A vision of the future after Coronavirus (COVID-19)

Life sciences analysis: In this article, Marie Manley, partner and head of the UK Life Sciences team at Sidley Austin LLP, Helen Middleton, counsel, and Bethany Wise, trainee solicitor, with the London Life Sciences team at Sidley Austin LLP, consider some of the ways in which the coronavirus (COVID-19) pandemic has affected the life sciences industry, in particular research and development, intellectual property rights and market trends. They highlight some of the medium to long-term issues that are relevant to companies in this stage of the pandemic, and consider a vision of the future after coronavirus. It is not yet known whether the EU will agree to this approach and, if it does, how this article will be altered by negotiations. However, this helpfully sets out the UK’s position.

The coronavirus pandemic is rightly dominating the life sciences sector at present. However, the crisis does not exist in a vacuum, and it is important to acknowledge various other innovations that deserve our attention and resources. Coronavirus-related treatments and vaccines are not the only exciting industry developments in the pipeline, and, as the UK’s National Institute of Health Research (NIHR) recently stated, ‘The time is right to work towards the restoration of a diverse and active portfolio of research’.

Practical implications of coronavirus for research and development

Data integrity

The coronavirus crisis has significantly affected clinical trials. Many pharmaceutical companies have postponed their research, and those that have persevered during the outbreak will have had to adapt to a drastic change in circumstances.

There is a significant risk that the reliability of data from clinical trials that have continued during the outbreak will have been adversely affected by coronavirus. Various contributory factors include quarantine, travel limitations, site closures, supply chain interruption, safety concerns for particular drugs, and having to use alternative methods of data collection. In addition to data being affected for those trial participants who have had direct exposure to coronavirus, the behaviour of all participants will have changed as a result of the outbreak.

Pharmaceutical companies must ensure they have accurately assessed the impact of coronavirus on the data quality from their trials and may want to consider contingency measures and modifications to their studies. They will have to be able to justify any results they have extrapolated following any unexpected interference to their research caused by the pandemic. Further, it is difficult to determine the trigger time for when the crisis ‘began’ and when it will have ‘ended’. Indeed, the outbreak will continue to affect any new research that starts in the short to medium term.

Virtual trials

The crisis is likely to have had a lesser impact on clinical trials that already contained ‘virtual’ or ‘decentralised’ components, enabling patients to participate remotely. Looking forwards, increased use of digital technology may become commonplace in clinical trials. Patient-facing technology may range from the use of tablets, smartphone apps or wearable sensors to transmit data to the study team, to an entirely virtual process whereby every stage of the trial takes place remotely, with no physical trial sites or direct face-to-face interaction (albeit a trial of this nature is unlikely to be sufficient to facilitate regulatory approval for market entry).

Use of this technology could bring a variety of benefits, including improved patient convenience, a wider pool of potential participants, greater retention and better data. Nonetheless, companies should also consider issues such as data integration, ensuring patient safety and Serious Adverse Events (SAE) reporting.

Resuming research

The NIHR in the UK has issued a Framework for restart (the Framework) guidance document to support local decision making in restarting studies that have been paused due to the outbreak, or starting new research. The Framework sets out guiding principles, preconditions, study prioritisation, and local and national roles in implementation. The NIHR has stated that the Framework will need to be updated moving forwards based on early experiences of restart, and work to restart studies must be complementary to ongoing work on urgent public health coronavirus studies, which continue to be afforded the highest priority.

While the European Commission has issued guidance on mitigating clinical trial disruption, we are yet to see any specific guidance along the lines of restarting studies and commencing new research. The European regulators may find it difficult to issue harmonised guidance in this area given that each Member State is in a different stage of the pandemic. However, this should be high on the agenda for regulators who are eager to see innovative products enter the market this autumn.

For further detailed information on the implications for clinical trials and research, see Practice Note: Coronavirus (COVID-19)—regulatory implications for the UK and European life sciences industry.

