- Digital transformation continues to propel the reshaping of business models, with different emphases for the Americas, Europe and Asia Pacific, depending on the maturity of the market and interplay of life sciences companies and other healthcare organizations in the broader ecosystem.
- Globally, respondents noted that accelerated digitalization (31%), changing demand patterns (38%) and the need for rapid product/service development (34%) have shaped their businesses the most.
- Data privacy and compliance could curtail data monetization. A deluge of sensitive patient data is putting a focus on reducing risk in the storage, transfer and sharing of data vis-à-vis global regimes. Respondents consider data management (53%) and data analytics/solutions (44%) top priorities for their business models, with 57% of life sciences business considering the latter as a new revenue source.
The life sciences industry has traditionally grown through innovation, acquisition and geographical expansion. Today, life sciences companies are evolving their business models to address market saturation, compliance with more complex global regulatory regimes, and law lag due to new innovative and digital products entering the market, according to the latest survey from Baker McKenzie and Informa Pharma Intelligence.
The survey of over 250 business leaders from the pharmaceutical, biotech, medical device and medtech sectors in Asia Pacific, The Americas and Europe, uncovers how the life sciences industry aims to leverage new and existing sources of growth over the next 10 years.
Vanina Caniza, Global Chair of Baker McKenzie’s Healthcare and Life Sciences Industry Group, said, “Digital transformation in the life sciences sector cannot be treated as an isolated goal. To the contrary, it poses a new and critical need for interaction among multiple stakeholders, many of whom are vastly different. Our report sets out key insights and recommendations to those working in this area, on what they need to consider if they are to continue to evolve successfully.”
The survey provides insight into what areas are experiencing the greatest impact from digital transformation. Across all respondents, clinical operations (73%) and support functions (69%) have benefited the most so far from digital transformation efforts. Baker McKenzie Partner Khelin Aiken, said:
"Industry, regulatory authorities and stakeholders have embraced digitalization at warp speed, partially in response to COVID-19. Particularly in the R&D space, clinical trials' design, recruitment and retention are undergoing a digital transformation that is braced by the understanding that when pharma leverages digitalization, we can realize an increase in participant access, enable robust collection of data and generally create greater efficiencies to lower costs and decrease healthcare disparities."
Baker McKenzie highlights in its report that the ongoing process of digital transformation presents many potential pitfalls for the industry. The results of the survey show that compliance is the largest risk area, with 34% of respondents citing it as their primary concern.
Regional outlooks show some variance and while the risks associated with compliance, are felt most keenly by the industry across Europe and the Americas, in Asia Pacific almost one in three respondents cited supply chain matters and cross-border data governance as the top key areas of risk. Other key risk areas include data storage and management and IP protection for data.
Looking ahead, pharmaceutical and biotech respondents are motivated by data monetization and value-based healthcare. Areas like cloud technology, data analytics, apps and telehealth/AI are the primary digital focus areas. Meanwhile, medical devices and medtech companies' are adopting product-service hybrid models and are quickly adapting to a world where data and digital tools have become intrinsic to business renewal. Key digital focus areas include apps, telehealth, and remote monitoring, with a view to looking at digital therapeutics and business support platforms within five to ten years.
Henrique Frizzo, Partner at Trench Rossi Watanabe*, Sao Paulo and Head of Healthcare and Life Sciences, Latin America says:
"Government action can greatly facilitate the evolution of life sciences business models. In particular, pharma and biotech companies can benefit from grants, incubators and incentives, boosting the adoption of digital and data tools through clinical trials. In turn, digitalization can also facilitate speed to market, development of drugs and drug approval. As medtech companies evolve and take on hybrid product-service models, it will be essential to continue adopting and integrating digital and data tools. In general, the future of life sciences collaboration is also contingent on potential regulatory shifts, should new devices and products cross and require new approvals. Companies will need to have strong IP protection for data and manage cross-border data governance as well."
* Trench Rossi Watanabe and Baker McKenzie have executed a strategic cooperation agreement for consulting on foreign law