What's top-of-mind for biopharma executives in 2023?
The biggest concern, according to a survey of executives by Deloitte, is inflation: with respondents agreeing this is likely to have a ‘major impact’ on their organizations in 2023.
Meanwhile, all pharma respondents said regulatory changes would have impact on their strategy this year.
State of the industry
The Deloitte Center for Health Solutions surveyed C-suite executives on their outlook for 2023: with respondents highlighting issues such as a choppy economy, on-going supply chain disruptions and competition for top talent.
Most of the executives surveyed (who came from across US biopharma companies, medical device manufacturers, health systems and health plans) predict a ‘cautiously positive performance outlook’ for the industry (48%). That’s against 10% who describe a negative outlook (and 20% who remain uncertain or neutral on their projections).
Inflation came out as a top concern: with 50% noting this and 48% citing economic recession.
“Life sciences respondents agreed that inflation is likely to have a major impact on their organizations in 2023," noted Pete Lyons, who became Deloitte's National Sector Leader for Life Sciences Practice in the US at the end of last year.
"While inflation appears to be stabilizing, the higher cost of consumer goods is making it difficult for some people to pay for medical services, therapies, and devices. As a result, health care consumers might put off buying prescriptions or medical devices that can help them treat or monitor a condition.
“I see this as a potential challenge for our medtech and biopharma clients in 2023. But it could also be an opportunity. Companies that can make their products more accessible and affordable to patients could drive more volume.”
Meanwhile, 43% of respondents said they were worried about supply chain disruption. Recruiting talent remains another key concern, especially in biopharma: overall, 38% of respondents said they saw workface staffing challenges and shortages.
What can biopharma expect?
Talent is also expected to be a top issue for biopharma companies heading into the new year. About 90% of surveyed biopharma executives intend to invest in workforce development and retention—including a focus on diversity, equity, and inclusion (DEI). Attracting the best and brightest (and retaining them) is expected be an important issue in 2023.
Meanwhile, the grown in next-gen therapies is top-of-mind for biopharma executives. Nearly all (95%) of survey respondents cited this as an “important” or “very important” strategy.
Some 20 gene therapies and 10 CAR-T treatments are expected to be approved in 2023, and even more specialty therapies are on the horizon.
“Therapies approved to date have mostly been viral vector based gene therapies or autologous CAR-Ts," said Lyons.
"While they have been successful, challenges remain. These include inconsistencies in manufacturing yields and quality release, and limited access to patients due to regulatory or payment hurdles. Newer modalities including CRISPR-based therapies, non-viral gene therapies and allogeneic CAR-T therapies hold the promise to overcome many of these challenges and reach the wider population. Oncology and rare diseases remain the top two therapeutic areas for CGT development, with the former taking up almost 50% of the pipeline products.”
Regulations and pricing
Notably, every pharma executive polled in the survey said they expected regulatory changes (e.g., the Inflation Reduction Act, price transparency, interoperability) would have an impact on their organization’s strategy in 2023.
And the issue is particularly pertinent in high-cost cell and gene therapies.
In 2022, the FDA approved bluebird bio’s Zynteglo (betibeglogene autotemcel) which comes with a $2.8m price tag; and its Skysona (elivaldogene autotemcel), priced at $3m. That joins Novartis’ Zolgensma, which is priced at $2.1m.
Both bluebird bio and Novartis are backing the idea of outcome-based agreements: for example, bluebird bio said in August it planned to reimburse up to 80% of the cost of a Zynteglo if a patient fails to make the expected progress.
“Determining how to pay for high-cost CGTs is likely to be quite different than financing oncology drugs and other expensive therapies," noted Lyons. "And other similarly priced products are likely on the way. Growth in specialty therapies will likely require companies to focus on the consumer experience in a much different way.”
And the eye-watering cost of CGT therapies inevitably raises questions among patients over their pricing: adding to the pharmaceutical industry’s existing reputation as historically among the country’s least trusted industries, notes Lyons.
In fact, the Deloitte survey revealed that more than 70% of executives believe improving trust will be important in 2023.
R&D - particularly in biopharma - is a complex, multiyear endeavor with many ups and downs: and the structure of investments and financial returns over the process can be difficult to explain to the public.
Pricing, meanwhile, can be complicated; as can explaining the value of therapies to patients (bluebird bio says, for example, that $2.8m for one-off therapy Zynteglo compares to its estimates of up to $6.4m over a patient's lifetime for the current standard of care of regular RBC transfusions).
“It’s important to understand that these therapies are complex to develop, manufacture and deliver to patients," said Lyons.
"As such, they require extremely heavy financial investments to build the supporting infrastructure, recruit the right talent and manage the orchestration of the products. Secondly, these therapies are typically single-doses and curative in nature. For many patients and their families, this is the last resort and the last chance for survival, after having suffered many years of prior failed treatments and relapses. As CGT therapies become more mainstream, and the cost to produce them decreases, we feel they will become more cost effective.”