Practical implications of coronavirus for intellectual property rights

Throughout the outbreak we have observed remarkable generosity from pharmaceutical and medical device companies that are pooling their resources, making accessible their relevant intellectual property (IP) and supplying products for free or at cost. The sharing of IP, while highly commendable, raises potential issues for the protection of IP rights and sustainable product development in the longer term. Companies should be mindful of the scope of their IP licences and may wish to restrict this collaboration to the period of the pandemic and specifically for coronavirus-related indications. The period of the pandemic will be difficult to define, but could potentially be tied to guidance from the government or a regulatory authority.

Moreover, companies will also be aware that some governments have the option to implement extreme measures such as the use of compulsory licensing to allow third-parties to use new technologies whilst avoiding patent infringement. This is concerning as effective IP protection will be essential to secure high-risk life sciences investment in the future.

For further in-depth discussion of the implications of coronavirus on the future IP framework, see Practice Note: Coronavirus (COVID-19)—intellectual property implications for life sciences companies.

Market trends for medicinal products and medical devices

Pharmaceuticals

The crisis has led a radical adjustment in market trends and expectations. Healthcare expenditure has increased dramatically, following extraordinary demand and substantial funding packages from governments. The use of physicians, laboratory services and hospitals has escalated to an unprecedented degree.

Nonetheless, the potential economic downturn stemming from the pandemic may affect growth in the life sciences sector, as spending will be reduced and non-urgent treatments have been delayed or postponed. Supply chain issues need to be resolved for active pharmaceutical ingredients (APIs), and the market has suffered from clinical trial disruption and preoccupied regulators, as well as investment being redirected to COVID-19-related research projects and relief efforts.

Any potential coronavirus vaccine will likely be sold at-cost rather than for profit. Further, in the short term, fewer salesperson visits to prescribing doctors could slow growth in demand for new prescriptions of innovative or patent protected products (although there may be growth through retail channels as the public stockpile pain-relief and cough and cold medication).

Following the pandemic, companies may elect to diversify their supply chains in order to reduce future risk. There is the possibility of re-shoring API production in the future, given that currently 80% of APIs are manufactured in India and China. European regulators are already discussing a potential new obligation on member states to have a back-up production line. These measures are likely to affect profit margins in the short-term, as the cost benefits of outsourcing manufacturing is significant.

However, in the longer term there is a possibility that the outbreak will lead to increased expenditure in pandemic prevention, which could bring unexpected opportunities.

Medical devices

The crisis has transformed the medical devices industry: the demand for coronavirus-related medical devices, eg respiration apparatus, has soared, notwithstanding that many of the consumable medical devices, eg. masks and gloves, that are in higher demand tend to produce thin profit margins, and manufacturers who have engaged in price gouging have faced sharp rebuke from the public. In the meantime, the demand for discretionary medical devices, eg. artificial joints, dental drills and MRI, has collapsed due to the relevant procedures being postponed as healthcare resources are appropriated to aid the nationwide response to the pandemic.

It is possible that in the months following the pandemic, this demand will reverse. Stockpiling could lead to too many coronavirus-related medical devices on the market, while there will likely be increased demand for medical devices for use in elective procedures as healthcare professionals work through the backlog generated during the outbreak.

The crisis has led to remarkable innovation in the medical devices sector, and the uptake of various new technologies such as the virtual trials outlined above and widespread use of telemedicine in the healthcare profession. These new digital working methods are likely to remain following the outbreak. Indeed, virtual healthcare measures such as coronavirus contact apps may prove crucial for helping life return to normal. Forward-thinking medical device companies are in a strong position to not only operate but thrive within this ever-changing environment.

The future of the life sciences sector after coronavirus

While the coronavirus outbreak has undoubtedly brought unprecedented challenge to the life sciences sector, there is reason to be optimistic for the future. The crisis has brought out the best in the industry, and we have observed remarkable resilience, innovation and generosity among companies working to defeat the pandemic while continuing to develop critical new products for the market.

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