The elections are over, our airwaves are free from political ads, and President Obama was elected to a second term. Regardless of where you stand on the political spectrum, the election results certainly affect our industry. Here are a few thoughts on the impacts.
The FDA’s Focus
I expect we will continue to see the build out of Healthcare Reform as well as a strong FDA emphasis on safety and GMP compliance. Margaret Hamburg, the acting FDA Commissioner will likely remain in place for at least the first year (assuming the “Fiscal Cliff “ is resolved). She will continue the increased emphasis on safety and GMP compliance. In fact, this week she is testifying in Congress on increased oversight on large Compounding Pharmacies.
The status quo of increased GMP Compliance and the Affordable Care Act will likely play out differently in each sector of the Life Sciences industry. Here’s what I expect:
- Pharmaceutical – As they anticipate millions of new patients entering the new healthcare environment, pharma manufacturers will continue to see both pricing and increased GMP compliance pressures. A prime example are those companies who were highly publicized examples of non-compliance. They’ve begun looking for cost effective, quick and easy to implement compliance solutions. Interestingly, even the largest companies are replacing elements of their enterprise-wide solutions with systems that provide more effective compliance protections.
- Medical Device – Device manufacturers will not fare as well with the looming 2.3% excise tax coming into play for 2013. I expect cost cutting and layoffs will continue as companies struggle with this increased burden. Smaller manufacturers who already under cost and compliance pressures will be looking for new lower cost GMP solutions that leverage industry best practices. These companies are also most likely to embrace the new breed of risk-based approaches to compliance and validation.
- Biotech – The investment landscape has certainly not returned to pre-2009 Venture Capital high. That said, the companies that are receiving funding appear to be strong as their products move through the drug approval process. Conserving cash and slow burn rates will demand careful consideration of how working capital is spent. Compliance will have to be maintained on minimal budgets, demanding cost effective solutions designed around their compliance requirements. Again, risk based approaches will become more prevalent.
It will be a challenging time that will require a focus on top priorities, innovative solutions and the continued hard work our industry is founded on. As an industry, I’m confident we will continue to succeed.