By Dr Maria João Cruz, PhD, Assistant Manager, Centre for Health Solutions

Following the launch of our eleventh annual report ‘Seeds of change: Measuring the return from pharmaceutical innovation 2020’, our UK and US Life Sciences R&D lead partners, Colin Terry and Neil Lesser, hosted a webinar with R&D executives from Pfizer and Novartis to discuss R&D productivity. The discussion also covered the impact of the COVID-19 pandemic on productivity. This week’s blog covers the main takeaways from this insightful discussion that resonated the most with me.

Since 2010, our independent research team, the Centre for Health Solutions, has provided insights into the state of biopharma R&D by tracking the internal rate of return (IRR) that leading global biopharma companies might expect to achieve from their late-stage pipelines. Over time, our analysis has shown declines in expected returns for the two cohorts of companies covered by our research, highlighting the mounting pressures on the industry, despite the increasing breakthrough advances in science and technology.

However, our latest results show that in 2020, and for the first time since 2014, the average IRR has experienced an uptick compared to the previous year. Thus, Neil Lesser kicked-off the panel discussion by turning to the audience to ask whether, in their view, this year’s uptick in IRR could be a reversal of the overall decline seen over the past 10 years and become an upward trend. Forty-nine per cent of respondents took the most cautious position, responding that it is still too soon to tell. However, when Neil turned this question to our guest panellists, their answers reflected a more cautious optimism and hope. Indeed, they highlighted just how far they felt the industry has come and how novel technology platforms and new modalities such as RNA therapeutics have opened up opportunities to continue improving R&D productivity.

Moreover, our panellists highlighted that pharma companies are increasingly able to access more holistic patient data, across health outcomes and the social determinants of health, providing insights into patients of diverse backgrounds. They considered that despite the increasing scrutiny over pharma pricing models and uncertainty around pricing reforms, these insights were helping the industry to achieve a positive trajectory on an innovation front that supports the development of new value- and outcome-based pricing models.

The conversation then moved to a discussion around clinical cycle times, as our analysis has shown that companies are continuing to take longer, on average, to progress drugs from Phase I trials to completion. Maintaining their optimistic stance, our panellists highlighted how companies have invested in novel technology platforms, such as mRNA therapies, that have a significant potential to address unmet needs and can substantially cut cycle times. Something we expect to see reflected in our analysis over the next few years. Nevertheless, our guest panellists accepted that it was important to remain mindful of some of the difficulties and challenges that come with novel modalities that target smaller patient populations, including selection and recruitment of trial participants, which can slow down the overall developmental process.

COVID-19 impact on R&D: Learnings from the pandemic

The second part of this panel discussion focused on the impact that the COVID-19 pandemic has had on pharma R&D. Before exploring the learnings that our panellists had gleaned from their COVID-19 experience, Colin Terry instigated another polling question aimed at understanding the audiences view as to which area, in their opinion, would be the main focus of the industry in a post-pandemic future:

1. collaborations and partnerships to source innovation
2. scaling the use of digital technology in drug discovery and trials
3. increasing use of real-world data/evidence (RWD/E)
4. the use of transformative approaches, such as master protocols and adaptive trial designs.

The second option, scaling the use of digital technologies in R&D, was the dominant answer with 36.4 per cent of the votes, followed by collaborations and partnerships and use of transformative approaches, which both received 27.3 per cent of the vote. Increasing the use of RWD/E, however, only garnered 9.1 per cent of the votes.

Our guest panellists collectively believe that all four areas are going to drive the future of R&D to some degree, learning from the experiences gained during the pandemic. Even before the pandemic, most big pharma companies were already making a significant effort to invest in digital technologies to collect, mine and analyse patient and disease-relevant data to increase the adaptability, agility and resilience of their R&D processes. The pandemic simply validated the importance of these investments, particularly the use of telemedicine and telehealth tools, to enable remote monitoring and continuation of some trial operations, in the face of disruptions and social distancing measures. Indeed, the panellists expect the use of these technologies will become an inherent part of the clinical trial process.

Moreover, panellists highlighted how all trials need to be centred around patients and that companies should continue to consider how new digital technologies and platforms can make trials more convenient to participants, ensuring there is appropriate representation of the diverse populations they serve.

The panellists also discussed how the pandemic has accelerated their interest in using artificial intelligence (AI) capabilities to digitally interrogate biological systems and drive efficiencies and improvements in drug discovery, creating a fundamental shift from the traditional, lab-based research paradigm. The panellists seemed to be quite firm in their belief that AI-driven approaches can be leveraged to significantly improve success rates and reduce cycle times, levelling the playing field and allowing companies to channel their time, energy and resources more efficiently.

Prompted by a question from the audience, the conversation turned to how the pandemic has changed how regulators work with the industry in evaluating data and accelerating approvals of safe therapies and vaccines. Based on their experience, our panellists shared how it’s been a great partnership with regulators, because as speed was paramount, so was the health and safety of the population, and both parties dedicated a lot of resources towards the reviews of COVID-related clinical trials. This collaborative effort between regulators and the industry has shown quite clearly the importance of working more closely together and how this improved productivity was underpinned by a shared purpose and a willingness and commitment to bring medicines to patients faster whilst maintaining the highest-possible quality and safety standards.

An optimistic look to the future of R&D

Personally, as the lead researcher on our ‘Seeds of change’ report, the optimism conveyed during the discussion has left me feeling very positive about the future of the industry, despite the overall decline in R&D productivity seen in our analysis. Indeed, my work has given me a real insight into the tremendous advancements in science and innovation that the pharma industry has achieved over the past two decades with much more in train. Moreover, as we covered in this year’s report, and as discussed by the panel, we have seen the COVID-19 pandemic galvanising innovation and collaboration at an unprecedented pace and scale. So, by embracing this optimism and belief that companies will reap the benefits of these sustained investments and experiences, we should see faster and wider access to new life-saving and/or life-extending therapies for patients.

To hear the full discussion, please listen to the on-demand recording.

Maria João Cruz - Assistant Research Manager, Centre for Health Solutions

Maria João is an assistant research manager for the Centre for Health Solutions, the independent research hub of the Health Care and Life Sciences team. At the Centre, she conducts rigorous analysis and research to generate insights around trends, challenges and opportunities to support the life sciences practice. Maria João has a PhD in bioengineering and more than ten years of experience in scientific research. Her postgraduate research work was developed in collaboration between Imperial College London and Instituto Superior Técnico (IST), University of Lisbon. She holds a both Bachelor of Science and Master of Science degrees in biological engineering from IST, Lisbon.

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