Roger Humphrey is executive managing director of JLL Life Sciences.

Roger Humphrey

The coronavirus pandemic has accelerated activity within therapeutics, while at the same time making productivity harder to sustain. After all, drug development requires sensitive research environments that are not so commonly found in the average work-from-home scenario.

To meet this moment, pharmaceutical leaders face a unique challenge: how will they fill out the front lines of the global fight for a vaccine, therapies, and diagnostics while abiding by challenging social distancing precautions and modified procedures to protect their staff and communities?

The answer, at least in part, lies in a commercial real estate and facility management strategy that balances near- and longer-term priorities.

Navigating industry uncertainty, through the lens of real estate

As we speak, labs around the world—from global players to small start-ups—are actively pursuing COVID-19-related vaccine and therapy development as well as better and more abundant diagnostics. And they have been doing so amidst widespread closures, use restrictions, and rotational staffing.

According to a BioInformatics/Science Advisory Board survey (1) of 1178 scientific researchers, concerns over the COVID-19 outbreak prompted nearly half (48%) of their labs to close temporarily and restricted 39% to operating at reduced capacity, leaving a mere 13% fully operational.

In addition to the sheer logistical test of navigating re-opening while limiting interpersonal contact in the near term, industry leaders will also grapple with other, less immediate COVID-19-related uncertainties. For one, the pandemic poses yet-to-be-seen impacts on the supply chain (2), with chemical delivery delays and diminishing backup supplies expected across the board.

Uncertainty over funding sources is also growing, stymying even the best-laid plans. While the CARES Act provides FDA fast-tracking and $11 billion for the development, production, and manufacturing of COVID-19 vaccines, therapeutics, and diagnostics, it alone cannot counteract increasing variability in critical venture capital and private equity funding. Considering such resources typically make up the lion’s share of R&D, operations, and capital projects funding long-term plans are being disrupted, with many proposed expansions and construction projects now held up to divert capital to more immediate needs.

Uncertainty abounds, but one thing is clear: industry leaders must find novel ways to ramp up efficiency and productivity. Enter commercial real estate and facility management strategy.

Bringing visionary, data-driven insights to these complementary functions can play a crucial role in fueling organizational productivity now and into the future. First and foremost, it can build on the industry’s already rock-solid experience in compliance to re-open labs safely and effectively. Informed real estate strategy will also support longer-term continuity planning, to help maintain productivity as the world prepares to navigate a potential second wave of COVID-19 in the fall of 2020.

From reimagining lab design and leveraging technology, to improving work-from-home strategies, now is the time to prepare for near-term and future performance in the frontline field of breakthrough drug development.

Short-term plan: three keys to re-opening labs safely and effectively

It will take more than the flip of a switch to safely resume work in a facility that has been closed or restricted. For starters, executives must consider the many variables in federal, state, and county reopening guidelines. Amid localized physical distancing requirements, they will need to find novel ways to keep up with ongoing operations, R&D, and capital projects.

But perhaps the most pressing consideration is how to balance the priorities of continuing scientific work with mitigating risk to teams. What is the balance of risk versus reward for re-entry and re-staffing?

Fortunately, the life sciences industry’s knack for maintaining robust health, safety, security, and regulatory compliance should help smooth the transition to pandemic and post-pandemic protocols. The industry’s relatively early adoption of data-driven insights should also play a supporting role in determining the best way forward.

The following are three ways industry leaders can rethink the life sciences work environment, especially labs, in the near term:

Work collaboratively to ramp up existing quality and safety protocols.

  The good news is that the pharmaceutical industry is better prepared than most other sectors to facilitate rigorous safety measures. Prior to the pandemic, laboratory leaders were already well-versed in achieving compliance with strict guidelines for hygiene, like handwashing and wearing personal protective equipment (PPE).

Still, more preparation will be needed to make labs COVID-19-ready. Every facility will need to develop new standard operating procedures and policies to better protect physical safety and security. And more than any one departmental focus, safeguarding facilities will become an all-hands-on-deck call.

