The pandemic has recast the pharmaceutical industry as a hero and led to faster adoption of digital technology, greater collaboration and more innovation.
Boyden's perspectives on the news and trends that are transforming industries
Sinking share prices, low public opinion, regulatory threats and other ills plagued the pharmaceutical industry in the years leading up to the pandemic. Then with the outbreak came a raft of new challenges, such as supply chain issues. Opportunity costs mounted as pricey elective treatments and clinical trials for potentially lucrative new drugs were postponed. But when economies began to perk up, enlivening drug sales, the race for COVID-19 vaccines accelerated. This process has brought fundamental changes to the industry, which continue to unfold.
Sales from vaccines are boosting the performance of pharmaceutical firms, and investors are growing increasingly optimistic. One pharma executive said the pandemic was “a significant inflection point for the industry”, referring to something more significant than a reversal of fortune or even the shift in public sentiment towards Big Pharma.
For one, the industry is becoming much more agile. As Tim van Biesen of Bain describes, the race against COVID-19 led pharma to “break all of the rules”. The crisis spurred companies to spring into action and achieve results quickly, leading CEOs to start questioning whether this same vigour could be injected into daily operations. John Reed, Executive Vice President and Global Head of Research & Development at French pharmaceutical giant Sanofi, says the pandemic has pushed decision-making lower down the corporate ladder, enabling the firm to act with more urgency.
In rising to the challenges of the pandemic, pharmaceutical firms have been quicker to embrace digital technology, The Economist reports. Tools like remote monitoring, electronic screening and tele-consultations are encouraging new patient enrolment for clinical trials, says Sam Glick, Global Leader, Health & Life Sciences at Oliver Wyman. David Ricks, CEO of America’s Eli Lilly, praised the potential of virtual trials to be faster, better, and more inclusive of remote populations. Albert Bourla, CEO of pharmaceutical giant Pfizer, said digitisation allowed his company to keep all of its trials on track in 2020.
Digital technology is also transforming the way pharmaceutical sales reps work, since their in-person pitches were paused. Ricks said that Eli Lilly’s virtual contacts increased more than ten-fold in 2020 from a year earlier. He expects them to be maintained, since they could allow the company to “reach those physicians who wouldn’t see our sales representatives”. Digital sales also enable pharma companies to trim their staffs as well as their sales and marketing budgets, which McKinsey Global Institute reckons could raise the industry’s productivity by about 25%.
Another common criticism of pharmaceutical firms is that their rigidity undermines innovation. Bourla says that in the past there were “way fewer targets” for to pursue, so it made sense to focus on a few blockbusters. Now the possibilities are dramatically wider and, says David Risinger of Morgan Stanley, the “explosion of new platforms and drug candidates will result in much more collaboration”. Pfizer’s own collaboration with German biotech firm BioNTech on its COVID-19 vaccine is a prime example of what can be achieved.