Advances in science and technology, as well as an evolving regulatory and market access environment, continue to shape the life sciences sector. An enabling regulatory framework fashioned by clear, stable, and predictable regulatory rules has been seen to be critical for new disruptive technologies to be adopted. The purpose of this new-year update is to identify emerging trends, challenges, and opportunities for the growth and investment in this sector.
Innovation agenda
The pharma and medtech sector will continue focusing on innovation to ensure its timely access to benefit patients and public health. Research and development efforts will grow with particular emphasis on technologies that will meaningfully improve health outcomes.
Digital transformation efforts will continue to pave the way for connected care and to garner greater efficiency in research and development, where product engineering can play an important part to incrementally improve or optimise existing products in terms of their product and formulation characteristics, or to identify new therapeutic targets for new products to be developed.
Improved efficiency and the reduction in cost of product development inevitably drives greater use of specialist contractors such as CDMOs and CROs with differentiated capabilities, particularly in the emerging therapeutic areas based on novel biological products, advanced therapies and novel drug delivery formulations to mediate targeted effects.
Challenging and volatile environment
But the regulatory compliance and market access environment remains volatile and challenging. There is a tension between, on one hand, the need for more robust regulatory regime – which will inevitably increase the cost and time required for product launch – and, on the other hand, payers globally are developing new laws and policies to restrict access to new products because of affordability and health budget impact concerns, thereby denying patient access to effective medical interventions. Some have argued that current methods of assessing affordability in healthcare may be limited by their focus on budget impact.
Those healthcare cost containment measures are being applied not only to countries with publicly funded health systems such as Europe, but to those which have traditionally enjoyed free drug pricing such as the US.
The Inflation Reduction Act in the US, together with sweeping regulatory and market access reforms in Europe, have now propelled companies to re-evaluate the assumptions about their approach to research and development, portfolio pricing, market access, budget and underlying costs.
A more effective approach may necessarily involve a broader perspective than is currently postulated to consider the long-term benefits of a treatment modality and cost-savings (including efficiency gain) elsewhere in the health delivery system, so that appropriate financing models can be developed that support sustainability as well as innovation.
Drug price freeze coupled with mandatory statutory rebates to contain healthcare costs and savings have become the new reality. In the EU, the Transparency Directive requires Member States – before imposing a price freeze on all medicinal products or on certain categories of medicinal products – to carry out macro-economic review to justify that the freeze be continued unchanged.
Notwithstanding this over-arching procedural requirement, the Court of Justice of the EU ruled that such a review could be dispensed with if price-freezing measures concern only individual medicinal products and not certain categories of medicinal products. Excessive drug pricing will continue being scrutinised by authorities to ensure that drug prices are fair and not excessive in relation to the perceived therapeutic value.
Legislative changes for sustainability and accessibility
The legislators across the globe will continue their efforts to make medicines more available, accessible, and affordable. In the EU, a pharmaceutical package put forward by the European Commission seeks to achieve these legislative goals, whilst supporting the competitiveness and attractiveness of the EU pharmaceutical industry.
The package envisages the need to adopt a 'carrot-and-stick' approach to promote greater access to innovation across EU Member States. Given the upcoming European Parliament election in 2024 and the change of the College of European Commissioners thereafter, it is anticipated the legislative process will likely be delayed until after 2024 EU elections.
New ways of evidence generation
Regulatory authorities as well as payers are increasingly looking at new ways of gathering relevant evidence to inform decision-making. These include the role of real-world data and real-world evidence in supporting the evaluation of new medical interventions across the different stages of their development and evolving product lifecycle. From 2025, the new EU Health Technology Appraisal Regulation will go live which will have an impact on market access of new medicines and medical technologies through a harmonised framework to characterise the product properties to guide relative clinical effectiveness assessment.
New trial designs are being considered to make clinical development more efficient and to expedite drug development and eventually bring innovative products to patients faster. This would enable multiple therapies to be tested individually or in combination and/or multiple diseases in parallel under a single overarching protocol without the need to develop individual study protocols for every sub-study for each hypothesis-testing.
International cooperation
International coalition of regulatory authorities as well as health technology agencies will continue their efforts to set agreed international standards and harmonised requirements. As the industry becomes more globalised, regulatory and enforcement authorities recognise that enforcing and assessing regulatory compliance with legislation and safety standards will become increasingly challenging and resource intensive.
International cooperation between enforcement agencies and regulators has become an inevitable consequence of globalisation to ensure effective oversight of complex supply chains, drug safety and efficacy monitoring. In the EU, the EMA as well as its sister organisations such as the Coordination Group on Mutual Recognition and Decentralised procedures and the EU Heads of Agencies are increasingly scrutinising post-authorisation activities to ensure that the standards for safety, quality and efficacy are maintained post-marketing. Obtaining product approval and maintaining it post-approval will become critically important endeavour for the overall product life-cycle management.
Watch-out for industry and investors
Developers, manufacturers and investors will need to respond to the ever-evolving challenging regulatory compliance and market access environment in relation to the key pillars of product commercialisation:
- Product development to generate meaningful data to support positive differential value.
- Continued effort in monitoring safety, quality and efficacy post-marketing to maintain the validity of the granted marketing authorisation and the market access conditions in multiple jurisdictions.
- Supply chain integrity.
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