Hidden Depths – The Impact of COVID-19 on the Pharmaceutical, Biotech and Devices Industries

July 27, 2020

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The COVID-19 pandemic is shifting gears and with it, the ways in which we cope and respond. We are moving from an initial state of surprise, fear, consternation and a general lack of knowledge to an evolving understanding of consequences of the pandemic in our lives – that we are going to have to adapt to several unpleasant realities both as a society and as individuals and that the stakes are long-term. From this developing understanding, there are some clear implications for the pharmaceutical, biotech and device sectors as the COVID-19 pandemic continues. In the most recent survey conducted by FleishmanHillard TRUE Global Intelligence – COVID-19 Mindset: The Collision of Issues – there are glimpses into the changes that people are experiencing in their consumption of healthcare services, and the impact that has on medicines and ultimately the pharmaceutical, biotech and device industries:

1. People Are Settling into a Lower Level of Access to Healthcare – In the beginning of the pandemic, FDA announced that it was “postponing” meetings. There was a clear implication of a “wait-and-see” approach to ascertain if circumstances might allow for in-person meetings later in the year. But under current circumstances and high transmission rates in the U.S., people are understanding they are in this for the long haul. That means that the initial downward spiral that was seen in the consumption of healthcare services will likely continue. In fact, the survey seems to confirm that. U.S. respondents are now estimating that a return to normal would take at least 29 weeks. Moreover, nearly half (48 percent) thought it would take from five months to more than one year. That perception will likely inform their behavior and healthcare access approach with nearly half (47 percent) saying that they will likely postpone routine doctor visits or elective procedures in the next 12 months. That may be good news for insurers, but not for healthcare systems of manufacturers of medicine.

2. Ongoing Financial Impacts Are Likely to Affect Care – As the July report from Families USA affirmed, over 5 million Americans have so far lost their insurance due to their loss of employment. With the current increase in cases, the economy will continue to be hindered, thereby making it likely that this number will not get better and may even worsen. In addition, there were impacts in specific regions and states where the rate of loss was much greater than others which would likely inform the future consumption of healthcare services and prescription medicines. The FleishmanHillard TRUE Global Intelligence Survey found that 58 percent of U.S. respondents stated that they either do not have enough money or have just enough money to pay monthly expenses and half stated that they have cut back on expenses – a behavior that they see continuing in a post-pandemic world. These financial realities inform pharmaceutical sales as well as the scope and presence of emerging need for patient assistance programs that may be needed to help patients get access to prescription medications. It is noteworthy that in the survey when asked why they were postponing doctor visits most people indicated concerns about safety, but nearly 1 in 5 said that they could not afford it and 14 percent said they no longer have insurance due to unemployment.

3. Expectations of Industry is High; Confidence Not So Much – The TRUE Global Intelligence Survey sought to ascertain how institutions are performing with respect to COVID-19 and perceptions about how committed these institutions are in doing the right thing. In the first round of the COVID-19 survey questions published in May 2020, 64 percent of U.S. respondents thought the pharmaceutical industry was doing excellent/great/good in their response to the pandemic, a number that increased to 69 percent in this second round survey and ahead of corporations more generally. It is possible the increase in regard for the industry is a result of the highly publicized efforts involved in vaccine development. However, when asked how committed the pharmaceutical industry is to do the right thing, only 29 percent of respondents gave high marks. How the industry executes on the vaccine promise may in turn influence the perception of commitment. Companies will be pressed to show they are committed to the right thing through the regulatory process and in issues related to access to any vaccine developed.

4. A Vaccine Will Help, But Not Solve the COVID-19 Issues – As companies race to develop, test and get regulatory blessing for a vaccine, consumers do not perceive it as a singular solution. While just over half (57 percent) of U.S. respondents said that a vaccine will end the threat, over one-third of respondents said that the end comes when there are either no more infections or there are medications that can effectively address symptoms. In short, while vitally important, it may be equally important to put the spotlight on what companies are doing to shore up testing and treatments for COVID-19 in addition to vaccine development. This may be particularly true given recent reporting from The New York Times citing a growing number of polls that report a high level of distrust respecting a vaccine casting doubt on a willingness to accept any new vaccine for COVID-19.

In short, there is a lot being demanded of industry both in terms of action (finding a safe and effective vaccine) – and expectation (that once found, access will not be an issue). This is happening at a time when it is likely that sales of existing medicines and the launch of new ones will be less financially rewarding in the past as people put off care either because of safety or financial concerns. Last year, prior to the emergence of the pandemic, a Gallup poll found the pharmaceutical industry held in record low regard at the bottom of U.S. industry rankings. In the midst of the pandemic and in between the demands and expectations of industry, there is opportunity for change.