There is a saying, coined by the late Edward Lorenz, an early pioneer of the chaos theory, that “the flap of a butterfly’s wings in Brazil can set off a tornado in Texas.” This observation is known as the butterfly effect: the concept that small changes can have large downstream effects.
Today, the life sciences industry is operating at the tip of a butterfly’s wings.
This evolving milieu is characterized by a shifting regulatory environment, calls for pricing reform, mounting pressure to innovate, concerns over data quality and drug safety, and worries about the industry’s reputation.
Life sciences experts at YourEncore have identified six areas in the pharmaceutical industry that are particularly susceptible to the butterfly effect. These areas are poised for the kind of disruption that initially may seem insignificant, but may have a large and lasting ripple effect.
Each of these are discussed in detail, along with our point of view (POV) in Pharm-ers Almanac 2016: The Butterfly Effect.
Biosimilars Take Flight
Biologics are among the most expensive drugs in the pharmaceutical industry. With eleven biologics losing their patents this year, many biosimilars are expected to enter the market. Despite a discounted rate of 20-30 percent, a 2014 Rand analysis predicts that biosimilars will only decrease U.S. spending on biologics by about 4 percent, begging the question: is the manufacture of biosimilars a necessary evolution of the market or a distraction from big pharmaceutical’s innovation and investment in other new drugs to address unmet needs?
FDA Nets Drug-Device Combination Products
The popularity of drug-device combination products has been soaring. The market for combinations of drugs, biologics, and devices is expected to grow to $31 billion by 2019. However, growth in this sector is threatened by a lack of alignment with FDA, in which there are countless examples of combination products taking upward of five years to receive approval. How can drug and med device companies best operate within the regulatory framework today and in the future to deliver innovative solutions to patients in a reasonable time frame?
With the price hike of Mylan's EpiPen making recent headlines, this hot topic is leaving the pharmaceutical industry in a difficult position. How do companies balance the thirst for innovation by patients and the value their medicines deliver with the cost of delivering that innovation and building a sustainable business?
CROs vs. Cocooning
Nearly two-thirds of pharmaceutical and biotech companies spent between $10 million and $50 million in 2014-15 for outsourcing. However, issues with quality have some pharmaceutical companies talking about retaining in-house resources, with nearly 35-55 percent of sponsors reporting moderate to significant dissatisfaction with a contracted project. What’s the cause of this? Does the success of a CRO engagement begin with the selection process, or does it come down to management?
Regulatory Wing Clipping
Legislative and regulatory changes in the pharmaceutical industry are in their chrysalis stage, and soon will be ready to radically emerge and make their impact on developers. By the looks of it, we should expect an invasion of new regulations and their interpretation, which will slow down the rate of approvals. Are all these upcoming regulations a barrier or an opportunity?
The rising costs of drugs and biologics calls for increased drug imports, and worries about supply chain quality are putting oversight of drug development, manufacturing, and marketing by regulators under a magnifying class. How can the pharmaceutical industry prepare for increased quality oversight?
Individually, any of these trends can be disruptive to a drug developer. In aggregate, they can pose a significant butterfly effect on the industry. While developers cannot stem the tide of change, YourEncore can help you anticipate and prepare for these changes.
Read more about what YourEncore experts have to say about the changing life sciences industry by downloading the highly anticipated Pharm-ers Almanac 2016: The Butterfly Effect.