Janitorial strategy, for starters, will need a major refresh. Cleaning crews will need to step up their game and scour facilities to standard multiple times each day, rather than each week. Facilities teams will also need to double down on air quality as well as heating, ventilation, and air conditioning (HVAC) operations. How can they keep things running efficiently, while also limiting contagion risk?

Human resources teams, on the other hand, may be tasked with coordinating temperature checks at entry points, and a plan of action for employees who run a temperature—or more challenging yet, are diagnosed with COVID-19. They will also need to work with leaders across the proverbial hall to develop new staff training and communications programs to help staff adjust to new processes, as well as a means for monitoring and confirming individual and team compliance.

Power up social distancing and space planning with data-driven insights.  

Every scientist knows that effective data strategy is crucial to any research initiative’s success—and the same holds true for facility initiatives amid COVID-19. To properly safeguard employees, while optimizing the facility to the best extent possible, it pays to understand how people worked best prior to the pandemic and how requisite new adjustments will affect their productivity and engagement going forward.

So, how have researchers typically interacted with a lab space? Did they spend most time collaborating side by side on benches, before removing to areas designated for private work? How difficult and disruptive will it be to impose physical distancing requirements?Answering such questions—with the right data points and predictive analytics—can help determine new protocols that bring together the best of the pre-pandemic ways of collaborating, with the new normal of hygienic distancing.

For example, detailed utilization rate data can help inform new safety standards and inform criteria for physical distancing floorplans. By virtue of going beyond guesswork to reflect real-world employee space demand and usage, such data can help leaders plan space usage to support both epidemiological standards and employee comfort levels. It can also empower executives to consider whether more drastic measures are called for, such as leasing more space under flexible terms.

Harness technology to optimize the COVID-19-ready workplace.  

Making sure all systems are a go, and remain that way, is a tall task anytime, but particularly so with the all-new standards needed in the face of a pandemic. A variety of real estate and facility technology tools can help companies monitor both employee and facility performance, to support health and performance alike.

For instance, space utilization tools like real-time WiFi login, security badging, and heat or motion sensors can help ensure personnel are adhering to COVID-19 capacity limits. Occupancy planning data from these same tools can also enable leaders to more accurately assess future needs, potentially adding up to meaningful savings over time.

On the facility technology side, wireless equipment sensors can help monitor and manage indoor air quality in real time, supporting health, well-being, and productivity goals. Moreover, smart building systems can automatically self-adjust to improve building efficiency and reduce energy costs—limiting the need for more engineers onsite.

Looking ahead: foster productivity remotely as well as onsite

Personnel safety is paramount. But productivity is also essential to maintaining innovation, whether employees are working at home or in the facility itself.

Unlike many other industries, where remote work has long been the norm, life sciences jobs are generally more suited to onsite work. But even prior to COVID-19, many pharmaceutical companies had been considering the potential of facilitating at least some remote work. And now, in a post-COVID-19 reality, more will likely seek to increase remote work capacity.

Their effort will be supported by the shift in recent years to integrate more data science into pharmaceutical R&D. Advances in big data and cloud computing, as well as artificial intelligence and machine learning, have been enabling pharmaceutical companies to pioneer new methods, such as quickly processing massive amounts of real-time data and even performing virtual experiments.

The resulting evolution in research has already had a direct impact on facility usage, with total space composition having begun to shift in recent years from almost entirely wet lab space to a more even mix of wet lab, flex lab, and computational science space. With a greater proportion of work now taking place in more office-like space, it is becoming easier in turn to facilitate remote work.

By giving employees the opportunity to work remotely when appropriate, companies can not only support meaningful social distancing rules, they can also enhance employee satisfaction and productivity and ultimately derive greater value from real estate.

Supporting more remote work is a prominent way for pharmaceutical real estate strategy to keep up with the race for a COVID-19 cure, but there’s another key way forward that generally gets less attention: facility operations.

Despite the fact that facilities must remain the hub of the action, their foundational systems are often under looked. Yet building and equipment maintenance processes can play a big part in the success, or disruption, of promising research initiatives.

