At a time when a robust global biopharma industry is critical, the global pandemic has exposed some of its weaknesses, as well as its strengths. New industry research shows that in our interconnected and global world there are still major challenges in delivering vaccines and therapies during a crisis.
With the next pandemic being a ‘when’ and not an ‘if’, this begs the question: how and where should countries and the global biopharma industry build in resilience.
The Global Biopharma Resilience Index, created by Cytiva, surveyed 1,100 global executives and ranked 20 countries on five factors: supply chain resilience, access to talent, strength of the R&D ecosystem, quality and agility of manufacturing processes, and effectiveness of government policy in supporting the industry. The overall index score for each country acts as a proxy for the strength of its biopharma industry.
Some of these trends show region-specific concerns. As I lead the Cytiva commercial business for the Asia Pacific, a very diverse region in many ways, I’ve seen evidence of these results first-hand. In Japan and in South Korea, where I currently live, the high cost of attaining talent is a major challenge. However, in Indonesia and Thailand, there are difficulties in sourcing and training talent. Two very different challenges in “one-region” of the world.
Globally, resilience is a top priority for governments, but the pain points of the industry are not well defined nor are there any easy solutions. Regional differences vary greatly. With increasing demands for drugs, therapies, and vaccines, countries are now determining how to best prepare.
According to the data, the industry’s weakest area is the talent pool and its strongest area is within government policy and regulation with the accelerated rollout of vaccines and therapies to combat the pandemic.
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Supply Chain Resilience
The biopharma industry currently relies on a global supply chain for the manufacture and distribution of drugs. While this has driven down costs through economies of scale, it makes the system vulnerable to bottlenecks and ripple effects when there are supply chain issues.
About half of respondents said their country is at least moderately dependent on drug importation. In particular, China and India have become hubs of production for generics and Active Pharmaceutical Ingredients (APIs), so any breakdown of supply there creates serious global problems.
The interconnected network of companies across the globe only increases the nodes where a single issue can have downstream and large-scale consequences for supplying drugs and therapies. During a pandemic there is even greater potential for issues that can cascade through the industry.
More than half of executives surveyed said that drug shortages have increased during the pandemic, but many noted the shortages had been increasing over the past five years. 50% of survey respondents said their country had experienced some shortages in critical medicines like insulin, while 74% said they have seen some shortages in oncology biologics during the past five years. Countries with lower gross national income per capita were more likely to report shortages. This points to underlying issues with supply chain resilience which have been exacerbated by the pandemic.
As drug shortages continue, many countries are building up their manufacturing capacity. 59% of executives surveyed agree that the era of offshoring drug manufacturing to low-cost countries is over, and 67% agree that the manufacturing of biologics is likely to increase dramatically in their country over the next three years.
China is an example of a country that is building out in region, for region manufacturing capacity. Cytiva and Wego, a leading CMO in China, have been expanding single-use manufacturing capacity in Asia Pacific to produce bags, components and other customized products since 2018. The expanded capacity also responds to surging needs from neighboring markets like Japan and South Korea.
Increasing domestic production and being flexible when working globally with suppliers could provide some agility to keep operations running smoothly when something goes awry. We will see the localization of supply chains which is good for the industry, but strong global collaboration both inter-industry and among governments will still be needed.
Access to Talent
One of the most important aspects and one of the weakest areas quantified in the Index is access to a skilled labor force. A lack of talent locally can cause significant issues, especially in high-tech industries as pharma and biopharma.
Fostering local talent can be difficult due to a combination of factors including a lack of guidance for students in higher education and ‘brain drain’ as promising young scientists leave for markets with more lucrative opportunities. As the biopharma industry embraces a digital transformation, we are also competing with global technology companies for talent.
Take South Korea, where I live, as an example. It ranks first out of all the countries surveyed in terms of R&D capabilities, but it ranks last in terms of cooperation and collaboration. Improving the R&D ecosystem through collaboration requires a multi-stakeholder approach that brings together academia, industry, and governments. One of the collaborations I’m really excited about here in Asia-Pacific is China-Singapore Guangzhou Knowledge City (CSGKC). CSGKC is truly a joint effort, bringing together the governments of China and Singapore alongside thousands of commercial organizations in a 178sq km science hub designed to drive collaboration and the regional R&D ecosystem across the science and technology industries.
As a member of the CSGKC, Cytiva worked directly with companies such as BeiGene, Lonza, and Akesobio, to rapidly establish manufacturing capabilities in the park with our KUBio prefabricated biopharma facilities.
