The Life Science sector post-Covid 19
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To combat the current and future pandemics, preparedness and response present essential global public good. The coronavirus pandemic has exposed some of the fragility in globalisation and the risk posed to public health and wellbeing. It is important now more than ever for the world to work towards rigorous cooperation in healthcare systems, access, and delivery. The interconnectivity of the world makes this an important aspect of preparedness and readiness for future public health challenges.
According to the OECD, despite increased mobilisation after the 2014-2016 Ebola crisis, investment in pandemics preparedness and response has been insufficient. Countries must constantly review and evaluate investments in this regard; spending on research and development, education and awareness, access to credible, verifiable information and communication systems, ethical use of social media platforms and their role in public health and wellbeing, Lifescience and the healthcare sector.
Sharing and using technological expertise cannot be overemphasised in this instance. The impact and pressure that the Covid -19 pandemic has placed on frontline workers in the healthcare sector and other essential services are all too glaring considering the statistics on the rates of infection and fatalities among workers in these sectors. The response needs to be premised on a joined-up collaborative approach, as this pandemic has shown, all sectors are impacted by a public health crisis. To provide cover and the necessary back up to the public and frontline workers, in particular, the role of the Life Science sector is fundamental in preparing and responding effectively to global pandemics.
As the coronavirus pandemic is lowering the demand for chronic treatments, reducing the range of healthcare providers, and disrupting global supply chains and internal business operations, there is a massive burden imposed on the corporate environment primarily due to the effect on employees’ wellbeing. For instance, the medical device sector has been impacted profoundly due to the consequences of the pandemic on-demand in the healthcare sector.
With the increased demand for critical equipment such as PPE (personal protective equipment), ventilators, and testing kits which subsequently led to shortages in the availability of these devices, medical device companies have had to work diligently to maintain and meet the increasing demands of healthcare providers. Some medical device markets have taken a place of significance as a result of unprecedented demand for their products while others have had to pivot and refocus operations towards the production of relevant and in-demand medical materials and equipment. This is one of the consequences of cancellations and reductions in inpatient surgeries and procedures. In the quest to adequately address the demand for hospitalisation especially in the ICU and Coronavirus-related hospital services, hospitals across the world have postponed or cancelled, many elective operations considered to be non-essentials or urgent. According to the world economic forum in its publication on the impact of the coronavirus on medical care (27/5/2020), the following statistics are projections on the impact of Covid 19 on health care provision.
- 28 million elective surgeries across the globe may be cancelled during 12 weeks of peak disruption during the COVID-19 pandemic.
- The study indicates that each extra week of disruption is associated with 2.4 million cancellations.
- 38% of global cancer surgery has been postponed or cancelled.
- A backlog could take 45 weeks to clear.
This of course has resulted in reduced demand for medical devices and equipment relevant to interventions and treatment of various medical procedures.
The Life science industry has so far responded robustly in tackling the challenges posed by the pandemic. Leadership has and will continue to play a significant role in ensuring that the sector rises to these challenges and maintain business sustainability. To this end, management is key; job design and evaluation are fundamental. The world is faced with a new normal where behavioural changes are demanded and imposed on society, businesses have to make allowances to accommodate this new way of life. For the life science sector and indeed businesses in general, leadership needs to be ever more strategic and designed to oversee possible scenarios during and after the pandemic. These strategic actions need a cross-functional and companywide approach, hence not only management-driven but must also recognise and create the opportunity for employees’ buy into the change process. To this end, department leaders have to identify and explore the current impacts of the pandemic on their sections and start to work on strategic action plans going forward.
The Covid 19 pandemic impacts affect both short- and long-term business strategies. Leaders must ask the hard questions; what changes will exist in this new business environment? What new expectations will employees, stakeholders, and investors have? Scenario planning is one of the ways that leaders can plan for and manage uncertainty. This strategy will help identify probable but uncertain future scenarios allowing the organisation to assess the likelihood of each scenario and identify signs about which scenario is likely to emerge. The implications of each scenario need to be assessed and action plans developed to manage their impacts on the business. This approach helps the organisation identify the resources and actions required to keep the business afloat and thriving. It is important to set up crisis command centres to enable connectivity across organisations and effectively manage the impacts of identified scenarios on the business. Long term plans also have to be made alongside immediate planning, management will have to identify what aspects of the current scenario are going to be permanent and how the organisation can adapt and align these to its business strategy, this will require management to rethink growth strategies with a radically different mindset. For instance, predictions about future trends are wide-ranging but there is a consensus that remote work, reduced corporate travels are here to stay.