Consider maintenance strategy, for instance. A traditional approach relies on time-consuming visual inspections and clunky, preset schedules. Next-generation predictivemaintenance, however, helps companies keep facility and production lines running smoothly with sophisticated analytical techniques to monitor performance in real time. With techniques in place, such as accelerometers and sonic listening devices, they can efficiently monitor for variations to keep equipment running longer and better, while reducing the risk of a shutdown.

As the industry persists in innovating through and beyond the era of COVID-19, the practices put in place can now help support future innovation, too—whether it takes place at home, in a wet lab, or a ‘moist’ lab somewhere in between.

A holistic view of the post-COVID-19 industry landscape

COVID-19 has upended how and where people work in every industry—with especially unique implications for the life sciences. Pharmaceutical companies must consider not only how to protect their people and communities by practicing social distancing, but also by advancing breakthrough therapies and diagnostics. And they must do so against a backdrop of mounting economic uncertainty.

There is no one simple path forward. From leveraging data in space planning to facilitating prudent re-opening, to fostering remote working as well as preventive maintenance strategies to spark productivity independent of location, pharmaceutical leaders should investigate how to best support people and productivity alike. A holistic approach to real estate and facility strategy will be key.

The industry, and the global community as a whole, must move forward amidst historical uncertainty. It may be overwhelming, and yet, some of history’s most challenging times have also inspired humanity’s greatest innovation. It is in this spirit that the life sciences sector will help not only provide grounding for the US economy, but also help end the pandemic.

1. S. Black, “COVID-19 Shuts Down Research Labs as Concern Grows Among Scientists,” 


2. R. Mullin, “COVID-19 is Reshaping the Pharmaceutical Supply Chain,” C&EN 98 (16) (2020).

, is division president, Industries, JLL.

To whom correspondence should be addressed.

Articles

How real estate can accelerate productivity as life sciences companies prioritize COVID-19 therapeutics, vaccines, and new diagnostics R&D amidst new guidelines.

Labs on the Frontlines: Balancing Re-Entry and the Race to a COVID-19 Cure

Distant destinations have never looked better for multinational and middle market life-sciences companies. While multinationals fill their innovation pipelines in North America, branded and generic-drug producers alike are finding fertile ground for growth in new markets in Asia and Latin America.
	
	Although economic growth has slowed in countries such as China and Brazil, demographic trends continue in the biopharmaceutical sector’s favor. Aging populations, increased healthcare spending, and growing incomes are creating potential new customers in such countries as China, Russia, and Brazil, with rising rates of chronic illness associated with affluence. Global healthcare spending is projected to grow by an average of 5.3% annually from 2014-2018, with much of the growth occurring in Asia (1).

	Cost pressures are intensifying as countries seek to restrain healthcare expenditures. Facing serious margin pressure from generics, many top brands are looking to emerging markets, not only for new customers, but also for low-cost land and labor. At the same time, economic development incentives from governments such as Turkey, Mexico, and South Korea are fueling growth in facilities and infrastructure in those locations through incubators and research parks.

Top global markets and the competitive landscape


	Along with ranking the top United States life-sciences clusters, the 2015 edition of JLL’s 

report highlights global trends and countries with promising advances in economic openness, innovation, and opportunity. The following offers additional details about some global clusters to watch (

 With nearly 20 years of political stability and recent years of economic growth, Brazil has dramatically grown its middle class and per-capita healthcare expenditures. Improvements to manufacturing capabilities and processes are well under way across the country. Brazil is the top medical device producer in South America (2).

	The bulk of the Brazilian government’s investment in the sector is aimed at attracting foreign direct investment and multinational partnerships by improving intellectual property protection and technology transfer, and creating research parks and incubators. Multinational companies are concentrated in Brazil’s leading clusters of São Paulo, Minas Gerais, Rio de Janeiro, and Rio Grande do Sul, which is home to the country’s leading universities.

 China’s biosimilar expenditures could soon comprise 20% of biosimilar expenditures worldwide (2). A major driver of this trend is that few originator biological medicines are reimbursable in China, while less-costly biosimilars often are. Significant domestic competition and lengthy regulatory processes create risks for global players looking to enter the market, so many seek manufacturing partnerships with domestic biosimilar companies. Joint ventures already in place include Pfizer with Hisun; Merck with Simcere; and Focus with Lonza.

