Editor’s Note: This article was published in Pharmaceutical Technology Europe’s January 2024 print issue.
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European bio/pharma companies have no choice but to invest and adapt to the evolving industry needs.
At the beginning of 2023, inflation represented a significant thorn in the side of global economies and exacerbated the challenges raised by the tumultuous preceding 12 months—encompassing the tail end of the COVID-19 pandemic, the war in Ukraine, and skyrocketing energy prices. Despite inflation moving in the right (downward) direction across Europe, it is still a lingering issue for the continent and is negatively impacting European economies (1,2).
For the bio/pharma industry—an industry well known for its ability to weather economic turmoil with reasonable safety—the latest global economic challenges have raised significant concerns. In Europe, moving into 2024 there will be additional factors at play, such as an increased drive to digitalization, a focus on sustainability, and a shortage of skilled personnel, meaning that bio/pharma companies will need to adapt over the coming months.
“The pandemic, inflation, geopolitics, new therapeutic modalities, evolving ways of working, and EU [European Union] regulatory changes, have conspired to have major implications for the pharma industry,” reports Romuald Braun, managing partner, MAIN5, a European consulting firm specializing in organizational and digitally enabled change in Life Sciences.
“The most notable fallout,” Braun says, “has been rising operational complexity (e.g., the need to manage diverse product portfolios and supply chains); increasing risk around balancing global demand, supply chain disruptions, and new modalities; the need to adapt to technological changes; rising capital costs (investing in new technologies and facilities); variable cost increases (addressing inflation and supply chain challenges); and the need to seize every opportunity for savings through optimized operations.”
Editor’s Note: This article was published in Pharmaceutical Technology Europe’s January 2024 print issue.
In concurrence, Jordan Schmitting, senior research analyst, The Josh Bersin Company—research, advisory, and education on the trends, technologies, and best practices for the new world of work—confirms that the evolving geopolitical, economic, and regulatory conditions have put European pharma companies’ supply chains and profit margins under pressure throughout 2023.
“However,” Schmitting adds, “digitization and biotechnology were perhaps the most defining trends within the industry, shaping the future of not only how treatments are discovered, developed, manufactured, and distributed, but the types of treatments being explored.”
An increased integration of digital technologies is being seen within the bio/pharma industry, agrees Braun. “This [integration] includes the use of AI [artificial intelligence], big data analytics, and digital health platforms to improve efficiency and outcomes,” he says. “Digital transformation now extends to adoption of ‘Generative AI’, as companies strive to be more data and insight driven, moving away from dependence on static documents.”
Furthermore, the use of cloud-based systems to ease information exchange and data management will be seen, Braun continues. “Breaking down data silos is essential to enable advanced analytics and faster decision-making—as long as data governance and data quality are prioritized so that teams can trust the insights being surfaced,” he states.
Along with changes in data collection, however, comes an increased focus on data privacy and the general data protection regulation, adds Kate Coleman, vice president of Quality and Compliance at Arriello—a consultancy and solutions provider of risk management and compliance services to the pharma industry. “Again, these topics were raised repeatedly in 2023, not just in the context of medicine but also in the broader social context, and the importance of data protection is a conversation that will continue into 2024,” she notes.
“AI has gathered pace and is a consistent talking point as it is now recognized as a powerful tool in many areas across the pharmaceutical industry including drug development, writing, data analysis, translations, and pharmacovigilance activity to name a few,” remarks Coleman. “AI has the potential to radically change how we do things in the industry, and everyone will need to increase their understanding of this powerful technology to understand both its strengths and weaknesses.”
For Beena Wood, senior vice president of Safety and Medical, ArisGlobal—the creator of the LifeSphere technology platform and provider of global patient treatment solutions—there has been crucial technological innovation that is now providing all bio/pharma companies access to AI and machine learning (ML). “AI/ML can now be applied to a broad range of connected data—including a broader range of standardized, reliable real‑world data—to enable advanced analytics and powerful, timely insights,” she says. “This will inspire new treatment/care innovation with the interests of patients right at the heart.”
Patient-centricity will become an intense focus for bio/pharma companies in 2024 because of several converging factors, according to Wood. “First, the status quo is being challenged increasingly by empowered patients who now know and expect more,” she specifies. “Second, [there is] accelerated delivery of personalized therapies, geared to the needs of smaller patient populations and individuals. Meanwhile, regulatory mandates are now prioritizing patient concerns and considerations right from development phase and throughout the treatment lifecycle.”
