Increasing Revenue and Decreasing Costs as Life Sciences Companies Emerge From COVID-19
As we emerge from the COVID-19 pandemic, life sciences companies need to resume business in a controlled, careful, and thoughtful manner. They also need and want to conserve cash, even as they recognize that spending cash may provide a long-term advantage.
In an effort to smooth the road for life sciences companies to emerge from COVID-19 with their 2020 resources and goals intact, we offer several suggestions to consider both now and in the coming months as we seek to put COVID-19 behind us.
Take Advantage of the Connectors
The life sciences industry is home to senior thought leaders with robust contact lists. These connectors can be a resource hub to circumvent issues or advance your goals during these days of uncertainty. One of Buchanan’s strengths is our ability to help clients connect the dots, through every day client interactions as well as larger events we hold, such as our networking meetings in San Francisco in January during the annual JP Morgan Healthcare Conference. Our mission is to make ideas and opportunities a reality for our clients. Though the pandemic has forced the industry to remain socially distant, we remain in close contact with those who can truly help in a crisis.
Consider Expanding Your Product Lines
The pandemic has shined a bright light on the life sciences industry—both its strengths and weaknesses. Now might be the time to consider a product acquisition. Many companies are highly leveraged, and accretive asset acquisition may be possible. Similarly, the time could be right to consider bringing back an older discontinued product, acquiring the rights to a discontinued product, or repurposing an existing product through a 505(b)(2) new drug application (NDA). In any case, companies need to consider the time, cost investment, and return of such a move; prepare a plan; identify current and future roadblocks; and prepare to tell the story of how the move will bring value to the company.
Consider New Sources of Revenue with Allied Technology that Fits within Your Distribution System
There are other less-considered and nonconventional ways to increase company revenue as well as funding. For example, companies both inside and outside of the life sciences industry are manufacturing personal protective equipment (PPE) for the COVID-19 response. FDA continues to issue and update Emergency Use Authorizations (EUAs) for various pandemic-needed medical devices and therapeutics. So offering a COVID-19-related product can provide a new revenue stream. Likewise, looking to alternative funding sources such as the Biomedical Advanced Research and Development Authority (BARDA) could result in federal funding for a pandemic-related product development program.
Consider Linking with New Technologies
Another potential opportunity is to link with telemedicine companies, testing companies, medication therapy management programs, or home monitoring companies during the pandemic and beyond. Considering these options can help a company deal with the new changes in the healthcare delivery systems caused by COVID-19, though any arrangement should be structured to be in compliance with the fraud and abuse laws relevant to the provision of healthcare.
Blocking and Tackling: Supply Chain Logistics
Certain business fundamentals remain constants even in uncertain times, including the need for robust supply chains. New ideas and proposed legislation are emerging to address the vulnerabilities in the supply chain that the pandemic has exposed, including sourcing active pharmaceutical ingredients (APIs) and finished dosage forms from abroad. Global exports and imports may be impacted by countries trying to secure or maintain goods for their own citizens. Therefore, shoring up your supply chain and considering potential changes should be top of mind as we emerge from COVID-19.
Take Advantage of the Shifting Safety vs. Effectiveness Equation
COVID-19 has led FDA to shift the safety vs. effectiveness equation by accepting more risk. FDA has refined its understanding and has become more accepting of additional sources of clinical benefit information. For example, information based on use under a EUA could bolster an eventual investigational device exemption (IDE) or an investigational new drug application (IND). Real world data (RWD) and real world evidence (RWE) are likely to become larger parts of this equation as well. You can utilize this shift to your advantage for products that are in development, as well as those that are approved. You may also want to emphasize the role your products have in facilitating treatment and at-home monitoring as well.
Shifts in Healthcare Delivery
According to Nobel Laureate Paul Krugman, recovery from the Great Recession of a decade ago was hindered by the fact that dozens of states and many municipalities require balanced budgets. This requirement forced the search for cost savings wherever possible, including in healthcare delivery. These issues will once again be top of mind for governments in the coming months and years, including the expansion of telehealth options. So now is the time to think about how to position your existing and future products before Pharmacy and Therapeutics (P&T) Committees, commercial payors, and government payors as they contemplate how to address future pandemics and control costs. Given that many physician procedures and activities now have additional reimbursement codes, it is critical to consider how formulary placement, coding, and reimbursement of your products will be impacted by these shifts.
By remembering the fundamentals while also thinking creatively, many life sciences companies will be poised to emerge from the COVID-19 pandemic and finish 2020 in a position of relative strength. To achieve this goal, however, planning and execution should begin now.
For more cutting-edge perspectives on legal and business implications of COVID-19, visit our COVID-19 resource center.