	China is also becoming a leading location for research. Once known primarily for its low-cost manufacturing, China is shifting its capabilities into more high-tech R&D functions, ramping up its life-sciences patent portfolio and making major investments in facilities and resources (see 

 to compare the number of patent approvals among the life-sciences clusters in the world). Furthermore, repatriation of highly skilled scientists trained overseas is helping companies based in China establish cost and resource advantages.

 With population growth, an increase in chronic illness, and increased spending on healthcare, India is expected to become second only to the US among the world’s largest pharmaceutical markets by 2020 in terms of volume (3). India’s contract manufacturers are highly competitive, producing more than 20% of the world’s generic medicines and vaccines. Nonetheless, large companies such as Sandoz, Pfizer, GSK, Apotex, and Teva, along with mid-tier companies such as Watson Pharma and Eisai, have begun to build their own production facilities, sometimes through subsidiaries, and other times in joint venture partnerships with domestic Indian companies.

	India has aspirations to expand its dominance in manufacturing into R&D. The state of Gujarat, in particular, has become a research hotspot, offering strong infrastructure, an R&D-driven environment and access to a large talent pool from numerous educational institutions. Numerous R&D incentives have attracted major companies, including Sun Pharma, Teva Pharmaceuticals, and Claris Lifesciences (4).

 A growing middle class is supporting development of the life-sciences industry that, historically, has been undersized relative to the population. The Indonesian government, however, has significantly increased its healthcare spending in recent years. Combined with a growing population and rising incidence of chronic disease, Indonesia is expected to see double-digit growth in pharmaceutical and medical-device sales.

	In particular, Indonesia’s medical device market is projected to grow by 15% in the near future (5). Despite weak intellectual property laws, few domestic raw materials, and regulatory obstacles to foreign investment,

	Indonesia is nonetheless an attractive manufacturing location thanks to its low land and labor costs. Furthermore, the government is working to improve manufacturing standards and lessen regulatory barriers to foreign direct investment from global life-sciences corporations.

 Israel has long been a leader in life sciences and is a well-established life-sciences destination for multinational corporations. Israel, however, is better known as a research destination than a major consumption market, given that it has a relatively small population. With its well-developed economy, Israel’s life-sciences sector is attracting attention for its burgeoning entrepreneurship culture as a hotbed of innovation--and its domestic companies have grown at the remarkable rate of more than 400% since 1996 (2).

 Mexico has traditionally been a magnet for low-cost medical product manufacturing and home to production subsidiaries of nearly all the major multinational companies. To build on this prominence, Mexico has revamped its regulatory framework to ensure GMP and boost multinational confidence in its manufacturing capabilities. Free-trade agreements with 45 countries have made the country the Latin America leader in pharmaceutical exports. Additionally, companies can operate under a Mexican shelter corporation structure and avoid legal liabilities for product problems, while still benefiting from government tax and duty abatement programs.

	Manufacturing is only part of the story; like other global markets, Mexico is working to expand its R&D capabilities in places like the state of Morelos. Morelos is investing $29 million to create a biomedicine cluster, expanding on its current 39 research institutions, robust clinical trial activity, and ongoing research (5).

 Russia’s spending on medicines has grown dramatically over the past five years and is expected to grow anywhere from 8-13% by 2020 (6). The Russian government is focused on growing domestic capabilities and limiting drug imports. Therefore, the preferred strategies for entering the Russian market are through building local facilities, acquiring local companies, or establishing joint ventures with local entities while carefully navigating political uncertainty.

	In 2015, for example, Novo Nordisk opened a $100-million insulin plant in the Kaluga region southwest of Moscow with the intentions of serving Russia and exporting products as well. India’s Lupin is acquiring Russia’s ZAO Biocom, a manufacturing company. Novartis is completing a $150-million plant near St. Petersburg, and Abbott Laboratories-active in Russia since 1978-is acquiring Russian generic-drug manufacturer Veropharm.