Sales and marketing actions
The life science sector will need to develop strategies to manage the sales and marketing of their products considering limitations on mobility and ability of sales representative to effectively access target markets and clientele. They will need to be creative and innovative in maintaining the current customer base and possibly identify and penetrating new markets. Marketing strategies have to be dynamic and innovative considering limited accessibilities in the B2B and B2C context. With telehealth emerging as a healthcare intervention method, life sciences companies need to intensify efforts to incorporate this channel into their business. The use of technology in this area will need to be explored and organisations in the sector will need to develop strategies that will allow for access through the use of digitalisation. There is likely to be more use of, and investment in remote accessing, virtual detailing, and conferencing opportunities to maintain growth.
Financial management action
Finance chiefs while looking to increase margins will need to continue to explore areas of context-driven effective financial models. They need to build a scenario-driven dynamic financial model. The impact of the pandemic on earnings will be evaluated and realistic actions are taken to maintain cash flow and profitability. The key to this is the ability to leverage on the organisations’ resources by implementing equitable and cost-effective actions. The uncertainty around how long this pandemic will persist increases the complexity of developing a targeted financial response. Organisations need to implement a proactive approach in assessing risks and vulnerability from both an operational and a financial standpoint. The current public health crisis requires decisive actions to limit risks and prepare for various recovery scenarios and consequent impacts on liquidity.
Supply Chain actions
Maintaining production and service delivery is key to the supply chain. Supply chain leaders will explore alternative sourcing and suppliers. In recent years organisations have been investing in sustainable sourcing, this can be built upon given current circumstances. It is expedient to control sales and operations planning to enhance manufacturing and distribution, thus avoiding a massive working capital upheaval. The impact of the pandemic on travel and access has exposed challenges and risks posed by the concept of “just in time” manufacturing as single-threaded and just-in-time supply chains. To counter this, stocks of critical parts and materials will increase. For major pharmaceutical companies, safety stocks of key drugs and reagents have always been a priority. Post-Covid 19, the industry will need to be prepared to balance supply chain leanness with resilience. There will likely be a restructuring generally of supply chains for strategic products such as drugs, diagnostics, personal safety equipment, food, and other essential materials. This will be largely driven by regulations and actions taken by national authorities to counter the effects of the pandemic.
Human Resource management actions
HR leaders have played significant roles in organisation’s rapid response to this pande
mic, by taking responsibility for workforce engagement, productivity, and resilience. Planning, communication, and managing the issues associated with Covid-19 and the impact on their employees is central to the HR role in the current public health crisis. HR’s role will involve redefining HR’s strategy, firmly supported by defining the value of human capital and adapting to the projected new normal as it affects work going forward. In the short term, for instance, HR leaders will facilitate effective employee communications, work across other functions to develop and maintain health and safety protocols such as the sanitisation of infected locations and how to resume production without backorders of high-demand products at the same time ensuring minimum risk to employees. In the long term, HR response will need to move from a reactive approach to a proactive approach with an emphasis on recovery and sustainability. This will require extraordinary focus and coordination of the HR functions with buy-in from management and line managers. HR needs to start now planning for the
post-pandemic scenario by exploring new actions that will guarantee effective HR management and employee engagement. This is a transformational time for HR and like other departments and functions, it must leverage resources and technology to make for a simpler and effective implementation of HR strategies. In a nutshell, HR actions need to be proactive enough to manage continued disruptions and reflective enough, to respond to the lessons learned from the impact of the current public health crisis.
No doubt this pandemic will continue to test the resilience of businesses and organisations. Considering previous economic recessions, the life science industry has been able to weather the storms of uncertainty and this is largely due to nature and demand inelasticity of products and services of this sector. However, with the impact of the pandemic on societies and governments, the Life science companies will have to take critical steps to manage the short to long-term impacts of the Covid 19 pandemic on the industry. Actions must not only be profit and growth-driven, but must at their core include responses and preparedness for the next public health crisis.
Clementina joined InterSearch Ireland in November 2016 and is one of the company’s Executive Search Researchers. With a combination of a good background in academic research and interest in industry and organisational leadership, Clementina works with the InterSearch Ireland Public Sector Division to identify relevant talents and facilitate the establishment of mutually beneficial relationship between prospective leaders and their desired organisation.