring, compliance and an adherence approach.

The consequences of a changing landscape
Given the dynamically evolving landscape in the healthcare sector, companies must rethink how they can remain successful in the future. This does not mean that the entire business will change over the course of the next few years but, rather, pharma and biotech companies together with their drug manufacturing partners must offer the right technologies and processes for both requested large and small quantities of drug products. Given the emergence of new technologies, sponsors will likely demand even more support from their partners who also have to respond quickly and effectively to industry trends and expectations. Such collaborations are able to span broad support in the complex drug development and manufacturing process, offering reliability during technical transfers and improvements along the lifecycle of complex drug products.

No doubt, what will continue to make a service provider successful will be the important aspects of quality, experience, a fitting service portfolio, the ability to manage complexity and a stable and sustainable financial structure to support complex activities. At the end of the day, having a patient-centered approach at the core of its daily activities is one of the most important success factors. 

References

1. The Global Use of Medicine in 2019 and Outlook to 2023, January 29, 2019, https://www.iqvia.com/insights/the-iqvia-institute/reports/the-global-use-of-medicine-in-2019-and-outlook-to-2023
2. CPhi Annual Industry Report 2019, https://event.cphi.com/annual-industry-report-2019/

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Peter Soelkner is Managing Director of Vetter Pharma International GmbH.