LS&HC Horizons 2023 - Flipbook - Page 2
Hogan Lovells | 2023 Life Sciences and Health Care Horizons
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Welcome
While market headwinds and the lingering impact
of the continuing COVID-19 pandemic cast an
uncertain shadow over our forward looking view
for companies in the life sciences and health care
industry, we also see opportunities for our clients
and partners in the sector.
The digitalization trend that began before the pandemic
continues at a lightning pace, driving innovations in AI,
virtual health solutions, clinical trials, telehealth products,
and related cybersecurity measures, as well as vexing
questions on how to appropriately access patient health
data and how best to manage social media. While these
technologies often struggle to fit within existing frameworks
(and borders), that has not stopped regulatory authorities
from taking notice. Manufacturing and supply chain
reliability – for pharmaceuticals, (traditional) medical
devices, and now, increasingly, for precision medicines,
cell, tissue, and gene therapies and for AI-enabled
products – are key areas requiring attention to agreements,
appropriate corporate structures, regulatory developments
and an awareness of the risks from missteps that can result
in an increasingly global economy. Innovative products
and approaches continue to provide opportunities within
evolving regulatory frameworks that are as complex
as the technologies. Moreover, environmental, social,
and governance (ESG) considerations manifest in areas
as varied as clinical trials planning, real estate, and
regulations impacting emissions in the context of product
manufacturing. Working with regulators to expand patient
access to safe and reliable therapies continues to be crucial
for the life sciences and health care industry. As a result,
we see opportunities to bring the scientific and technical
knowledge from our industry partners into increasingly
complex conversations in the context of product approvals,
government contracts, and payment options across these
innovations.
In the transactional space, we also see increasing complexity,
as partners consider alternative funding options to
account for long development timelines and allocation of
manufacturing risk for bespoke therapies. While investors
continue to take a cautious approach towards all types of deal
making, a slight uptick in activity at the end of 2022 points
to the possibility of a more robust life sciences M&A and
partnering market in 2023 as many large companies have
amassed significant amounts of cash. However, innovators
with early stage pipelines (especially pre-clinical assets), may
need to advance further into the development process with
their own de-risking strategies before traditional players will
partner or invest. A theme of commitments towards future
capital and sorting out tricky governance issues appear in
our work on behalf of health systems, as well. We also see
increasing benefits to generate value from collaborations,
especially in the context of personalized medicine.
Life sciences and health care companies are also
disproportionately affected by specific issues in each
geographic area, where new legislation and regulation have
ramifications that will likely be felt far beyond their national
or regional borders. In the United States, the Inflation
Reduction Act (IRA) is a game changer, and will impact
drug pricing and market access, as well as having broader
implications for product lifecycle management and pipeline
valuation. Companies can also expect increased scrutiny
over web trackers and use of patient data. Throughout the
Americas, regulators have stepped up efforts to encourage
diversity in clinical trials. The UK continues to develop
guidance on clinical trials and medical device regulation
(including grappling with software and AI in the context
of medical devices), giving more clarity post-Brexit while
aligning closely with EU and other major international
regulator systems. In the EU, life sciences and health care
companies are also navigating changing legislation with the
introduction of new cybersecurity requirements, proposals
regarding a new health data space and regulations on fair
access to and use of data, and upcoming regulations on
substances of human origin. Companies are also watching
the imminent implementation of the Unitary Patent Court
and its impact on existing systems in Member States. Not
only must companies understand whether or not to “opt-out”
patents within their own portfolios, they must also consider
the strategic impact of the new system on their licensing and
commercial transactions, as well. These themes also carry
over to the Asia-Pacific markets. The digitization trend is
reflected in an increased focus on data privacy, cybersecurity,
and digital health by Japanese authorities. We also see
increased focus on quality management and government
scrutiny of the industry in China, Vietnam, and elsewhere.
Last but not least, new approval pathways for cell, tissue,
and gene therapy products are also on the horizon in
Australia. Companies with current – and future – interests
in these regions would be well advised to plan ahead. We are
proud that our truly cross-border and cross-functional teams
are here to help.
These are just some of the current and evolving trends that
are shaping the future of the industry, which we discuss in
the following pages. Hogan Lovells’ global Life Sciences and
Health Care team - comprised of more than 500 lawyers
around the world who support more than 1,000 clients in the
industry - stands at the ready to provide you with creative
strategies for your most promising opportunities and
integrated solutions that protect and support your business
when issues arise. We hope that you find our view of the
horizon thought-provoking. We look forward to working
together, and hopefully seeing each other again soon.
Global Co-Heads, Life Sciences
and Health Care Industry Sector
Steve Abrams
Partner, Philadelphia
Lynn Mehler
Partner, Washington, D.C.
Jane Summerfield
Partner, London
