Lifesciences
Overview
One Minute Read
The healthcare industry responded with astonishing speed to the shock of the pandemic. As a result the outlook for Lifesciences is healthy, buoyed by growth in COVID-19 treatments and the healthcare needs of a growing and aging world population. However the operating environment is increasingly challenging, driven by a more and more demanding healthcare agenda. The global need for innovative, cost effective medicines continues to rise whilst regulators, payers, health care providers and patients are demanding greater value for money, proven effectiveness of products, more transparency and access to information. To meet these demands companies are seeking ways to improve R&D productivity, increase the efficiency of operations, develop new treatments and improve their return on innovation. Digital transformation is central to this agenda and will drive demand for technologies such as AI, cloud and automation.
Industry Description
The Life Sciences industry refers to all of the organizations and companies whose work is centred around research and development focused on living things (animals, plants, human beings.) The Pharmaceuticals industry is often considered a Life Science industry with its focus on the development, creation, and distribution of medications to aid the health of living things. Biotechnology or Biotech is a subset of each of these. The growing Biotech industry focuses on a few major areas including medical/healthcare, agricultural or food production and the environment through which living organisms are used or manipulated to create a useable product.
As of end-2021, the total global pharmaceutical market was valued at about $1.25 trillion. The market is expected to reach $1.7 trillion in 2025 at a CAGR of 8%. North America was the largest region in the global pharmaceuticals market, accounting for 46% of the market in 2020. Asia Pacific accounting for 26% and Europe 24%. Africa was the smallest region in the global pharmaceuticals market.
The industry is driven by its ability to innovate and the speed it can turn those innovations into regulatory approved commercial offerings.
Drivers
Shaped by the global megatrends and now the pandemic, the industry is being defined by five major drivers:
Demand - Long-term demand is growing due to an increasing and aging global population. Those suffering from chronic conditions use healthcare more than twice as much as those without.
Globalisation - Increasing global trade friction, on top of the global pandemic, have, in places, led to disruption in tariffs, regulatory changes, diminished access to suppliers/vendors, limitations on cargo capacity, and shortages of products.
Regulation & ESG - Regulation plays a significant part in defining the operating environment and with patient safety a priority will continue to do so. ESG expectations are expected to grow as companies face enhanced disclosures and new global standards.
Innovation - The industry has been continually defined by scientific innovation most recently in cell and gene therapies. This is now extending into digital therapies and artificial intelligence.
Profitability - Balancing the need to make a return on innovation (with all the associated risks) and the demands of payers (both government and private) for affordable treatments,
Transformation
The wider industry is transforming to a patient-centric digital integrated health ecosystem. Lifesciences are a critical part of this as they exploit scientific and digital technology to create personalised therapies that deliver better outcomes.
More productive R&D,
Intelligent Clinical Trials,
Smart Manufacturing,
Resilient Supply Chains,
and Digital Patient & Practitioner Engagement.
Digital Technology
Digital transformation will drive needs for Business Applications and platforms to deliver the next digital therapies and patient/practitioner engagement
Lifesciences are extensive users of the scale and flexibility of the Cloud and Data Analytics. Artificial intelligence is already becoming fundamental to drug discovery and will impact right across the value chain. Network & Communications infrastructure is crucial to enable global operations, and a Digital Workplace will enable an agile workforce.
Security, Compliance & Data Privacy is critical to consumer confidence and regulation scrutiny. Finally, IT Governance & Management will be essential to manage the change and ensure value for money.