Cost of new drug development is key concern for life science as focus shifts to repurposing
27 Juin 2024 - 11:56AM
63% of life science companies believe the high cost of new drug
development is among the emerging themes that will have the
greatest negative impact on the sector in the next 3-5 years,
according to Global life science risk report 2024 published today
by WTW (NASDAQ: WTW), a leading global advisory, broking, and
solutions company. This is leading to an increased focus on finding
novel use cases for existing drugs, named by 66% as having a
positive impact, as firms seek to launch new products and expand
their international footprint.
The 2nd life science global survey asked 400 senior decision
makers belonging to pharmaceutical, biotech and other life science
sector companies how they manage emerging risks and how they are
preparing for the future.
The survey also revealed that regulation and reputation risk
have risen to the top of the life science agenda as companies feel
pressure on a range of issues such as increasing regulatory
activity post-Covid, U.S. drug price controls, rising data privacy
concerns, ESG reporting requirements and product contamination.
Changing or increasing regulation was named by 53% among their top
external risks, up from 39% since the 2022 survey, while reputation
was cited as a top risk both internally (47%) and externally
(41%).
Other key findings include:
- Smart manufacturing (increased
technology/automation in production) is seen as the sector’s
leading digital transformation opportunity, with 47% of respondents
including it among their top 5.
- Stockpiling and panic buying named
biggest supply chain risk by 61% as more firms seek to bring
operations in house.
- Difficulties attracting and
retaining talent and aligning internal culture with strategic goals
ranked as top obstacles to success.
- Intellectual property is the
weakest area for risk management, with 44% declaring they have
ineffective, inconsistent or non-existent processes.
Life science companies are also increasingly concerned about
physical climate risks. Almost half of respondents (48%) said
natural disasters were among their biggest supply chain risks,
while 58% named lack of natural resources as main environmental
concern. As well as water scarcity, this result may reflect the
difficulty of sourcing water that is free of per- and
polyfluoroalkyl substances, commonly known as PFAS.
Manufacturers are having to test for new contaminants to comply
with a changing regulatory environment, including in active
ingredients supplied by third countries, which adds a layer of
complexity to risk management. A rise in litigation and claims
related to contaminants adds to this concern, with 41% naming
product contamination as a top internal risk factor.
“After the turbulence of the last few years, the sector is
returning to traditional business priorities with companies looking
to launch products and expand into new markets,” said Edward
Hunter, Life Science Broking Leader (part of the Direct and
Facultative GLoB), WTW John Connolly, Life Sciences Leader for
North America at WTW added: “But, as they do so, the risk profile
of the sector is changing. New smart technologies, while increasing
production efficiency, are creating more exposure to risks like
data breaches and intellectual property infringements. Global
instability and supply chain changes, coupled with increasing
regulatory and reporting requirements, are adding to the complex
risk landscape. Firms need to be aware of weak points in their risk
management processes and remember that these new risks and
liabilities might require bespoke cover.”
The complete report can be downloaded here.
About WTW
At WTW (NASDAQ: WTW), we provide data-driven, insight-led
solutions in the areas of people, risk and capital. Leveraging the
global view and local expertise of our colleagues serving 140
countries and markets, we help organizations sharpen their
strategy, enhance organizational resilience, motivate their
workforce and maximize performance.
Working shoulder to shoulder with our clients, we uncover
opportunities for sustainable success—and provide perspective that
moves you.
Learn more at wtwco.com.
Media contact
Sarah Booker: Sarah.Booker@wtwco.com / +44 7917 722040
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