We spoke to Programme Director of the Master in Pharma & Biotech Management, Dr Anton-Giulio Manganelli, to get his take on the impact of Covid-19 on the Biotech industry.
Dr Manganelli holds a Phd in Economics from Toulouse School of Economics and a Master from Bocconi University, and has extensive work experience in research and consultancy on competition and health economics.
How are pharma and biotech companies facing the challenge of the COVID-19 outbreak?
The COVID-19 outbreak has been a shock for the industry. It started a race to find a vaccine and to develop diagnostic toolkits. Several companies have already successfully developed the diagnostic toolkit, which regulators approved exceptionally quickly, but it will take longer before a vaccine is on the market. This is due to regulations: while it is technically feasible to find a potential vaccine relatively quickly (many companies claim to have already found it), an optimistic prevision of the time required to run proper clinical trials is 12-18 months.
With this in mind, we can identify 3 clear challenges that companies in the sector are facing:
- Meeting the ever-growing demand for diagnostic kits
- Researching and identifying a potential vaccine
- Organising clinical trials for potential vaccines
On a more basic level, companies are struggling to ensure that they can still function effectively and efficiently under the current circumstances. COVD-19 has seen a significant –and sudden– increase in employees working remotely, and the supply chain of many pharma and biotech companies has been disrupted by the closure of manufacturing plants around the world. Many companies, especially those producing generic drugs, rely on Chinese and Indian manufacturers for their active principles, and COVID-19 has put those supplies at risk.
Can you tell us a bit about digital health and how it relates to COVID-19?
Virtually all pharma and biotech companies are facing the challenge of switching to digital health, and COVID-19 has been an extraordinary push in that direction.
In some countries in Europe there is a debate about how to use apps that track people that were in contact with sick people in order to reduce the spread of the disease – these apps were already used in South Korea. Moreover, any diagnostic app may make the identification of sick people easier and, at the same, make sure that doctors do not get infected by the patient. This highlights the increasingly important intersection between the traditional pharmaceutical & biotech management and the new trends such as digital health.
How is the health crisis affecting the industry financially?
COVID-19 has dramatically affected the majority of the sectors. There are clear risks for pharma and biotech sectors, some of which I have already mentioned. First, the supply chain disruption for companies that rely on Chinese and Indian manufacturers has been notable. Although companies have already reduced their dependency on these suppliers, changing supplier comes at a cost.
Second, there is a fear that productivity will decrease for employees working remotely. For example, the work of pharma representatives is traditionally conducted primarily through in-person meetings with doctors, and working remotely obliges representatives to find new (possibly less effective) ways to connect with doctors.
Third, a considerable risk for companies researching vaccines and conducting clinical trials is that the investment in R&D does not always have a positive return. In the current COVID-19 environment, the line between a dramatic success and a terrible failure becomes much thinner (e.g., being the first or the second company with the vaccine can make a huge difference in the company’s profits). Even for companies that initially find a relatively effective vaccine, this vaccine is always at risk of being replaced by a more effective one further down the line.
The efforts to find the sequence of the genome of COVID-19 have been exceptional
How are pharma and biotech companies helping in the battle against COVID-19?
The efforts to find the sequence of the genome of COVID-19 have been exceptional – just a few weeks into the epidemic, we already had the full genome of the virus. Artificial intelligence has also been crucial in explaining the relationship between the sequence changes in COVID-19 and the development of the epidemic.
In terms of finding a vaccine, some companies claim that they have already found one, although any new medication must undergo a rigorous testing phase lasting 12 to 18 months.
What skills does a manager need to be able to deal with challenges like this one?
Managers in the pharma and biotech fields need flexibility, creativity and resilience. Flexibility and creativity because they need to find alternative ways of working: working remotely can be challenging, and this is especially true when managing a team to align efforts. Resilience because pharma and biotech companies are, and will continue to be, under a lot of pressure from governments and shareholders alike to find a solution to the epidemic.