Editor’s Note: This article was published in Pharmaceutical Technology Europe’s January 2023 print issue.
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Bio/pharma has evolved and adapted to a variety of challenges in 2022, but what might be on the cards for the industry in 2023?
The bio/pharmaceutical industry has made it through 2022—a year that started off with the unrelenting COVID-19 pandemic, continued with Russia’s invasion of Ukraine, and culminated in global economic struggles—evolving and adapting to each difficulty, reasonably unscathed. However, as the challenges and opportunities of next year start cresting on the horizon, the bio/pharma industry must look to bolster operations to ensure it can weather the forthcoming storms and reap the potential benefits of change appropriately.
Looking back over the year, Adam Sherlock, CEO of Rephine (a good manufacturing practice [GMP] compliance specialist company), remarks on the continual evolution of the industry, which has experienced an increased focus on digital health and broadening uses of artificial intelligence (AI) and the progressive shift of many traditional companies towards biological products. However, he also notes that there have been persistent issues also, compounded by global disruptions.
The bio/pharma supply chain has continued to experience problems in 2022, Sherlock continues. “As in many other areas, [these issues have been] compounded by the war in Ukraine and the remaining COVID restrictions in China, which as well as physically disrupting many supply chains are dramatically increasing transport costs and routes,” he says. “In some cases, this [disruption] has led to drug shortages, which, added to existing pricing policies in certain European countries, is influencing supply preferences to the detriment of some markets.”
Editor’s Note: This article was published in Pharmaceutical Technology Europe’s January 2023 print issue.
“Stabilizing the supply chains will not be a quick feat, and cost and efficiency are slated to take an even more prominent position in companies’ plans [in the future],” forecasts James Kelleher, founder and CEO of Generis—a company that specializes in content and information management systems.
Additionally, the complexity of the bio/pharma industry’s current supply chains can be problematic when there is a break or alteration in one or several of the links of the chain, requiring reorganization, Sherlock emphasizes. “The complexities of each stage of the lifecycle of a product create a need for highly specialized ‘one-stop shops’ for services, spanning regulatory, analytical, supply chain control, and in product terms covering biological, intermediates, and so forth,” he states.
“On top of continued challenges for the supply chain, [industry has seen] the coming into force of several regulations,” Kelleher asserts. “Companies are keeping their head above water with new expectations of speed and efficiency that came out of the pandemic, which requires a broad review of processes, the downside of which can be further delays in delivering visible progress to management in meeting those expectations.”
An obvious regulatory change in Europe, set to happen in 2023 after some delays, is that of the submission process for the identification of medicinal products (IDMP), stresses Kelleher, who believes that the requirements of these standards will add pressure on technology companies to work directly with healthcare authorities. “When you think about it, the real industry requirements are pretty much driven by these authorities, so the expectation that solutions are developed in absolute accordance with those [bodies] will only grow,” he says.
This collaborative effort is already being seen with certain data exchange/gateway mechanisms across regulatory and safety applications such as the E2B (R3) standard, remarks Kelleher (1). “The ongoing journey to standardization on more aspects of submission and data exchange will continue to have an impact,” he notes.
Ian Crone, business unit director Europe—fme Life Sciences, which provides business and technology services, points out that the web-based human variations electronic application form (eAF) for centrally authorized products (CAPs) has been available for use since 4 Nov. 2022 on the European Medicines Agency’s (EMA’s) new product lifecycle management (PLM) portal. “The formal transition period will start after the anticipated March 2023 release when nationally authorized products (NAPs) features will be added to the form,” he confirms. “The current interactive PDF eAF will remain available until the end of the transition period.”
Within five years, Crone specifies that bio/pharma companies should have a solution implemented within their organization that can provide a streamlined approach across all stages of the product development life cycle. “Meaning that IDMP data, RIM [regulatory information management] data and eCTD [common technical document in electronic format] (submission) should be managed together as required by EMA guidelines; managing and tracking of data should go together with submission,” he says.