Braun concurs that patient centricity will be a huge topic for companies moving forward and points out that patients’ needs and outcomes will remain important for companies. “Personalized medicine, patient engagement, and real-world evidence will guide decision-making,” he states.
“The increased focus on personalized medicine, gene therapies, and other advanced therapeutics combined with discussions on treatment costs have raised questions that will need to be considered for the viability of future innovative pharmaceutical products,” emphasizes Coleman. “Many high-profile agreements have been reported in 2023, and the topic of cost benefit analysis for innovative therapies will be ongoing in the next year.”
Another focus for bio/pharma companies in the future will be embracing more sustainable practices, something that is being expected from customers and patients. “Companies will be increasingly investing in green initiatives, implementing eco-friendly manufacturing practices, and adopting sustainable packaging solutions,” says Preeya Beczek, principal consultant at Beczek.com, a regulatory affairs and compliance consultancy.
“Increasing efforts will need to be made to reduce waste generation, minimize water consumption, and decrease greenhouse gas emissions,” Beczek continues. “These changes will need to be measurable so that achievements against targets can be demonstrated through key performance indicators over time.”
As the climate crisis is becoming more apparent to the world, an issue that will only be more heightened in the coming years, the bio/pharma industry is finding itself in a difficult position, states Coleman. Simply due to the nature of the bio/pharma industry—manufacturing and distributing products around the world—it is a major contributor to the global carbon footprint, she stresses.
“The pharma industry is also highly regulated, which means significant change is neither easy nor fast,” Coleman says. “To really combat the impact that the pharma industry has on the environment, the risks and impacts from the industry need to be fully identified across all activities from sourcing of raw materials, shipment, transport, manufacture, distribution, and management of waste to identify a full and holistic plan for change that can reduce the impact on the environment and on the planet. When mitigation actions are identified that will improve the carbon footprint, such as reverting to stainless steel rather than single use plastics, the regulators will need to assist companies with balancing the risks between impact on patients, impact on employees, and impact on the environment as a whole.”
There are numerous environmental, social, and corporate governance (ESG) challenges facing the bio/pharma industry, confirms Braun. “These [challenges] include reducing carbon footprint and promoting sustainable practices; ensuring ethical sourcing and minimizing environmental impact across the supply chain; balancing profit with patient needs to ensure patient access and affordability; more responsible drug development (ethical research and innovation); diversity and inclusion considerations, promoting a diverse workforce and equitable practices,” he notes.
“Moreover, there will be changes to what needs to be reported on, and how, under the EU’s Corporate Sustainability Reporting Directive (CSRD),” Braun stresses. “From 2024, almost 50,000 companies are subject to mandatory sustainability reporting, including non-EU companies with subsidiaries operating within the EU or listed on EU-regulated markets.”
An increasing role of technology and innovation, such as AI, robotics, and automated processes, combined with newer therapeutic modalities and personalized medicines in the bio/pharma industry is changing the skills and expertise required, emphasizes Coleman. “For example, roles such as the Qualified Person have changed significantly when considering ATMPs [advanced therapy medicinal products] where the QC [quality control] tests and timelines for batch review and release to market have been either significantly reduced or removed completely,” she says.
Schmitting also alludes to a misalignment of roles and skills across all talent segments of the bio/pharma industry caused by rapid evolution of the industry’s requirements as a result of trends like AI, automation, digitization, and big data. “These forces are changing the nature of work not only in manufacturing and distribution, but across the entire pharma value chain, including R&D,” she says. “Take AI-driven platforms, for example, which is a research innovation fundamentally changing the methods and timescale of specialized therapy discovery and development.”
However, the technological innovation being seen within the bio/pharma industry could also help to attract the younger generation to the sector, Beczek remarks. The skills gained with a more technologically advanced bio/pharma industry can also be transferrable should the potential employee wish to change their role, she adds. “Harnessing the tech-savvy power of this younger generation could help the industry see new possibilities and pathways to drive change forward,” Beczek states.
Additionally, as biologicals and molecular technologies become more present within industry, the skillsets required to deal with these are changing and are not necessarily easily acquired, Braun stresses. To manage this issue, Braun anticipates there will be an increase in M&A activity and a rise in the use of external services to plug gaps.
“Lower-skill labour in production facilities is a challenge too, not least as 24/7 continuous production increases,” Braun says. “To address these shortages and contain costs, pharma companies will need to continue streamlining processes, harnessing automation and applying AI as appropriate.”
