Life sciences - key developments to expect in 2023 and beyond

A recently published alert, which can be found here, provides a reflection of the challenges and the growth-driving opportunities presented to the life sciences sector. It describes the key takeaways relating to the market dynamics, as well as the regulatory and market access environment, principally in the EU and the UK. But those considerations would similarly resonate in other geographical regions.

Despite the challenging macroeconomic and geopolitical environments, the life sciences sector remains resilient—as it had been at the height of the COVID-19 pandemic. As a knowledge-based sector, a persistently strong appetite for growth and innovation, irrespective of the economic climate, continues to provide a sustainable level of activity that continues to attract investment.

There are strong strategic reasons to pursue acquisitions in order to fill the growth gap in the next five years, to address, for example:

• The erosion of exclusivity rights that may present market competition with follow-on products.
• The necessary growth of the unmet-need market to benefit patients.

There are potential acquisition and investment opportunities in 2023. Certain therapeutic areas such as immunology, oncology, neurology, cardiovascular diseases, orthopaedics and vaccinology could be the focus of product development.

In addition, around 7,000 rare diseases have been identified, which affect around 300 million people around the world (or 4% of the global population), and the disease burden could be a harsh reality particularly for the younger population. It is estimated that a third of children suffering from certain rare conditions will die before the age of five. Understandably, products developed for rare diseases are of particular interest to address the unmet medical needs.

Promising science and technology with significant differentiating features will remain the key driver for commercial interest and growth. Contract firms involved in research and development, manufacture, and distribution activities are becoming attractive targets for investment.

Combination approaches are increasingly being developed and adopted to maximise therapeutic effects and to improve patient outcomes. Also, new technological approaches, including digitalisation, are being adopted to improve efficiency in research and development.

In view of the ongoing R&D efforts, unsurprisingly, regulators and payers deciding the fate of market access of new therapies will need to respond to the continuing scientific endeavours and medical advances to ensure that the regulatory and market access systems remain relevant to foster research into new technologies and treatments.

The evolving regulatory environment will have a significant bearing on timely access to effective treatment for patients. New initiatives and policies are being considered by authorities and policy-makers to align the regulatory environment with technological and medical advances. But the market access environment, driven by pricing and reimbursement decision-making, remains challenging in order to meet budgetary constraints and the affordability threshold set by the health systems.

Similar pricing pressure is also felt in the United States through the Inflation Reduction Act. In Europe, payers are also calling for changes to the regulatory exclusivity rules in the European Commission’s planned review of the EU pharmaceutical legislation.

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