Industry insights

Forty-three percent of respondents said they did not see an impact on their supply chain. However, 27% faced supply issues and difficulties in sourcing materials — 11% higher than the overall industry benchmark. The priority for this sector was protecting people and assets and retaining key employees and supporting their overall wellbeing. The need to review the supply chain was the third highest priority for asset protection; while most large pharma companies were sufficiently equipped during COVID-19 to keep their labs open, there have been shortages of certain drugs during the same period. For innovative pharma companies with a heavy reliance on outsourcing, the supply chain challenge will be more profound. Also, key in the protection of people and assets was reputation risk. This has been a focus for life sciences companies since well before the current pandemic as they work to reposition the industry as providing solutions and promoting science. Cost management is the second most significant priority for the sector, while expense rationalization is the key strategy for ongoing balance sheet protection. This may seem surprising given that life sciences companies typically operate at high margins, much of which is reinvested in R&D as a central part of their strategy. However, throughout COVID-19 clinical trials have been re-prioritized and all companies in the health life cycle have played a role in the pandemic response, whether providing vaccines, plasma or testing kits. In many ways, then, cost management is inextricably linked to revisiting business strategy, where the industry has more appetite for M&A to support its reshaping strategy.