CxOs challenges for 2023 in the Life Sciences sector
In this article, we'll explore some of the key trends that will shape the life sciences industry for the next years to come (2023 and beyond). We examined how companies are responding to these new needs, and what CxOs can do to stay competitive as these trends develop in every business function.
The life sciences sector is under perpetual transformation. When we published our first article in November 2017 (see the article here), the need for innovation, digitalization and AI were impacting only support functions such as finance and HR.
The COVID-19 pandemic accelerated the digital conversion, companies largely adopting the cloud but its benefits for organizations remain uncertain. If it wasn’t for COVID-19, many companies probably wouldn’t have converted to cloud.
Companies are evolving slowly to the digital era. But why?
A more holistic approach is needed by setting long-term strategic digital objectives across business and core functions.
Internal metrics to benchmark digitalization investments are a must. Knowing the Business Value and ROI requires to assess and identify where digital capabilities could be scaled more effectively.
What is next? Focus on Patients, (lots of) Data, Predictivity, Agility and Resilience!
To be attractive to investors and remain competitive, companies must scale digitalization. The objective is not anymore to reach “agility” it is to meet the demand of regulators and patients.
Regulators require companies to use data more widely and efficiently throughout the lifecycle of a medicine, from preclinical development, through the clinical trial process, and into real world.
Recent studies demonstrated that hybrid clinical trial models, mixing digital and face-to-face interactions, highly increase patient engagement and focus. It allows to better understand patient preferences during the evaluation process and make clinical development and regulation more cost-effective.
On the strategic side, the ability to detect and execute alternative scenarios to disruptive events and business opportunities, will be key. Companies cannot rely on one scenario and one-forecast model.
CxOs must focus on offsetting higher costs by exploring different strategies and new paths for liquidity and growth while implementing actionable plans to increase return on pharmaceutical innovation (RPI) and productivity.
Every business function is required to be transparent and participate in producing insights to enhance the patient experience, increase the value chain, from molecule development to commercialization.
The following is our review about the 8 areas of what life sciences companies need to focus as they prepare for 2023 and beyond.
1) Patient Experience
The strategic priority is to develop patient services and cover more than access to therapy and engagement such as funding.
Investments in patient-centric digital capabilities to build around patience experience, will help anticipate needs and expectations thanks to predictive measures built on the analysis of patients’ data.
2) Drug Development
To stay ahead of the curve, companies must focus on reducing costs to bring an asset to the market to improve the return on pharmaceutical innovation (RPI). Hybrid clinical trial models highly contribute to cut costs, while accelerating completion of the trial and supports patients’ engagement.
Another option to improve RPI is to co-develop assets. Novel therapeutic platforms can accelerate development of priority therapeutic areas (rare diseases and gene editing technologies), but they remain expensive and complex to develop.
Collaborations and scientific partnerships are a great way to reduce costs and improve performances.
The rise of AI and machine learning tools to analyze data also contribute to improve trial designs, including recruitment of more diverse patients, which is also material for ESG (see point 5 below), and addresses regulators’ requirements in terms of Real-world data (RWD) and Real-world evidence (RWE) data.
Finally, data management has become increasingly complex as more stakeholders become involved in clinical trials and other aspects of R&D. This creates challenges for companies trying to make sense of the data they collect while also protecting patient privacy rights under GDPR regulations.
3) Regulatory (excluding local policies changes).
Companies should accelerate the integration of science and technology in medicines development.
Regulators require more evidence which cannot all come from clinical trials.
Thanks to digital collaboration, demonstrating real life value, starting from R&D and thru increase patient involvement, will participate to gathering more collaborative evidence generation for better scientific quality of evaluations by the regulators.
Enabling collaboration with healthcare systems as early as possible, by considering rolling reviews which can be considered outside of public health emergency.
4) Supply Chain
Supply chain disruptions will reach levels never seen before in 2023 thus secure multi-sourcing capabilities is key as well as delivering products on time will keep high customers confidence and trust.
The procurement function will become central to detect and prevent disruptions:
actively manage supply chain to become smarter and more responsive,
conduct risk assessments on suppliers and shorten distances by regionalizing as much as possible,
balancing the need to increase safety stock on critical products, while not penalizing working capital.
5) Environmental, Social and Governance (ESG)
Life Science is also concerned by ESG to transition to a more sustainable way to making medicines across the value chain; reduce waste and greenhouse gas emissions (GHG).
Furthermore, PAYERS are increasing pressure in drugs pricing. Innovation shall be used to reduce costs and provide a wider access to medicines and treatment to patients.
Diversity: in clinical trials was well as in companies’ leadership.
Companies must integrate ESG goals as part of corporate strategy and develop transparent metrics which will allow 3rd parties to follow improvements.
Companies mastering ESG have a better reputation and it also positively impacts employees retention.
The economic climate and inflation are putting finance teams under pressure.
The challenge to keep costs under control, while dealing with rising interests, increasing energy costs and higher working capital require accuracy in forecasting and the ability to re-forecast and plan multiple scenarios in a couple of days. This requires digital tools capable to handle financial and non-financial data.
Finance and tax teams are also key stakeholders for financing options: by supporting due-diligence processes in technology and research collaborations, M&A and IPO-readiness as well as licensing deals.
7) Human Resources
Life Science companies must outsmart other sectors to attract data science and digital people which is a challenge: digitally native organizations do not have legacy systems and are generally more agile, with a trendier mindset, than traditional life science companies.
Human Resources should orientate their strategy looking to create value for people and upskill digital and shift organizational hierarchy to a “network” approach.
Hierarchies are for corporate reports, people collaborate in networks. Build cross functional taskforces!
People are smart: it is why companies should turn managers into leaders and mentors. People need trust and empathy, not surveillance.
Finally, external contributors (consultants, interim managers) could bring missing skills and mentoring, experience, and diversity, while challenging internal views.
8) Information Technology
Geopolitical uncertainty could lead to increased cyberthreats. Employees are likely to be targeted so proactive communication on risks with stakeholders is key. Reinforcing awareness fortifies defenses and keeping incidents and crisis procedures up to date are a must.
It is also important that companies share information about attacks with the industry and authorities as it will help prevent future attacks.
On the cloud management side, increased demands of laboratories and scientists for data storage and access, will require to have a structure that is organized and secure.
Finally, similarly to R&D function, data Integrity and management, privacy and security under GDPR regulations need to be reinforced.
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You can also take part to our survey on the State of Digitalization in the LifeSciences SMEs by clicking here: https://s1ykgeqgiz1.typeform.com/to/q9c6FKoP
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