Now we’re settling in to 2019 let’s take a glance at global pharma trends and what this means for the Irish Pharma sector for the year ahead.
Mergers & Acquisitions
2018 was a significant year for pharma deals with the biggest M&A deal of 2018 the $64 billion Takeda take-over of Shire (which closed on the 7th of January 2019). This deal is not over though as Takeda commits to divesting itself of $10 billion in assets over the next two years. Full details available on bloomberg.com
2019 meanwhile has started with a bang with the announcement of the Bristol-Myers Squibb (BMS) and Celgene deal which is potentially worth $90 billion.
The ever increasing cost of drugs has been an issue for governments, insurance companies, healthcare providers and patients for some time now. There have been some high profile cases which led to a showdown (on twitter) in July 2018 between big pharma and US president Donald Trump. The Major drug companies agreed to freeze US drug prices while discussions continued, however the freeze appears to be over and US drug pricing increases are occurring again in January 2019.
In the US both Republican and Democrat politicians have now said this is a high priority and we are likely to see significant pressure applied to drug companies in the US over the next few years.
Upcoming trends – AI and Information technology
Artificial Intelligence (AI), Virtual reality, Machine learning, 3D printers, Big Data analytics, Apps, Remote robotic surgery, Digital pills, Wearable tech, eHealth, mHealth, patient entrepreneurs… and the list goes on. The growth of Information technology both real and virtual in the healthcare sector is very exciting and is laying the foundation for “Personalised-Healthcare” delivery and more successful individual patient outcomes.
While pharma companies have adopted and developed a certain amount of new technologies there is a significant opportunity for the industry to improve efficiency and maximise results through use of new technologies. The traditional conservative approach to change needs to be adapted to a new and fast paced proactive adoption of technology. While the IT sector lives on a 2-4 year product life cycle and associated ROI, the Biopharma sector product life cycle and investment cycle are much longer term and don’t support quick turnarounds.
Pharma companies are looking at ways to reduce R&D costs and find new drugs quicker. Artificial intelligence and Data Science is making it’s way into the pharmaceutical industry following several interesting announcements for example Genomics Medicine Ireland (GMI) and the Roche acquisition of Flatiron Health.
So, what does this all mean for the Irish Pharma sector?
As we see companies merge, we can expect decisions on major strategic investment and drug manufacturing to change, usually for the positive for Irish based sites.
The effect of the rising cost of drugs will have very little impact here on the Irish Biopharma sector in the short term. However, one of the possible long term impacts may be how the BioPharma companies work out their Return on Investment (ROI) calculations for drug discovery.
We are seeing Drug innovation already under severe pressure according to a Deloitte report which looks back over the last eight years. Read more on deloitte.com
Regards IT and healthcare, Ireland is ideally placed to bring the two together with significant expertise in both sectors; presenting us with an enormous opportunity if we can put in place the infrastructure and ecosystem to support this crossover!