Report: High stakes for losers in Big Pharma vaccine race

Report: High stakes for losers in Big Pharma vaccine race

UK-approved vaccine comes as great news for the country – and the pharmaceutical industry. But for those big pharmas without an answer to Covid 19, falling behind could come at significant cost

Report: High stakes for losers in Big Pharma vaccine race

With deaths related to the coronavirus continuing to rise globally, the race between big pharma’s research departments has forced those companies to pump funds into a cause that may prove entirely fruitless.

“There will of course be winners and losers in the race to find a vaccine,” according to Dr Nicholas Jones, partner and patent attorney at Withers & Rogers, which specialises in pharmaceutical and life sciences sectors. “Winners can expect some commercial reward for their efforts. However, margins could be minimal for some players and could even be non-existent in some cases,” he said, via email.

Earlier this month, the UK government accepted the recommendation from the Medicines and Healthcare products Regulatory Agency (MHRA) in approving the Pfizer and BioNtech coronavirus vaccine

Following the UK’s steps, Canada’s health regulator authorised Pfizer and BioNtech’s coronavirus vaccine on December 9. The Food and Drug Administration (FDA) issued the first Emergency Use Authorisation (EUA) to allow the distribution of the vaccine in the US two days later.

For smaller competitors that fail to develop a vaccine in time, the stakes are high.

“The commercial costs will be significant,” said Jones. “For example, businesses that invested everything they have got into the global effort to find a vaccine for coronavirus could face significant cash-flow difficulties, potentially leading to business failure.”

Pharmaceutical companies also hope that pricing decisions reached at the point of market entry will be revised post-pandemic, according to Jones.

Ensuring product supply whilst demand is unpredictable also remains a core challenge that companies face. For pharmaceuticals producing medicine for cancer treatment, they will need to ensure the continuity of supply in the midst of the pandemic.

“The pandemic doesn’t change the chain of the product or the business model of pharmaceutical companies – it has accelerated the processes. We need to be faster because the process that they had in the past could not be according to the needs of the market,” says the global head of digital finance at a big pharmaceutical.

“To predict the demand is the most challenging part. Coronavirus started in March and people were worried we would be out of stock. In Q2, there was less demand and there was a drop in sales. To predict the demand is difficult because we don’t know how the market will react.”

Roche says demand for diagnostic tests and the instruments to conduct them continued to outstrip supply at the height of coronavirus, in which the company had to continuously ramp up production to manufacture as many tests and instruments as possible.

“We are adapting our strategy in real-time,” said the spokesperson at Roche. “We monitor daily customer inventory levels and test usage. This information helps us update our allocation planning as necessary to ensure that we provide testing supplies where and when they are needed most.”

Interaction with physicians has also changed. Pharmaceuticals are now unable to visit them and are only able to interact with them virtually.

The giant pharma has seen coronavirus impact its regular business and still does – causing delays in patients visiting physicians, resulting in less routine testing and treatments.

Due to the rise in transmission and death rates, the industry has been bound to collaborate in the search of a vaccine – cooperation which enabled pharmaceuticals to share costs.

“There has been an exceptionally high level of collaboration between organisations that might normally regard themselves as competitors – much of it leading to clinical trials,” said Jones.

Early December, Roche announced its partnership with Moderna to include SARS-CoV-2 antibody test in ongoing coronavirus vaccine trials. In October, the pharma also said it will be collaborating with Atea Pharmaceuticals to develop a potential oral treatment for coronavirus patients.

“Roche is at the forefront of the fight against coronavirus with a growing portfolio of diagnostics solutions, the development of new medicines and a number of partnerships across the industry,” said a spokesperson, via email.

Pharmaceuticals are also working closer than ever with top scientists, biotech and other industry professionals.

In August, Roche signed a collaboration agreement with Regeneron to develop, manufacture, and significantly increase the global supply of an investigational antibody combination for coronavirus if it proves safe and effective in clinical trials and regulatory approvals are granted.

But despite these collaborations softening the financial impact of coronavirus research, some pharmaceuticals will still suffer from up-front costs put into the process and lining up the required production capacity in time, according to Jones.

“This effort is unlikely to bring significant commercial rewards for all and could even force some smaller pharmaceutical companies to the brink of insolvency. The search for a vaccine has been driven by the shared goal to rid the planet of a deadly and previously unknown disease.”

Side effects

Above all, Jones says the search for a coronavirus cure has suspended other research programmes whilst also impacting the funding on other life-threatening diseases – including cancer, Alzheimer’s, neurodegenerative and autoimmune diseases.

Cancer Research UK has had to cut staff and reduce spending drastically due to a drop in fundraising caused by the pandemic – a scenario unheard of by the British charity, which will inevitably affect advancement into a cure for cancer.

Pharmaceuticals will need to bring these researches back on track post-pandemic, meaning collaboration amongst the industry will remain key to share costs and achieve economies of scale, according to Jones.

However, Jones calls for governments to intervene in the process as some companies will struggle to resume research programmes due to cash shortfall caused by coronavirus.

“It will take time to catch up and it is vital that governments consider areas where a cash injection or other forms of financial support might be needed to keep important lines of research open,” he said.

“Equally, it would be helpful for governments to encourage greater collaboration by regulatory authorities to help future approvals – an approach which seems to be paying dividends during the current pandemic.”

Earlier this year, Gavi – the Coalition for Epidemic Preparedness Innovations (CEPI) and the World Health Organisation (WHO) launched the COVAX plan to ensure those vaccines are available on a global scale to both higher and lower-income countries.

“By pooling resources and acting in solidarity through the ACT Accelerator and the COVAX Facility, we can ensure that once a vaccine is available for Covid-19, it’s available equitably to all countries,” said Dr Tedros Adhanom Ghebreyesus, director-general of the WHO, at the time.

A cyberthreat stronger than ever

Hank Schless, senior manager of Security Solutions at Lookout, says another primary issue that pharmaceutical companies have been dealing with is phishing.

With many workers now working from home, attackers have taken advantage of the widespread risk surface caused by multiple personal devices being used.

“The issue now is that that that corporate network that perimeter has actually extended out into every employee’s home and every employees’ device,” says Schless.

In the industry, the cybersecurity threat ranges from the R&D department right up to the distribution of the product – a supply chain highly at risk.

Schless warns that companies should be taking a modern approach when protecting their data, particularly as the number of phishing incidents has drastically increased over the last months.

In Q4 2019, pharmaceutical mobile phishing encounter was estimated at 7.06 percent but reached 15.26 percent in Q1 2020, indicating that attackers took the opportunity of employees working from home to hack mobile devices, according to Lookout’s report.

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