New Praise, and Pressure, For the Pharma Industry

Amy Fix, partner at Barnes & Thornburg, discusses the effects of the COVID-19 pandemic on the pharmaceutical industry, including the ways that health and safety protocols have affected the R&D process, the pandemic’s impact on the patent and regulatory landscapes, and what the future of the industry may look like.

CCBJ: Your clients range from large international pharmaceutical corporations to smaller companies producing innovative drugs and drug products. Within the context of the COVID-19 pandemic, what have you observed among your clients?

Amy Fix: At the outset, I think the pandemic caught everybody by surprise. Many of my pharma and life sciences clients are focused on the research and development (R&D) of new medicinal products, and the lab-based business was hit particularly hard, because with social distancing and other required mandates, it was very hard to run research. Additionally, a lot of companies had trouble filling orders for the initial starting materials and required reagents used to perform their research, so there was a backlog associated with getting their R&D operations back up and running – even once they were able to work out some sort of program that allowed for social distancing in a lab environment.

The bigger companies fared better than the small companies, and it was often a matter of space. The larger organizations, again, had the ability to spread people out, whereas smaller companies didn’t have the ability to space people or offer any sort of partition, so they really had to modify their work plans pretty aggressively. As a result, we had a lot of people slow down some of their ongoing research. But in the legal department, it actually offered some of our in-house colleagues an opportunity to review a great deal of ongoing projects and get caught up on projects that had been placed lower in priority.

How do you think the pandemic will influence the future of R&D in the pharmaceutical space?

I think there will be some necessary changes in order to accommodate individuals and their particular sensitivities to the virus – like social distancing, appropriate spacing, appropriate partitioning, and other physical measures. The availability of a vaccine will help, but getting it distributed and getting everyone vaccinated who chooses to be vaccinated still remains a challenge. In the meantime, I do think that there’s a longer-term shift that will continue. There will be a change in how a lab-based business can be run. Because, again, people working for long hours in confined spaces just isn’t going to be an appropriate way to work for the foreseeable future. Instead, people will have to work in shifts or in some fashion like that, where one person is in the lab at a time, depending on space constraints. It will make things more difficult in terms of timing, and I think that is the biggest issue. Things that used to be able to be done rather quickly are going to be on a different timeline, because the ability for people to be in the lab, in close confinement, just isn’t available anymore.

In R&D contexts, there’s a timeline associated with everything in pharma, and every development program is given a Gantt chart that says which activity has to happen before the process can advance to the next activity, and if everything is shifted because things can’t run in parallel due to space constraints, then the expectations for these various programs have to be managed for the increased time periods. But I have noticed that a lot of people are adapting their practices. For employees outside of the lab environment – so legal departments, for example, – their ability to stay connected to the lab has improved as a result of the pandemic. It used to be that everybody was on campus together, and it was wonderful to be able to have in-person meetings, but now that those can’t happen, there’s been a shift into making use of technology to keep things running efficiently.

How have other areas of the life sciences sector reacted, and have you observed changes in pricing policy, patents and generics?

My primary focus in the life sciences arena has been on the patent landscape, and there is a lot of information there that’s associated specifically with the virus and the vaccines that are available and the patent pressure associated with the companies that have developed those vaccines. Interestingly, most of the companies are opting to offer a low-cost or no-cost vaccine. I agree with this scenario as it’s happening, as opposed to seeing a need for some sort of government intervention.

The pandemic is such an unusual circumstance that having some sort of government mandate doesn’t seem appropriate. Instead, it seems like something that the market can work out for itself. To make broad overarching rules seems inappropriate to me, because they could be misapplied in the future. It’s much better to focus on what’s going on right now and to try to get the vaccine out to the communities that need it.

Another thing I’ve definitely noticed is that the pandemic has had a positive impact in terms of showing the importance of innovative health care. The world now, more than ever, appreciates the need for medicinal innovation. And the relative quickness with which the health care community was able to mobilize an effort to address the virus, come up with a solution, and distribute it – it wasn’t perfect, of course, but it should give confidence to the community about the benefits of pharmaceutical innovation. A lot of people focus on the need for cheap medicines, and it becomes difficult when health care seems to be too expensive to achieve. I think we really do need to realize that innovation costs money. There is a lot of time and effort and materials associated with pharmaceutical innovation. I’m hoping that we can come out on the other side of the pandemic appreciating that balance a bit more.

The pandemic is such an unusual circumstance that having some sort of blanket government mandate doesn’t seem appropriate.

What should we expect in terms of new funding in this area?

There will definitely be more funding associated with research, because COVID-19 has brought to light the full impact that something like a pandemic can have. Beyond the loss of life, which has been terrible, the economic impact as businesses and communities have had to shut down has also been dreadful. So if pharmaceutical and biotechnical innovation can address that in a relatively quick manner, it’s going to be commercially beneficial. The amount of interest in new innovation and in bringing new medicines to market is going to increase rather than decrease. The pandemic has hopefully allowed the marketplace to appreciate the importance of new medicines.

What should our readers know about the regulatory landscape?

The pressure on the Food and Drug Administration (FDA) specifically was tremendous. But I do think that the FDA put forward the necessary resources to be able to look at the packages, the dossiers associated with each of the vaccines, while still addressing patient safety. This is such a delicate balance, because of course the nature of medicine is that you never want to do harm, and the desire to offer hope to the patient population always drives the market.

For the pharmaceutical companies and for the regulatory agencies, their primary goal is treating patients. It’s what makes working in the pharmaceutical industry so rewarding. It’s one of the rare industries where you’re not making widgets; you’re not making some sort of consumer goods. You really are making a difference. That aspect of it is unbelievably rewarding. At the same time, it’s a difficult environment in the sense that you’re asking people to make a distress purchase, and there’s a balance that has to be made between providing health care and having a commercial market to attract investors to the industry.

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