A potential weak point within the bio/pharma industry for Crone is actually the management of labelling documents. “I expect that software vendors will introduce industry solutions that will assess, revise, and track labelling changes,” he states.
“The process of revising the guidelines and regulations is ongoing,” emphasizes Sherlock. “This revision is bringing important challenges for the industry as it moves away from the positive checklist of must-have measures and focuses regulations on concrete solutions arising from the knowledge of processes and technologies, and risk analysis, to fine-tune what needs to be done to ensure the quality of medicines.”
And, of course, regulations are not going anywhere, Kelleher asserts. “So, companies have no choice but to adapt,” he says. As discussed earlier, submissions to regulatory bodies are undergoing change through PLM and IDMP for example, which will be happening over the next six to 12 months, Kelleher adds. “This [change to submissions] means an additional challenge in improving processes to meet heightened expectations around efficiency, which were probably not realistic via traditional ways of working; and learning new processes and trying to merge those into existing improvements,” he says.
“In the area of digital solutions for regulatory operations, the industry is starting the transition from a content to a data-centric model,” reveals Renato Rjavec, director of Product Management, Amplexor Life Sciences—a global provider of regulatory, quality, and safety software solutions. “This means that regulatory data [are] becoming an asset which is enabling not just data submissions but also data-driven content and processes management.”
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A key driver for this shift has been the product data submission requirements related to IDMP, Rjavec continues. “The progress on the overall IDMP implementation in Europe has been so watered down that the industry now seems to take the lead in recognizing that the benefits of data-centric approach go far beyond compliance. Quality and operational efficiency seem to be the most impactful areas,” he says. “This [understanding] is also driving implementation of holistic RIM platforms which bring end-to-end connectivity to regulatory affairs and beyond.”
“Many biopharmaceutical functions have spent the last decade modernizing their base technologies, most often in a cloud/software as a service environment platform that brings foundational benefit to individual functions,” states Steve Gens managing partner, Gens & Associates—a global life sciences advisory and benchmarking firm focused on the regulatory ecosystem.
Currently, the industry is in the early stages of its ‘data connectivity’ era where critical data from multiple functions are being slowly connected, explains Gens. Internal productivity and external regulatory requirements are both driving this data connectivity within industry, he adds, which “requires a clear cross functional digitization strategy and focus on cross-functional data governance, master data management, and ensuring all data from these various authoritative systems [are] at the same high level.”
The COVID-19 pandemic has also accelerated adoption of digitalization within the bio/pharma industry, Gens specifies. Referring to the COVID-19 Regulatory Impact Studies that were performed by Gens & Associates in 2020 and 2022 (2,3), Gens reveals that many companies with pandemic-related products, when compared with those that did not have COVID-19 products, actually accelerated their digitization and system modernization plans, mainly to reduce the time from clinical development to patient product access without sacrificing quality.
“Digitalization has indeed experienced a significant boost because of the pandemic, particularly with regard to tools providing an alternative to traditional business relationships—collaborative tools, remote audits, virtual meetings,” confirms Sherlock. “The use [of these tools] has been consolidated now and will remain to a large degree.”
However, dramatic change in other areas, such as digital health, medical devices, remote diagnosis, real-world evidence/data, communication with suppliers, and control of the supply chain, is also being seen, Sherlock adds. “It seems clear that [digitalization] is the direction being taken towards healthcare now, and we can expect to see all kinds of further developments. One of the fastest-growing areas here is AI; we will see many new applications of this in the healthcare and pharma industry,” he says.
When done correctly, digitalization is a big enabler that has the potential to make companies more agile and resilient, asserts Kelleher. “The actual adoption of cross-functional platforms for managing content and data, rather than armchair appreciation of this concept, has already been unprecedented. Companies are engaged in a digital ‘arms race’ to ensure they can capitalize on reaction time and efficiency over the coming five years,” he says. “Digitization of the ‘core’ aspects of managing content and data has become a commodity now, and fairly standard. The next stage in the evolution is to link all these capabilities via business process management and unified structured data/information lakes, and to use this seamlessly inter-connected scenario to enable many more robotic processes and automation use cases that are not possible when data and content remain separate.”
