Predicting Next Year’s Life Sciences Outlook: Med Devices, Biopharma
Deloitte’s 2024 Life Sciences Outlooks predicts medical device and biopharma trends, focusing on digital transformation, GenAI, and adopting digital health tools.
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- For the second year, Deloitte Life Sciences leveraged its network of life sciences and healthcare executives in the industry to compile a document with life sciences outlooks for the next year. Recruiting a relatively even ratio of healthcare and life sciences professionals, the company surveyed over 120 executives. Among life sciences participants, it divides the respondents into two categories: biopharmaceutical and medical technology executives.
“What's interesting this year, more so than last year, is that stark differences are seen in the responses from our med-tech clients, our medical device manufacturers, versus our biopharmaceuticals and what came out as the top themes,” Pete Lyons, National Life Sciences sector leader, Deloitte Consulting LLP, told LifeSciencesIntelligence.
2024 Life Sciences Outlook
Lyons emphasized three primary outcomes that Deloitte discovered through this survey:
- Digital transformation
- Generative AI (GenAI)
- Adoption of virtual and digital health tools
Digital Transformation
One of the first themes the report focuses on is digital transformation. Lyons explained that medical device companies are continuing to digitize their organizations, including supply chains, finance, and customer-facing systems.
“As we look at the level of investment there and compare the two sectors, med device is a little bit further behind than biopharma in some of those spaces,” he revealed.
According to Lyons, Deloitte identified another area they call “connected care” in which medical device manufacturers have focused their digital transformation efforts. Connected care refers to the interconnected technology ecosystem, including equipment and client-facing tech. When optimized, connected care can yield a greater value than independent tech.
GenAI
“In my 25-plus years of consulting, I've seen a lot of new technologies and emerging technologies, but I haven't seen any with the interest or velocity of uptake that I've seen around GenAI,” Lyons revealed. “I can't have any conversation with the client or internally at Deloitte without this coming up as a potential game-changer from a technology perspective.”
Although both the medical device and biopharma segments surveyed for this report note that GenAI will significantly impact industry practices, the level of acceptance varies slightly between segments.
“There's probably a little more trepidation in the med device segment,” Lyons noted. “Biopharma's being a little more aggressive on it than seen med devices.”
Although no definitive data justifies this discrepancy, Lyons makes several hypotheses. He poses the idea that the investment profile of pharma companies allows them to take more risks in emerging technologies.
The other factor that companies consider is how GenAI and other technologies can impact research and development (R&D). For medical device manufacturers, the R&D is more focused on product engineering, which means incrementally improving existing products or engineering new products.
Conversely, biopharma R&D requires analyzing large datasets to determine a particular target or therapy.
“AI and the promise of GenAI is about [taking] enormous amount of data trying to synthesize that to come to insights and outcomes that may not have come before or would've taken a lot longer without this kind of technology,” Lyons explained, implying that is why biopharma may be more willing to incorporate AI than medical device spaces.
Virtual and Digital Health Tools
Lyons noted that the third trend focused on adopting virtual health and digital tools. “That's at the core of what medical device companies are trying to do,” he emphasized.
As these companies continue to adopt virtual health and digital tools, they must develop protocols or policies to navigate the ever-changing technology landscape.
Inflation
Beyond the three primary points in this article, Lyons noted that understanding the economy and inflation will also be critical for life sciences companies in the coming year.
“Many folks anticipated that inflation would continue to increase, and we saw that inflation dropped, right? So it was 4.9% in 2022 and 3.6% this year,” he noted. Despite these changes, he stressed that economics will still play a critical role in the coming year.
Privacy and Security
LifeSciencesIntelligence asked Lyons to describe how life sciences companies adapt their privacy and security protocols to keep up with industry-level advancements.
“Not too long ago, the US government put out some guidance, at least for government use of AI and their expectations,” revealed Lyons. However, no regulatory action has provided explicit insight into how to use AI or how not to use it.
Although only 13% of biopharma organizations revealed that they would leverage AI to enhance consumer trust and engagement, Lyons maintains that it is a critically important factor.
“There's still a lot to be determined regarding how to use this in an ethical and vital skill,” Lyons added.
As more information comes to light, companies must continue to adjust their privacy and security practices to protect patient data and foster trust between themselves and their clients.
Conclusions
Despite all of the challenges posed by new developments and regulatory opacity, the survey revealed that companies are optimistic and excited about the future of this field.
“There does tend to be pretty broad optimism about life sciences performance outlook, " Lyons commented. “Overall, 67% of the respondents suggested that they are optimistic about performance in 2024. Even more so, the optimism outlook in the medical device space was up to 71%.
Companies can use this report to understand the industry’s primary goals better. As the field develops, Lyons notes that this data can help guide future innovations and technology integration.
“It provides a fantastic summary of the issues that matter most to the companies in life sciences,” he added. “[Looking at the] survey and the trends that we ask about, all of them are important in their own right, but understanding a level of priority of what these organizations think is most important is really where the value is.”
