Pharmaceutical firms are seeking faster time to market, reduced costs and access to technology, thereby generating rapid traction in life sciences outsourcing marketing
The life sciences industry is going through a renaissance period that is marked by transformational breakthroughs in the way technology is utilized. Key market trends such as rising adoption of decentralized trials, focus on research and development (R&D) efficiency, rise in the use of specialty medication, and increasing importance of real-world evidence (RWE) is forcing enterprises out of their comfort zone and necessitating the development of next-generation technological capabilities, resulting in increased adoption of outsourcing in the life sciences space.
The rising demand for technological support is one of many trends compelling firms in the life sciences industry to rethink their strategy and operations. Other trends are explored in depth in Everest Group’s “Life Sciences Operations: Changing Market Dynamics Ushering In a New Wave of Digitalization” In this report, Everest Group examines the key themes and trends characterizing the life sciences operations market, including the various levers of emerging technologies and their impact across the life sciences value chain, outsourcing dynamics, deal trends, and the service provider landscape.
- Modernizing clinical trials: Clinical trials in the life sciences sector are experiencing a shift from a centralized clinical trial approach to a decentralized clinical trial (DCT) approach, which has resulted in reduced costs and enhanced recruitment. DCTs leverage virtual platforms and other technologies (such as smart phones, wearables, sensors, and in-home devices) to enable clinical trial testing in various settings—from point-of-care locations to trials conducted at patients’ homes. Artificial intelligence (AI) and machine learning (ML) are being leveraged to facilitate diagnosis, improve patient satisfaction, and generate real-world evidence of drug efficacy.
- Increased focus on APAC markets: Although North America and the European Union (EU) are currently the largest geographies for life sciences, Asia Pacific (APAC) countries are growing in importance due to the increase in healthcare spending and rise of non-communicable diseases (such as cardiovascular disease, cancer, and diabetes) in the region. Healthcare spending in APAC is projected to surge to US$2.3 trillion by 2026, based on an analysis of health expenditure data from the Organization for Economic Co-operation and Development (OECD). The rise in spending will be partly utilized to purchase medication and MedTech devices, thereby boosting the life sciences market in the region.
- R&D’s focus on efficiency: To improve their return on investment, pharmaceutical companies are shifting towards more cost-efficient DCTs, improving efficiencies through collaborative R&D, and utilizing emerging technologies such as AI and analytics. Additionally, life sciences firms are increasingly outsourcing their R&D activities in a bid to reduce cost.
- Specialty medicine: The life sciences industry is transitioning from a blockbuster model (i.e., development of mass market drugs to generate new sales) to a specialty model (i.e., development of specialized medicines to treat specific disease subtypes). Examples of specialty medicine include gene therapy and precision medicines customized to each patient’s genetic makeup. As the demand for biotechnology drugs grows, enterprises will be required to develop and adopt new technologies such as AI and analytics for rapid drug development and adaptive clinical trials.
- Beyond-the-pill services: “Beyond-the-pill services” refers to an accompanying offering to a pharmaceutical or medical device product that addresses a patient’s needs along the entire journey, leading to better health outcomes. Such services may include education and information, assistance in managing the disease or side effects of treatment, tracking therapy progress, and co-pay programs. To develop and implement an effective beyond-the-pill service offering, life sciences firms need to invest in digital remote monitoring platforms and cloud-based technologies and increase hiring of trained personnel to provide care.
- Regulatory scenarios: In nearly every geographic region, life sciences firms are anticipating regulatory changes that will impact their business. The U.S. is developing guidelines to regulate the Software-as-a-Medical Device (SaMD) market. In Asia, regulatory scrutiny is on the rise, particularly in the Chinese and South Korean markets. In the EU, the Medical Device Regulation (MDR) and In Vitro Diagnostic Regulation (IVDR) are set to replace the Medical Device Directive of 1993.
- Real-World Evidence: The US Food & Drug Administration (FDA) defines Real-World Data (RWD) as data relating to patient health status and/or the delivery of health care routinely collected from a variety of sources. Real-World Evidence (RWE) is the clinical evidence about the usage and potential benefits or risks of a medical product derived from analysis of RWD. Currently RWE is used to support regulatory submissions and label expansion, to inform the design of value-based contracts for comparative effectiveness research, and as a synthetic control arm of clinical trial design. To develop RWE capabilities, most pharmaceutical firms are actively seeking access to new sources of data; however, many lack the capabilities and infrastructure to analyze large datasets, which may result in huge investments in data analytics platforms and a rise in outsourcing to service providers with data analytics capabilities and requisite data security and governance measures.
- COVID-19 impact: The pandemic has exposed the pharmaceutical industry’s supply chain fragility and its dependence on China and India, leading several countries to restructure pharmaceutical supply chains to enhance onshore production capacity. The pandemic has also ushered in the digital age in the life sciences industry, with several firms focused on investing in social media, cloud computing, big data, cybersecurity, and digital platforms.
These trends have generated rapid traction in the life sciences outsourcing market as service providers accelerate their efforts to assist enterprises in augmenting their operations by delivering services and solutions across the life sciences operations value chain.
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About Everest Group
Everest Group is a research firm focused on strategic IT, business services, engineering services, and sourcing. Our clients include leading global companies, service providers, and investors. Clients use our services to guide their journeys to achieve heightened operational and financial performance, accelerated value delivery, and high-impact business outcomes. Details and in-depth content are available at http://www.everestgrp.com