The COVID-19 pandemic magnified the importance of digital advances as companies raced to meet the demand for new testing, vaccines, and treatments to combat the pandemic. However, with increased competition, a shifting regulatory landscape, and growing demands from patients and health care providers, life sciences companies face significant challenges and must find ways to differentiate themselves and remain competitive.
Our 2023 Global Life Sciences Outlook explores seven trends that are expected to shape the sector. In the coming year, the focus will remain on embracing digital technologies, navigating a changing regulatory landscapes and market volatility, and addressing health inequities. By adopting the right strategies and capabilities, life sciences companies can continue to deliver value to patients, health care providers, and other stakeholders.
The outlook:
Although there has been a downturn in M&A activities over the past decade, life sciences companies are poised to witness an increase in M&A values in 2023 due to increased competition and the growing demand for multi-indication pharmaceutical products.
Vaccines and next-generation treatments, such as cell gene therapy, represent new streams of revenue for life sciences companies. Meanwhile, MedTech companies are expected to divest non-core assets in order to improve their growth profiles and create opportunities for strategic acquirers.
Key takeaways:
The outlook:
According to a recent Deloitte survey, R&D innovation is one of the top actions that 91% of life sciences organizations plan to invest in during 2023 and almost half of them are optimistic about the sector’s outlook in the coming year. Despite that, there are significant financial challenges facing the success of the current high-risk, high-cost R&D model. To move past this, and to succeed in the post-pandemic world, life sciences R&D organizations need to focus on accelerating digital transformation programs, strategic shifts, and commercial reorganization.
Key takeaways:
The outlook:
Historically, supply chain management has relied on static assumptions creating forecasts using scenarios from similar circumstances. However, in the event of unforeseen emergencies like a significant disruption in distribution channels, these forecasts might not be adequate.
With volatility related to the global pandemic, shipping and logistics-related geopolitical turmoil, and four-decade high inflation, the global life sciences sector is witnessing a shift in perspective towards supply chains. The new approach aims to increase flexibility, streamline manufacturing processes, and enhance real-time tracking. As per a Fortune/Deloitte survey, 88% of respondents cited production or logistics issues, and reduced logistics capacity, as key challenges. To mitigate these challenges, life sciences companies are adopting transformative solutions to enable proactive scenario planning and risk mitigation.
Key takeaways:
The outlook:
Historic global shifts, pharmaceutical reimbursement policies, and intensifying competition have led life sciences companies to adapt using dynamic pricing techniques where prices fluctuate based on real-time data such as customer demand. Pharmaceutical companies are also working towards understanding niche diseases through hyper-targeting of patient populations to ensure equitable access to treatments.
Key takeaways:
The outlook:
Since the pandemic, three-fourths of people around the world now have experience with at-home tests and companies are increasingly able to access, interpret, and act on the billions of patient data points.
With more than 435,000 active clinical trials underway across the globe, and more than two million devices across more than 7,000 groups of instruments, machines, and software used for medical purposes, companies can generate insights that will help life sciences enterprises move towards patient-centricity. This involves deployment of decentralized diagnostics and direct-to-consumer channels and solutions, gathering real-world patient information, and achieving optimal patient outcomes through digital alliances.
Key takeaways:
The outlook:
The pandemic led to many life sciences companies to digitize their operations virtually overnight. Cloud technologies and platforms enabled organizations to let their employees work remotely and collaborate, share data across third party networks, as well as run AI and machine learning (ML) algorithms. All while reducing costs, improving time-to-discovery and insight, and collecting data to improve manufacturing and supply chain operations.
The pandemic accelerated the application of digital solutions such as Software-as-a-Service, AI, Internet of Things, automation, blockchain, data lakes, wearables, AR/VR, and digital therapeutics.
Key takeaways:
The outlook:
Inequities in the health system including unconscious bias, a lack of trust, language barriers, impediments to preventative therapies and devices developed to change lives from reaching people who really need them. These inequities also cost life sciences companies substantially in lost productivity annually. Life sciences companies need to develop strategies that places health equity at the heart of their business operations and extend across their organization, offerings, community, and ecosystem.
The Deloitte Health Equity Institutes partnered with the World Economic Forum (WEF) to develop the Global Health Equity Network (GHEN) to ensure health equity across businesses. As a part of this effort, Deloitte and 38 other organizations signed the signed GHEN’s Zero Health Gaps Pledge to adopt a multi-disciplinary approach to support diversity, equity, and inclusion (DEI) programs, provide accessible and quality health services, paying employees a fair wage, and investing in safe living environments.
Key takeaways:
Review or download previous life sciences sector outlooks.
2022 global life sciences sector outlook
2021 global life sciences sector outlook
2020 global life sciences sector outlook
Interested in the trends and issues impacting health care providers, health plans, and government health organizations? Explore our global health care sector outlook.
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