The trends affecting the biopharma industry that we’ve evaluated over the past decade have remained relatively stable. In this highly regulated healthcare industry segment, decision-makers often consider adoption of novel technologies, or solutions to be riskier than tried-and-true processes, approved methods or generally accepted practices. Thus, change can come slower than many would prefer. And sometimes it takes a crisis to stir the pot and accelerate change.
The COVID-19 pandemic is adversely affecting nearly all global industries. The biopharmaceutical industry and bioprocessing stand out as something of an exception. Without the extreme pressures being placed on global bio/pharma companies to develop therapies, vaccines, diagnostics and treatments, we would not be seeing this equivalent of the ‘moon race’.
And the rate of adoption of new approaches to everything from flexible cleanrooms, to large-scale plastic single-use devices for making vaccines, to changes in how clinical trials are overseen would likely not be happening. Or at least not at the rate of change we’ve seen over the past six months.
In this environment of urgency, some good may result, as the pressures on drug makers to create a key to releasing the world’s population from its current hostage situation engage the brightest minds into thinking otherwise toward solutions.
In our 17th Annual Report and Survey of BioManufacturing,1 in addition to the survey of 260 biomanufacturers and suppliers, we interviewed 26 global biopharma senior executives regarding how they are handling the crisis and how they see its long-term impact on operations. The pandemic has catalyzed and accelerated some significant changes, including many pre-COVID trends.
The biopharma industry is now considered an ‘essential’ industry by most countries. Domestic healthcare and public health policy in the future will likely include strategies for addressing future pandemics so global governments can protect their own citizens. Over the next five years, this factor will likely spur greater investment in, and regionalization of, the biopharma industry as more developing countries and regions begin to plan for future supply chain security.
The biopharmaceutical industry and its bioprocessing sector has seen healthy, consistent 12% annual growth1 for at least the past 20 years, as it has matured.
During this maturation the industry has learned flexibility, and to adapt to change. This adaptability is already helping the industry retool for rapid development and production of pandemic vaccines, therapeutics, equipment and diagnostics. Yet, this worldwide mobilization of resources is not asking much that is different from its pre-COVID core competencies. Mainly it has involved a re-allocation of resources, redoubling of effort, repurposing of production, and shifting of priorities.
As one interviewee remarked, “Not much has really changed. The industry has been part of the pandemic and biodefense response for decades.”
Near-Term Impacts
In the near term we have seen an increase in R&D and manufacturing, and a shifting of resources towards pandemic response. Although the great majority of the industry is not directly involved in the COVID-19 response, many of these suppliers and service providers have seen increases in their business as well. This is because many of the larger contract manufacturing organizations and materials suppliers have been focusing on the COVID-19 response, but they cannot let their pre-COVID projects languish. So many are shifting and outsourcing lower priority projects. This has benefitted others in the industry, especially those with available capacity.
Biopharmaceutical facilities, equipment suppliers, CMOs, CROs and R&D/developer companies are increasingly considered “essential,” and have continued operations with minimal initial disruptions. The general expectation is that there will be relatively minimal adverse near-term economic impact from the pandemic and its aftermath on the bioprocessing sector. Most companies are continuing with their long-term capital-intensive expansions and mergers/acquisitions. In fact, many appear to be accelerating their plans.
However, all is not smooth sailing. Although management of operations staff to keep up with the crisis has not generally been a challenge, in the near-term some operational and staffing problems have occurred, often related to increased activity or adapting to social distancing. Yet, because most bioprocessing-related activities are considered ‘essential’ they are continuing largely unaffected in terms of operations and output.
For COVID-19 related operations, suppliers are attempting to plan for increased peak demands as companies and governments start to rapidly develop, and deploy pandemic-related vaccines, therapeutics and diagnostics. Inventory management has also been a challenge as companies plan for short-term demand for supplies on-site, and development of back-up sources for supplies and services.
CDMOs/CROs may face challenges as some prospective nonpandemic-related projects are postponed or canceled, while those with viral vaccines-related services see increased business. This may presage mid-term challenges for the sales pipeline of some service suppliers, particularly those not supporting pandemic-related R&D or manufacturing. But with bioprocessing CMOs overall having as much as a year’s backlog of projects, CMOs are insulated from many of the short-term revenue disruptions.
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Despite how well the industry appears to be managing the crisis, interviewees cited a number of very significant fears. Worsening shortage of single-use devices and consumables is a key fear that will require resolution. Even before the crisis, there were sometimes backorders and long wait times for single-use supplies. These will likely lengthen (at least for non-pandemic response-related projects). Shortages of single-use and other critical supplies was noted as a primary concern by 75% of end-users.
Long-Term Effects
Some of the pandemic-related changes or trends will create long term, strategic shifts and changes in operations. These may include:
- More outsourcing: More use of Contract Manufacturing Organizations (CMOs)
- Supply chain strengthening: Changes in sourcing, and inshoring of raw materials
- Single-use systems: Adoption of larger scale, more flexible manufacturing strategies
- Process intensification: Doing bioprocessing faster, with smaller facilities, fewer staff
- Regionalization: More bioprocessing done globally, especially in developing markets
- Staffing: Expect hiring problems to increase
Even before the current COVID-19 pandemic each of these trends were evident. Based on our current research, we found changes resulting from the pandemic that are impacting industry dynamics. Some of the future-casting offered by industry executives suggested significant, long-term transformational changes, as well.
