Top 10 Risks to Life Science Companies - from E&Y

An excellent overview of the challenges of the Industry. The E&Y Life Science website is a very good resource.

The top 10 risks facing Life Sciences companies, and the steps that companies can take to address them, include:

1. Demonstrating value and pricing pressures: Beginning early in the development process, companies can begin to measure and articulate the product’s value, and open a dialogue with payors. Pipeline prioritization decisions can be made with a stronger consideration for a reimbursement pathway, not just regulatory approval.
2. Capital access/capital allocation: Biotech companies are working to identify alternative sources of capital, while both the pharma and biotech industries are increasing emphasis on efficient capital allocation and managing the balance sheet.
3. Boosting R&D productivity: Pharma companies are beginning to emulate biotechs by breaking R&D into smaller, more innovative teams with greater autonomy. Companies of all sizes can outsource for speed and efficiency, focus on fewer disease segments, and more diligently address true market needs for high-value products.
4. Revolutionizing business models: Companies can adopt a portfolio approach, experimenting with different models to learn from other industries and explore new partnership models. Most important, they should take steps to ensure flawless execution.
5. Ensuring safe products: To manage an increasingly complex global supply chain, companies should adopt a comprehensive risk management approach, plan early for post-marketing surveillance, and build strong relationships with Customs authorities in order to improve efficiencies and protect against counterfeiting.
6. Protecting and capturing the value of intellectual property: The industry can increase advocacy on behalf of patent reform.
7. Sustaining a culture of innovation: Companies are exploring alternatives to the fully integrated R&D model that most pharma companies are built on. Opportunities exist to invest more selectively in defined therapeutic categories, and to reinvest in the people and talent pipeline.
8. Global supply chain integrity: Companies can improve due diligence of third party suppliers, increase vigilance about regulations and standards in emerging markets, and employ more robust supply chain management and internal controls.
9. Enabling access: With increased pressure to broaden access to therapies, companies can proactively define and execute a comprehensive approach in emerging markets, exploring creative pricing approaches and local strategic partnerships.
10. Loss of reputation: It is currently vital to take steps to ensure effective risk management, choosing partners carefully, and maintaining high standards for product safety and data transparency.