Given the fact that the COVID crisis remains apparent for now, certainly in China, and that the global economy is experiencing high inflation, pressure will be felt on manufacturing margins, particularly for generics manufacturers, Sherlock stresses. “Companies with traditional quality and manufacturing management processes will need to implement immediate and important changes to improve efficiency,” he says.
Kelleher points to reshoring of manufacturing as a further increasing trend thanks to the pandemic and economics, with some companies relocating their manufacturing operations from Asia to European options, such as Spain and Portugal. “Companies in all industries are learning that keeping your operations geographically close—despite the increased [outlay] cost—drastically reduces risk, supply chain cost, and costs driven by rapidly changing geopolitics,” he notes. “Fundamentally, when the geopolitical and economic outlook are positive, companies look to globalization for economic savings, but when the outlooks are negative, they operate a form of ‘protectionism’ over their business, partners, and suppliers.”
In light of this ‘protectionism’, Kelleher points out that many bio/pharma companies will also seek to bring more processes in-house, impacting the outsources services market too. “After all, [bio/pharma companies] should now have platforms that allow low-code, rapid implementation of new processes,” he says. “In this case, demand will increase for specialized knowledge, while more general processes will be automated or reassigned.”
Furthermore, investment into biologics manufacturing projects has been witnessed in recent years, especially through acquisitions, Sherlock adds. “The pressure on the margins of generics-focused companies is influencing this shift to other types of investments. Companies that are not large enough to realign in this way will either have to implement intensive changes to how they operate now, to gain efficiency, or wait to be bought out by larger generics groups,” he affirms.
As a result of the market pause, an outcome of the COVID-19 pandemic, and with smaller companies being forced to navigate choppy fiscal waters, Kelleher believes that M&A opportunities should be opening up again once more in 2023 and beyond. “The drive for cost savings, particularly with the current economic climate declining, should continue to fuel the appetite for M&A—although values may be affected,” he says.
“This activity may not only be about purchasing additional lines/areas of business, but more about acquiring talent and processes,” Kelleher continues. “As noted earlier, if you want to rapidly scale your abilities to perform processes that were previously performed on a different continent, but don’t necessarily want to pay for the number of resources you were previously relying on for outsourcing, then you are left with the option of acquiring smaller but highly efficient companies with strong subject matter expertise, and swallowing the cost—to reduce risk, reduce supply chain cost, and increase domestic or near-shore capabilities.”
For Sherlock, there will be further evolution and consolidation of changes in the industry that began several years ago. “On the one hand, the decreasing number of companies of generic products [will continue], with dwindling profit margins and the need of increasing productivity and reducing costs,” he summarizes. “On the other hand, [there will be an] increasing role of biologic products, and the need for huge investments for the development and launch of new products here, leading to M&A—until we end up with a small number of generic[-drug] companies with large production capacities and optimized costs; and powerful groups with sufficient financial muscle to cover the costs of R&D of new products—most of them in the biotech area.”
1. ICH. E2B(R3) Data Elements and Message Specification. Version 5.02 (2016).
2. Gens & Associates. 2020 COVID-19 Regulatory Impact Survey Results Whitepaper. Whitepaper, 8 Feb. 2021.
3. Gens & Associates. 2022 COVID-19 Regulatory Impact Follow-up Survey Whitepaper (Summer 2022). Whitepaper, 31 Aug. 2022.
Felicity Thomas is the European/senior editor for Pharmaceutical Technology Group.
Pharmaceutical Technology Europe
Vol. 35, No. 1
Pages: 9–11, 18
When referring to this article, please cite it as F. Thomas, “Opening Up Opportunities in 2023,” Pharmaceutical Technology Europe 35 (1) 2023.