The impact of COVID-19 on life sciences industry

Impact of COVID-19 on life sciences

The SARS-CoV-2 virus, which emerged as an unknown pneumonia-like disease in December 2019, gained the status of a global health crisis, by March 2020. Enforced lockdowns caused temporary shutdown of labs and production facilities. Next, the industry’s attention was shifted towards developing a pandemic cure, which in turn dampened the demand for non-COVID-19 products and trials. Ultimately, due to the impact of COVID-19 on life sciences industry, companies were compelled to find ways to respond to emerging challenges and adapt to the new normal.

In this light, here’s a look at the five major developments that occurred in the life sciences industry over the past six months.

1.   Reorganization of the supply chain

COVID-19 has revealed supply chain vulnerabilities due to over-reliance on outsourcing Active Pharmaceutical Ingredients (APIs) from other countries, which are prone to disruptions. India and China, the two largest producers of APIs were severely affected by the pandemic. Resulting regulations put a stop to  API exports, which put the entire industry in jeopardy.

To deal with this challenge, governments provided incentives to encourage pharma and biotech companies to take part in supply chain repatriation. For instance, Association for Accessible Medicines, proposed several incentives to facilitate repatriation of manufacturing to the US. Local sourcing of APIs mitigated the issue of shortage of materials due to export restrictions in Asian countries.

Where risk mitigation policies were concerned, shifting production locations closer to end markets or low-risk countries, emerged  as another solution to smoothen the production process. The pandemic has also led to industry leaders towards a more patient-centric supply chain due to the increased adoption of digital health systems.

2.   Regulatory reforms

In response to the impact of COVID-19 on life sciences, the UK, US, and EU regulators have revised, updated, and formed guidelines, to support research and development processes for a cure. Organizations such as the UK Medicines and Healthcare Regulatory Agency (MHRA), the European Medicines Agency (EMA), and the US Food and Drug Administration (FDA), have set guidelines on how to proceed with clinical trials and manage them during the present situation.

Observing recent regulatory updates, priority is currently being given to COVID-19 clinical trials and medical devices. Regulatory organizations are also granting emergency use authorizations (EUAs) and fast-track approvals to devices with high demand, such as COVID-19 testing kits, antibody testing kits, and ventilators.

Regulations have also been made flexible for facilitating COVID-19 trials. For instance, the EMA has adopted a new initiative that allows COVID-19 trials temporary exemption from certain rules, in order to speed up the process.

3.   Creative solutions to overcome demand surge

As the pandemic warrants  certain safety measures , there has been a sudden demand spike for hygiene products, personal and protective equipment (PPE) kits, as well as certain medical devices such as ventilators.

To cope with supply shortage, companies have been fostering partnerships and manufacturing deals across the industry. For instance, Medtronic has partnered with Foxconn to manufacture ventilators, while Ford has been working with 3M to produce other PPEs.

There have also been regulatory changes enforced to support quicker approval of new manufacturing lines or sites for companies working on pandemic related products. The EMA has even developed a single-point-of-contact system for pharma and biotech companies to report shortage of COVID-19 drugs and treatments.

Industry leaders are also coming up with creative ways to deal with the lack of raw materials. For example, certain Italian engineers are turning snorkeling masks into ventilators using 3D printing.

4.   Pandemic-centred collaborations and government initiatives

COVID-19 has put significant financial strain on the life sciences industry. Due to supply chain disruptions, companies have had to undertake additional production costs. Meanwhile, healthcare providers arefacing  a revenue decline, due to the reduced number of non-COVID-19 medical procedures.

To help ease this strain, governments are allocating stimulus packages and financial support to the industry. For example, the US government has announced a USD 2T stimulus package to support healthcare workers.

Companies across the globe have united their efforts to  eradicate the virus. For instance, several EU countries and groups have come together with the World Health Organization (WHO) for a USD 8B vaccine initiative. Novartis has also partnered with a consortium of life sciences companies to catalyze the development, manufacturing, and delivery of pandemic treatments.

5.   Accelerated digital transformation and technology adoption

With the pandemic enforcing lockdowns and social distancing , the world is now becoming more virtual. Digital technologies and artificial Intelligence (AI) are not only helping make up for reduced working capacity but also aiding in remote patient care and acceleration of R&D processes.

Mobile health apps are witnessing a sharp adoption growth, as people opt to stay at home and use digital health technologies, instead of physically visiting healthcare practitioners. According to a report by Rock Health, digital health received USD 5.4B in funding for the first half of 2020. Out of that USD 936M went towards telemedicine initiatives.

Life sciences companies and government organizations are also embracing digitization, and partnering with digital health and AI companies. For instance, Sanofi worked with startup Luminostics to develop a smartphone-based COVID-19 test. The National Institutes of Health, US, has launched an AI imaging collaboration for the detection and treatment of COVID-19.

Wearables using nanotechnology, are also gaining the attention of researchers, for tracking the virus and drug delivery, respectively. For instance, Fitbit has posted data showing that the trackers in its wearables can even detect asymptomatic cases.

A look at the future

In the current climate, companies need to make decisions keeping in mind not only their patient outcomes and worker safety, but also find ways of adapting to the rapid changes owing to  the prolonged pandemic. Despite the challenges posed by COVID-19, there have been certain opportunities for the industry’s long term benefit. For instance, supply chain disruptions have compelled firms to re-examine existing channels and modes of production.

It is imperative therefore, for companies to learn from the ways they initially responded to the impact of COVID-19 pandemic on life sciences, and focus on strengthening their operational capacities and digital capabilities to face the new normal.

Netscribes’ healthcare intelligence solutions can help you navigate such challenges by gaining a wider outlook, and adapt to emerging market scenarios efficiently. . Contact us, to know more.

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