As 2024 unfolds, there are certain areas of focus in our industry that we should continue to watch. I will begin by highlighting key industry themes, followed by a discussion on developments in regions around the world, therapies, companies, and regulatory trends. It is starting off to be a great year for the pharmaceutical industry and there are a lot of things to keep in mind.
Reflecting on 2023, we observed some persistent themes. Sterile manufacturing and microbiology have continued to grow, with manufacturing and testing rising by 12 to 20% CAGR. Continuous manufacturing and digital transformation are changing the manufacturing landscape, prompting many generic companies to consider investing in new technologies to reduce downtime and address product quality issues from legacy equipment and facilities. This theme is critical as it directly impacts the quality of the medicines supply chain.
Another concerning theme we continue to see is the shortage of skilled labor. Manufacturers are likely hiring a different type of employee these days, one who requires specific education and training to be effective, proficient, and engaged enough to stay and advance their career in the industry. Like other sectors, pharmaceutical manufacturers are struggling to attract the right talent, with 80 percent of facilities having difficulty finding candidates with the necessary skills. Almost half of the leaders in manufacturing companies and human resource professionals in the pharma sector identify talent scarcity as a major pain point. Not only is the “Great Resignation” affecting staffing, but the expectations of new talent are also changing. These employees value work-life balance and increasingly prefer work at home options, reducing the pool of qualified candidates. Gone are the days when entry-level employees simply worked their way up within a company. New employees now expect different approaches to learning and growth. Integrating scalable tools like Virtuosi into training programs is one strategy, and there may even be potential for AI to replace certain roles on the production line, presenting a double-edged sword.
Competition is intensifying among the top 20 pharma companies. Notably, companies investing heavily in R&D are the ones to watch, as these investments are expected to shape the industry over the next decade. Increased economic pressures and the Inflation Reduction Act (IRA) are prompting consolidation among smaller firms unable to match this spending, allowing major R&D investors to make substantial gains and reduce competition. Specifically, significant investments are being made in R&D for Alzheimer’s disease, GLP-1/Obesity treatments, and immunology medicines, which have driven growth this year. These areas pose higher risks but face less commercial saturation. Furthermore, biologics—particularly Monoclonal Antibodies, vaccines, and Antibody-Drug Conjugates—are the largest markets.
Lastly, there is an increase in regulatory pressures and more active agency activity following Covid-19. The FDA, for instance, has moderated its issuance of warning letters in response to medicine shortages, although the number of extensive Form 483 observations is rising. These are the primary observations so far this year, from Redica.
In addition, the FDA is making a stronger push to implement the Quality Management Maturity (QMM) model in response to drug shortages. Carla Lundi, Senior Consumer Safety Officer at the FDA, states, “This gets the company to focus on continually improvement and enhanced supply chain reliability through strategic integration of business decisions and manufacturing operations with quality practices and technological advancements.”
To summarize, 2024 is proving to be both a remarkable and challenging year for the pharmaceutical industry. Challenges foster growth, highlighting the need for improvement and adaptation in certain areas. Aseptic processing and testing are expanding, reflecting a significant market focus. The ongoing skilled labor shortage and increasing competition are driving the need for enhanced critical thinking and problem-solving skills. And as always, maintaining a focus on global compliance and regulatory standards remains crucial as we continue into this year and beyond.
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