Part of the issue is how expensive recruiting talent has become. More than 50% of executives and policymakers interviewed said the cost of talent is a key issue in their country in recent years as expectations have risen. As the industry shifts to more niche products and fields, there is more demand for a smaller supply of those sought-after skillsets. Lower-income countries specifically face harsh competition from high-income countries because of the incentives they can offer.
Talent development also requires an industry-wide effort, as well as support from governments. Cytiva has been partnering with global academic and government institutions to provide training and education programs to students, researchers, and manufacturing staff. Another barrier to the access of talent are local regulations. Just 20% of respondents said their country’s policies around the use of foreign talent were very flexible which is coincident with a rise in economic nationalism putting domestic interest firsts. This sort of isolationism, coupled with a lack of infrastructure to developed skilled workers, can lead to inequalities in health and impede access to life saving medicine.
Strength of R&D Ecosystem
Collaboration and open innovation accelerated the COVID-19 vaccine development. However, that collaboration in research and development over the past year is rare. The executives and policymakers interviewed in the survey think that while some public pharma and biopharma firms have a culture of cooperation, there is less collaboration among private companies, and even less within academic institutions,contract research organizations, and government think tanks.
This lack of consistent cooperation has made it difficult for companies to find partners. This could be due to a lack of investment into the ecosystem or because existing resources are not being used as effectively as possible. Respondents consistently rated the capabilities of pharma and biopharma companies in their countries as being among the best in the world, going on to highly rate their country’s response to COVID-19. But as it currently stands, the industry as a whole is reluctant to partner.
Quality and Agility of Manufacturing Processes
If there is one bright spot in the biopharma industry’s pandemic response, it is that its manufacturing has the ability to be both flexible and swift. This was not only the case with many high-income countries, but with many of the lower to middle-income countries as well. However, the research suggests that this agility is not always consistent.
Domestic pharma companies have less confidence in their ability to supply critical medicines like insulin and vaccines in the event of a surge in demand. This highlights the lack of capacity and agility to respond to demand fluctuations.
The industry recognizes these shortfalls. One of the most important suppliers for pharma and biopharma are the contract manufacturing organizations (CMOs) and contract development and manufacturing organizations (CDMOs) which can be outsourced to at critical stages of drug development and manufacturing. These have been seen as a potential solution to some of the shortages as they can offer a rapidly scalable manufacturing facility minimizing some of the upfront investment, improving agility.
There is also a push in the industry for adoption of disruptive technologies like artificial intelligence and machine learning to support automation of processes and refine procedures.
Effectiveness of Government Policy
Some of the biggest bottlenecks to delivering life-saving drugs, but also some of the greatest potential assets, are the policies enacted by governments and regulators. Governments have traditionally worked alongside the pharma and biopharma industry to help ensure a safe supply of medicines to their citizens.
COVID-19 has borne this out as new vaccines have been developed and authorized in less than a year. Typically, vaccine development can take more than a decade to reach the market.
Government support goes beyond regulation by incentivizing domestic research and development and manufacturing, which 65% of respondents agreed with. Policymakers recognize the benefit of this being done locally. Over two-thirds of respondents said that their country’s laws were effective in helping them develop and produce new drugs, with a majority saying that their country’s trade and tax policies were not an impediment.
Additionally, the findings from this survey show that start-ups are being left behind in funding. Less than 20% said public and private funding was supportive of startups. China’s investment in the biotech industry is well known, yet small- and medium-sized biotech enterprises are restricted in their ability to access financing in China.(1) This is also reflected in our own data, with China ranking sixth out of the eight countries surveyed in Asia-Pacific based on their access to funding for pharmaceutical companies.
Overall, regulators should take a common-sense approach, promoting harmony among organizations, and drawing on a shared set of rules.
Next Steps
Major hurdles remain in establishing a robust and resilient biopharma industry. Currently, there are production and distribution challenges, as well as open political spats about access to vaccines and therapies.
The Global Biopharma Resilience Index shows the industry has ample scope to improve. The relatively low scores may be surprising, even after the globally coordinated efforts produced multiple COVID-19 vaccines in record times.
Over the past two decades, biopharma has taken full advantage of the revolution in global supply chain management, leading to many benefits for patients. However, the survey results show that policymakers and biopharma executives no longer see this approach as resilient.
The survey results and the Global Biopharma Resilience Index pinpoint the areas that need the immediate attention of business leaders, industry bodies, and the government leaders who hope to establish strong domestic biopharma industries fit for the future.
References
- China’s Role in the Global Biotechnology Sector and Implications for U.S. Policy, Brookings Institution, 2020. from: https://www.brookings.edu/wp-content/uploads/2020/04/FP_20200427_china_biotechnology_moore.pdf
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