 In 2014, the South Korean government reinforced the country’s five-year plan to support healthcare as a strategic industry, simplify regulatory approvals, support R&D, and help its domestic life-sciences companies expand overseas. The country’s pharmaceuticals market is the 10th-largest in the world; major Korean conglomerates such as Samsung and LG are key players, along with multinational companies actively engaged in R&D collaborations and licensing agreements with domestic companies.

	In 2009, the South Korean government committed to establishing a life-sciences hub by investing $5.3 billion in the Osong Bio Valley over the next 30 years, and a high-tech medical complex in Daegu (5). Osong Bio currently hosts more than 50 domestic and international companies, six governmental institutions, and numerous universities and research centers. To attract companies to the area, Korea offers reduced or waived taxes and rent for businesses involved in developing cutting-edge technologies.

 With its strong intellectual property laws, stable and industry-supportive political structures, and mature business environment, Singapore is poised to enlarge its high-tech research sector. The country is already a major re-exporter of pharmaceuticals-but its larger vision is to be the leading biomedical hub in Asia, providing services from basic research to clinical trials, product development, manufacturing, and clinical healthcare delivery.

	Crucial steps toward this goal were the mid-1990s establishment of Tuas Biomedical Parks 1 and 2 and a more recent investment of $1 billion to develop several research institutes and the Biopolis R&D complex. Together, the investments have attracted more than 30 major global life-sciences companies and created an effective ecosystem that harnesses the benefits of economies of scale and knowledge transfer (2).

 Turkey’s “Vision 2023” plan includes the goal of becoming a global life-science and health leader (5). The government has created nearly 60 new technology and development zones, offering numerous subsidies, tax-incentive programs, facilities, and educational investments to support the biopharmaceutical sector (7).
	As a result, many multinationals have become active in Turkey. Baxter, for example, operates a joint venture with Turkey’s EczacÄ±baÅi and has invested upwards of $170 million in domestic production facilities. Recent developments include GE Healthcare Life Sciences’ new technology and training laboratory, Covidien’s $21-million medical device innovation center in Istanbul, and Recordate’s $50-million new plant.


	A theme across many global markets is the value of partnerships. Life-sciences companies are finding success when global best practices from multinational companies are combined with an increasingly sophisticated pool of domestic companies offering local market expertise backed by government support. The increased frequency of joint ventures, partnership agreements, and joint research and clinical trial initiatives reflects this rising tide of cooperation between local companies and global life-sciences corporations. Even as cooperation rises, so does competition. Time will tell which locations-and which partnerships-will best serve the needs of the world’s aging population.

World Industry Outlook: Healthcare and Pharmaceuticals

, pp. 6-7 (May, 2014), accessed Sept. 18, 2015.
	2. JLL, 2015 

, pp. 3 (2015), accessed Sept. 18, 2015.
	3. H. Kubavat, P. Miller, and F. Wang, “

Tipping the Balance: Risks and Opportunities in Biosimilars

 (Feb. 6, 2013), accessed Sept. 9, 2015.
	4. McKinsey and Company, 

India Pharma 2020: Propelling Access and Acceptance, Realizing True Potential

,  pp. 16, (2015), accessed Sept. 18, 2015.
	5. JLL, 

, pp. 118 (2014), accessed Sept. 18, 2015.
	6. J. Cronin and P. Speksnijder, “

Investment in Mexico’s Pharmaceutical and Biotech Industries

,” Mexico Health Review 2014, (March 2014), accessed Sept. 9, 2015.
	7. Association of Research-Based Pharmaceutical Companies, “

Turkey’s Pharmaceutical Sector Vision 2023 Report Summary Presentation

,” prepared by PwC, accessed Sept. 18, 2015.

Pharmaceutical Technology's Partnership Strategies in Outsourcing Supplement


	When referring to this article, please cite it as R. Humphrey, "Emerging Life-Sciences Markets: New Partnerships, New Competitors," 

Pharmaceutical Technology's Partnership Strategies in Outsourcing Supplement, 

Aging populations and increased access to healthcare translates into opportunities for biopharmaceutical companies.