The Healthcare & Life Sciences Industry
About Life Sciences Industry
Contents
1. ⚕ Customers and Industry Participants
4. 👩💼 Life Sciences Industry Executives
5. 🤔 Life Sciences Industry Challenges
⚕ Customers and Industry Participants
Life Sciences Industry Customers:
- Patients 👨
- Providers 👩⚕️
- Payers 👨💼
Life Sciences Industry Participants:
A. Life Sciences Services Companies
- Provide scientific equipment and instruments, ongoing supplies (such as consumables), software and R&D services (such as contract research)
- Sell their products and services to biopharma companies, academic medical centers, hospitals and commercial laboratories
B. Academic Medical Centers
- Medical schools, teaching hospitals and research centers
- Biopharma companies fund research projects within academic medical centers in exchange for certain Intellectual Property rights
- Academic medicals centers conduct clinical trials
C. Biopharma Companies
- Discover, develop, manufacture and market drugs and other medicines
- Organized into:
- Pharmaceutical companies
- Pharmaceutical drugs
- Big Pharma companies: Pfizer, Novartis, Johnson & Johnson
- Also include generic (not genetic!) drug manufacturers
- Biotech firms
- Use biotechnology to develop drugs and other medicine
- Most biotech companies are small
- Pharmaceutical companies
- Often companies are both, hence called Biopharmaceutical companies
D. Distributors
- (Also called wholesalers) Buy drugs and other products from biopharma companies and sell them to healthcare providers
- Provide distribution centers, inventory management, logistics
💉 Products & Services
- Medical technology is sometimes considered part of life sciences industry
- Products and services:
- Drugs
- Synthetic drugs/chemical pharmaceuticals: manufactured from chemical components
- Biologics: drugs produced by living cells. Since they are large molecules of proteins, they need different drug delivery system, such as injections, implants and patches
- Branded drugs: drugs for which a single company has exclusive rights (patent) to market the product. Drugs that make more than $1 billion/year are called blockbuster drugs. E.g., Humira by AbbVie produced $20 billion in 2020
- Generic drugs: drugs manufactured and sold without patent protection. Generics of biologics are called biosimilars. Biosimilars are more difficult to manufacture (because they’re created from living cells) and are not exact copies of original biologics (hence ‘similar’)
- Over-the-counter (OTC) drugs: do not require a physician to be administered. When a drug’s patent period ends, most branded drugs become generics. If these generics gain widespread acceptance without serious complications or side effects, then the prescription limitation is lifted, allowing them to be sold directly over-the-counter.
- Vaccines: drugs that stimulate patient’s immune system to produce antibodies to a particular disease
- In vitro diagnostics
- tests done on samples such as blood or tissue that have been taken from the human body
- Include:
- Laboratory tests
- Point-of-care (POC) tests
- Over-the-counter (OTC) tests
- Digital therapeutic
- Clinically tested digital tools that help improve or manage medical conditions
- Consumer care products
- Include:
- OTC drugs
- Nutritional products
- Personal healthcare products
- Include:
- Drugs
- Therapeutic Area means an area of medical practice that encompasses groupings of specific diseases and/or disorders generally treated by a specific medical specialty, such as oncology, cardiovascular, neurology or hematology
- Just google ‘therapeutic area’ and you’ll find therapeutic areas of various companies like Pfizer
💹 Business Functions
(1) Research & Development (R&D)
- Lifeline of life sciences companies
- Drug development process:
- Drug discovery
- Preclinical testing
- Application for testing approval
- Regulatory pathways
- Phase I testing
- Phase II testing
- Phase III testing
- Approval
- Manufacturing & marketing
- Post market surveillance/Phase 4 testing
- Some countries require regulators’ approval before a drug is released there
- Biopharma companies sometimes outsource some clinical testing to Contract Research Organizations (CROs)
(2) Manufacturing & Quality Assurance
- Assure drugs quality standards
- Monitor shelf life of products
- Train company personnel
(3) Sales & Marketing
- Providers
- New drugs won’t be purchased until physicians prescribe
- Biopharma companies must market their drugs to providers so that they understand the approved uses, benefits and risks of their products
- Payers
- For providers or patients to be reimbursed for a drug’s use, the drug must be on a payer’s formulary list
- Even after approval, payers do their own assessment before putting it on their formulary list
- So Biopharma companies must market their products to payers as well
- Patients
- Although in some countries consumer-marketing of prescription drugs is banned, some companies market directly to consumers in some markets
👩💼 Life Sciences Industry Executives
- Business Unit Presidents (General Managers): Responsible for overall profitability of a business unit
- President/Chairman of R&D (Chief Scientific Officer)
- EVP, Supply Chain Management: Responsible for acquisition and stocking of raw materials required for manufacturing
- EVP, Manufacturing: Responsible for the production. If outsourced to a contract, such organizations are called Contract Manufacturing Organizations (CMOs)
- Chief Compliance Officer: Responsible for quality assurance and industry compliance
🤔 Life Sciences Industry Challenges
- Regulatory compliance
- Rising R&D costs and risks
- Restructuring due to pressure on profitability
- Opportunities for growth
- Advances in Science & Technology:
- Precision medicine
- Generic testing
- Gene therapy (CRISPR technology)
- Immunotherapy (CAR-T therapy)
- Pandemic (such as COVID-19)
- Revenue headwinds (patent expiration/patent cliff, resistance to rising drug prices)