Opportunity in pharmaceuticals and medical devices

While the precise economic fallout of Covid-19 will vary by sector, none are completely unaffected. Such widespread disruption often catalyses a shift in market structures, with oligopolies’ strength tested by nimbler businesses. The pharmaceuticals and medical devices sectors are no exception.

As in many industries, the pandemic has accelerated previous trends already underway, with technology a major driving force in this. “Just as remote working has been enabled by technology previously unheard of to many, the healthcare sector too has seen changes underpinned by tech innovation. This is having a dramatic effect in a sector which typically changes very slowly given the human risks involved,” says Ben Long, Partner at Inflexion.

The Covid-19 crisis has shone a light on how countries spend their healthcare budgets. While all aim to maximise limited funds, the pandemic exposed areas where some countries found themselves under-provided, for example in intensive-care provision or prevention of comorbidities which were then aggravated by Covid-19. “We may see shifts in macro allocations to healthcare and within healthcare as variations in the approaches to provision were highlighted,” says Ben.

We may also see a heightened focus on prevention, and consumers increasing their out-of-pocket spend. Here in the UK, it has become apparent that Covid-19 is hitting people with underlying and often preventable conditions the hardest.

We have seen an increase in the area of prevention at European LifeCare Group, one of Europe’s largest providers of vaccination services. The firm has opened ten new clinics in London since partnering with Inflexion in 2018, and more recently has seen a rise in patients self-funding private healthcare services. And Lintbells, a leading producer of nutritional supplements for pets in the UK backed by Inflexion in 2017, has seen a marked uptick in interest in pet as well as pet parent health in 2020.

The UK Government is taking steps towards building a fitter Britain: Over the summer, it announced a £2 billion plan to overhaul cycling and walking in England by creating thousands of miles of new protected bike lanes, cycle training for all who want it, and bikes available on prescription. The government statement said, “tackling the causes of ill health, not just the symptoms, is vital to help reduce demand on the NHS.”

Opportunities for smaller players

“We expect a big change to come from digital technology bringing distant markets closer,” Ben says. This can create the ability to have high quality communications with customers or distributors in locations otherwise inaccessible without an on-the-ground sales force – effectively enabling smaller companies to reach global audiences. He points to a recent surgeons’ conference held by a UK manufacturer of surgical instruments in Latin America. Typically large delegate numbers are the preserve of the global majors, requiring big budgets and vast marketing organisations. However in this instance a smaller player was able to attract over 2,000 attendees given the virtual nature of the event.

The shift in route to market may be a boon to smaller firms, previously faced with large barriers to entry as more established, global pharmaceuticals dominated. “The ability to reach end users with what you are selling has increased,” Ben says. “Clinicians’ time is less monopolised by larger players now and they’re increasingly willing to engage with digital channels.”

In Medical Devices, fewer representatives in hospitals is another sign of changing times, with fresh restrictions on numbers on-site and during procedures making it more difficult to access surgeons or clinicians. Medical professionals are increasingly willing to build up their education remotely as a result. “This is an incredible opportunity for smaller innovative firms with new technologies as the bar is raised for accessing surgeons,” Ben says.

Day of digital

The enforced use of digital technology will also leave a lasting mark on how the life sciences industry brings products to market. A relatively new need for speed in drugs trials combined with reduced access to research sites (such as hospitals, where patient numbers are restricted) are driving the use of technology – namely remote patient monitoring to collect data in trials. Prior to Covid-19, remote monitoring was evolving very slowly, but now even the US FDA has been flexible in adapting trials protocols to allow for the use of remotely collected data, thereby reducing the need for site visits by trial participants. “The evolution is sensible, but it took a pandemic to instigate it,” Ben says.

This casts a spotlight on the importance of data and tech in helping to track and analyse it. “Connected devices and other digital technologies look set to be leaving their mark in the devices industry as well,” Ben says, pointing to the fact that performance and outcomes are monitored remotely rather than through in-person clinician visits. “The big question now is whether there remains a quickening of timeframes going forward, or whether it’s just for now.”

The technologies adopted over the last six months are likely here to stay, and have brought with them myriad benefits, from enabling working from home to facilitating ongoing patient and doctor communication through telehealth. As these benefits become more apparent with time, we can expect a continued uptick in adoption.

Tech brings markets closer

Nimble companies are reaping the benefits of their ability to pivot swiftly to the fast pace of change underway. PharmaSpectra, a global provider of medical affairs data to the pharma and biotech industry, has seen an uptick in meetings with potential clients. Founded in 2005, the firm’s data is utilised by the majority of the world’s top ten pharmaceutical companies, and it offered its coronavirus database free of charge during the pandemic.

PharmaSpectra partnered with Inflexion in October 2019, with proceeds from the buyout partly used to enhance the sales team. This made the firm well placed to cater for an increased number of meetings as prospective clients became more accessible through virtual meetings, a new phenomenon in 2020. PharmaSpectra estimates it has quadrupled its number of pitches – an opportunity enabled by a combination of its recent financial backing as well as its nimble nature.