LSHC Horizons Brochure 2024 - Flipbook - Page 2
Hogan Lovells | 2024 Life Sciences and Health Care Horizons
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Welcome
While economic factors, including the high cost
of capital, continue to keep our clients up at
night, we also see signs of optimism in 2024.
Against this fiscal backdrop, significant recent
regulatory changes and those on the horizon will
impact supply chain planning, commercial launch
preparation, and pricing and reimbursement,
making a cross-border perspective even more
critical for achieving long term business goals.
As our teams discuss, the global transition from soft law to
hard law will keep Environmental, Social, and Governance
(ESG) initiatives front and center in 2024 and beyond. The
potential environmental impacts of supply chain planning
now place companies at risk for regulatory and civil law
penalties. While many of these regulations are industry
agnostic, their impact will nevertheless be significant for
clients across our sector. Life Sciences and Health Care
(LS&HC) companies must also stay up to date on
sector-specific developments. A new environmental
risk assessment as part of a larger proposed European
pharmaceutical law package, actions aimed at strengthening
the pharmaceutical supply chain in the U.S. and elsewhere
and global initiatives aimed to improve diversity in clinical
trials are but a few examples. Manufacturing reliability – for
pharmaceuticals, (traditional) medical devices, and now,
increasingly, for radiopharmaceuticals, precision medicines,
custom/customizable medical devices, and for AI-enabled
products – are key areas requiring attention to agreements,
export controls, appropriate corporate and tax structures,
and an awareness of the risks from missteps that can result
in an increasingly global economy.
Digitalization also continues to generate both opportunity
and risk, driving innovations in AI, virtual health solutions,
telehealth products, and related cybersecurity measures,
while raising vexing questions on how to safely and
appropriately access patient health data, protect patient
privacy, and manage social media. The November 2023
signing of the Bletchley Declaration on AI signifies that
jurisdictions globally are committed to safe and responsible
AI. However, local approaches vary, with some jurisdictions
placing higher scrutiny on “high-risk” uses, including many
health and medical applications. Again, LS&HC companies
are uniquely positioned and must grapple with both sectorspecific and industry agnostic guidelines. Understanding the
interplay between multiple regulatory and legislative efforts
will be crucial to success for developers and end users alike.
In the transactional space, we also see increasing complexity,
as partners consider alternative funding options to account for
long development timelines and allocation of manufacturing
risk for bespoke therapies. While investors continue to take a
cautious approach towards all types of deal making, an uptick
in activity as we enter 2024 hints at the possibility of a more
robust life sciences capital markets, M&A and partnering
market in the coming months. However, innovators with
early stage pipelines (especially pre-clinical assets), may need
to advance further into the development process with their
own de-risking strategy before traditional players will partner
or invest. Regional opportunities for government-backed
research and other sources of non-dilutive funding may prove
to be of strategic interest for companies with particularly
innovative technologies.
LS&HC companies are also disproportionately affected by
specific issues in each geographic area, where new legislation
and regulation setting precedent locally, with regulators
in other markets likely to follow. In the United States,
impacts of the initial drug price “negotiations” under the
Inflation Reduction Act of 2022 (IRA) will have broader
implications for product lifecycle management and pipeline
valuation. FDA also appears to be gearing up for changes
across technologies as varied as psychedelic therapies,
over-the-counter drugs, and skin substitutes, while drug
patents and pricing are attracting scrutiny across agencies.
The UK continues to promote a progressive regulatory
environment supporting innovation and accelerated access
to drugs and medical devices post-Brexit. In the EU, our
LS&HC clients are also navigating changing legislation with
proposals for new pharmaceutical regulations as well as local
implementation of, among others, the AI Act and European
Health Data Space. Companies are also tracking the early
cases before the European Unitary Patent Court, which has
already proven an attractive pathway for some life sciences
litigants. These themes also carry over to Asia-Pacific
markets, where we see fast-track routes for drug marketing
authorization and incentives for research and development
of cell and gene products, coupled with continued scrutiny on
health care corruption. Companies with current – and future
– interests in these regions would be well advised to factor
these into their plans ahead. We are proud that our truly
cross-border and cross-functional teams are here to help.
These are just some of the current and evolving trends that
are shaping the future of the industry, which we discuss in
the following pages. The Hogan Lovells global Life Sciences
and Health Care team – comprised of more than 500 lawyers
around the world who support more than 1,000 clients in the
industry – stands at the ready to provide you with creative
strategies for your most promising opportunities and
integrated solutions that protect and support your business
when issues arise. We hope that you find our view of the
horizon thought-provoking. We look forward to working
together, and hopefully seeing each other, again soon.
Global Co-Heads, Life Sciences
and Health Care Sector
Steve Abrams
Partner, Philadelphia
Lynn Mehler
Partner, Washington, D.C.
Jane Summerfield
Partner, London