The Post-COVID-19 New Normal
In the future, respondents, both biopharma company and suppliers, expect to see a different ‘new normal’. Collaborations among stakeholders are likely to increase. Today, as the world works through this crisis, collaborations are seen as vital to a successful vaccine. This includes cross-company, cross-industry, cross-governments, and multi-nationally. There is a clear sense of purpose, and the current situation may well define future collaborative relationships as well. We may fi nd that working more closely today will carry out as collaborative partnerships into the future.
Summary of Effects on the Industry
From our research, we believe that the industry is likely heading toward the following as a result of the COVID-19 crisis.
- More Supply Chain Oversight: The pandemic will result in more product, supplies and services companies exercising more control over their supply chains, including reaching further upstream to more suppliers.
- More Facilities: Even at this early point in the crisis, we see that there will easily be $15-20 billion or more invested in new pandemic-related vaccines and therapeutics. Likely half or more will go to new manufacturing facilities.
- More Bioprocessing: Bioprocessing and related supplies and support activities will increase. This will include major significant rapid increases in pandemic-related R&D and manufacturing by companies and governments.
- More Pandemic-Related R&D and Manufacturing: Many companies and governments will be pursuing pandemic- and infectious diseases-related R&D and manufacturing.
- Prioritization of Supplies and Services: Prioritization of outsourced projects and supplies orders will be part of the “new normal” after the pandemic subsides.
- Single-Use vs. Stainless Steel: There will be more single-use systems (SUS) new process lines and facilities.
- More Modular facilities: Many new pandemic-related vaccines and biotherapeutics facilities will likely be modular. This trend has been accelerating for at least five years; the crisis will precipitate more rapid expansion.
- Single-Use (and Other) Shortages: Because pandemic-related bioprocessing process lines and facilities are or will generally be SUS-based, suppliers are concerned about future shortages.
- More Regionalization/Decentralization: More new facilities, including vaccines-related and for bioprocessing supplies, will be located internationally, with emphasis on regional manufacturing. This is now seen as essential to deal with any future pandemics.
- Faster R&D and Speed-to-Market: The pandemic is showing that (bio)pharmaceutical R&D needs to be more streamlined.
- More Collaboration: Those in the industry recognize the need for more collaboration and communication among bioprocessing professionals at all levels.
- Better Inventory Management: The need for better inventory management is becoming obvious. Before the crisis, delays in obtaining required equipment for biologics production were a challenge. Today, avoiding delays is a critical mission.
- More Investment: The private and public sector will increase investments in pandemic- and other infectious diseases-related R&D and manufacturing. Already, BioPlan is tracking well over $10 billion in projected new pandemic-related vaccines and therapeutics development eff orts.
- More Staffing Difficulties: Chronic staffing challenges have plagued the industry for 15 years. These will be exacerbated by expected increases in pandemic-related products.
- Shipping Delays: Adverse effects on shipping are being already experienced by many suppliers.
- More Automation: Related to the staffing difficulties, the preferences to decrease onsite staff, and process intensification, there will be increasing investments in automation.
Changes in the bio/pharmaceutical industry are being accelerated by the COVID-19 pandemic. Although suppliers have proven themselves robust in dealing with the pandemic, and business is continuing generally uninterrupted, there will be significant changes. Ongoing and accelerating trends will result in changes including improved strategies to moderate future pandemics and supply disruptions, development of collaborative relationships in R&D and among suppliers, and the implementation of more rapid, flexible, and modular production processes to speed products to the market. Along with much rapid expansion in bioprocessing capacity, these changes will affect manufacturing long after the current crisis resolves.
References
- 17th Annual Report and Survey of Biopharmaceutical Manufacturing and Production, BioPlan Associates, Rockville, MD April 2020, 450 pages, www.bioplanassociates.com/17th.
Author Biographies
Ronald A. Rader is the Senior Director, Technical Research, BioPlan Associates. He has 35+ years’ experience as a biotechnology and pharmaceutical, particularly biopharmaceutical, information specialist, analyst and publisher, and has been responsible for the Antiviral Agents Bulletin periodical; Federal Bio-Technology Transfer Directory; BIOPHARMA: Biopharmaceutical Products in the U.S. and European Market (www.biopharma.com); and the Biosimilars/Biobetters Pipeline Directory (www.biosimilarspipeline.com). [email protected], +1 301-921-5979, www.bioplanassociates.com
Eric S. Langer is the President and Managing Partner at BioPlan Associates, Inc., a biotechnology and life sciences marketing research and publishing firm established in Rockville, MD in 1989. He is editor of numerous studies, including “Biopharmaceutical Technology in China,” “Advances in Largescale Biopharmaceutical Manufacturing,” and many other industry reports. [email protected], +1 301-921-5979, www.bioplanassociates.com
Dr. Kamna Jhamb is a life sciences and healthcare market researcher. With a PhD in Biotechnology/Microbiology, she has extensive experience working in several key industry segments, and has experience at the Lawrence Berkeley National Lab (LBNL), Berkeley, CA and elsewhere. Her expertise lies in primary and secondary research, and market analysis of healthcare and biopharma segments. She contributes to international publications and journals, and researches for in-depth reports, analyses and strategic White Papers.