Potential options for bio/pharma companies to deal with the skills shortage is to collaborate with academic institutions, industry associations, and research centres to pool talent, Braun continues. To attract and retain skilled professionals, companies should develop a more compelling employer value proposition and offer continuous learning opportunities for existing employees, such as upskilling in digital technologies, and so forth, he adds.
Beczek believes in a two-pronged approach to tackle the skills shortage. “Start at the higher education level and actively recruit seasoned medical experts in the key therapeutic areas to join innovative companies as clinical development leaders, medical experts to drive product strategy at a disease level,” she explains.
There also needs to be different pathways offered in addition to the standard three- to four-year full-time qualifications pursued at an academic institution, according to Beczek. “There are a handful of settings that offer young adults a life sciences path via apprenticeships with an opportunity to balance hands-on work and study including a salary. This is the way forward,” she says.
“The academic institutions do appear to recognize the change in the industry and proactive measures have been taken at this level to ensure graduates are more equipped to deal with the demands of the reality of working in a high technology environment,” specifies Coleman. “However, one element that this cohort lack is the practical experience needed to develop into quality resources that can support this ever-changing industry.”
Moving into 2024, Braun expects that bio/pharma companies will continue to be cost-conscious and the industry transformation with new modalities gaining prominence will persist. “Pharma companies will need to invest in R&D to harness these [therapeutic] innovations effectively,” he says.
Adoption of digital technologies will accelerate, and companies will need to invest in digital capabilities to keep up with opportunities, Braun adds. “AI/ML will move from a prototyping or pilot phase towards larger use cases, presenting new challenges for validation and data integrity,” he says. “As the pace of change accelerates, IT must be much closer to the business than previously.”
There is heightened pressure on bio/pharma companies to control costs, maximize the value of investments, and optimize their strategic focus, while also maintaining the highest levels of patient safety and stakeholder confidence, adds Wood. “In pharmacovigilance and agency reporting, large language models/ChatGPT-like Generative AI tools are poised to deliver up to 80% productivity gains for certain work processes, compared with 20–50% improvements with previous-generation technologies,” she states. “No company can afford to let that kind of opportunity pass them by. The appetite is there, and proof-of-concepts are well underway now.”
However, with the various therapeutic and technological advancements, companies will also need to ensure they keep abreast of regulatory updates. “The EU’s regulatory changes will continue to impact the industry. Companies must stay informed about evolving regulations related to clinical trials, medical devices, and AI applications. Compliance and adaptation are key,” Braun reports.
Coleman also points to the regulatory landscape, which will be a focus in 2024 as the existing pharmaceutical regulation will be replaced. “The main objectives of the revision are aligned with the points mentioned previously, and it is intended that the revised EU pharmaceutical regulation will address innovation and technological advancements in the industry, align manufacturing of medicinal products with the European Green Deal related to climate change, and make medicines in Europe more affordable, accessible, and available to patients that need them,” she summarizes. “The changes are intended to make the industry and its regulation more agile, and more appropriate for the world we live in now.”
The regulatory updates are aligned with the rise in biotech innovation, drive to reduce time-to-market, and increased focus on patient needs, meaning that the bio/pharma industry has no choice but to change the way it operates, asserts Wood. “Leading players have realized that if they want different outcomes, they can’t keep doing things the way they’ve always done,” she says. “They need to be smarter, and more informed by the latest data, if they want to honour their commitment to patient centricity, and to safe, agile innovation.
All the trends discussed have a massive impact on the bio/pharma industry because of the many moving parts involved, adds Beczek. “The crucial part is that teams will have to increasingly work across functions not just in R&D but also closely with commercial, medical affairs, in country affiliates, with industry experts and healthcare professionals, expanding the end-to-end value chain of strategy and operations,” she concludes.
1. Guerrera, F. Europe Faces Dirtier Inflation Fight than US. Reuters, 6 Sep. 2023.
2. Smith-Meyer, B. High Interest Rates Have Hit Growth More than Expected, EU Says. Politico, 15 Nov. 2023.
Felicity Thomas is the European/senior editor for Pharmaceutical Technology Group.
Pharmaceutical Technology Europe
Vol. 36, No. 1
Pages: 10–12, 16
When referring to this article, please cite it as Thomas, F. Bridging Gaps and Investing in Change. Pharmaceutical Technology Europe, 2023, 36 (1), 10–12, 16.