We spoke to Darren Jones, CIA, principal and life sciences consulting practice leader at Baker Tilly, about some of the important developments that life sciences companies should be considering as strategic plans are set for 2022 and beyond. In addition to this interview, Baker Tilly provided us with a complimentary whitepaper that dives further down into some of these unique challenges, as well as their potential risks and corresponding opportunities. You can access the informative whitepaper here.
What major impacts will the life sciences industry see as more Americans retire and are covered by Medicare?
"Because reimbursement for Medicare is estimated to be a fifth or sixth of what commercial plans pay for the same drugs, pharmaceutical and medical device manufacturers who are already operating under tight margins will need to pass on those lost revenues to commercial plans. With tighter operating margins, we will see more payers pressuring pharmaceutical manufacturers to guarantee their products improve patient outcomes, causing a greater need for life sciences companies to focus on real-world evidence (RWE) and healthcare economics outcomes research (HEOR) in their overall market access strategy."
What impact will be had on traditional commercial distribution strategies as drug and treatment options continue to become more specialized?
"The costs for pharmaceutical manufacturers to warehouse and distribute their products can significantly hurt a company’s bottom line, especially for smaller companies that specialize in niche markets. With the traditional distribution model no longer makes economic sense for these types of products, we will start to see more manufacturers establish closed-distribution networks through vertically integrated hub and specialty pharmacy operations to save on cost. This will cause some medications to only be available through mail-order pharmacies, significantly reducing distribution fees by cutting out the middleman, but also necessitating carefully crafted patient support programs to ensure access."
How will upcoming legislation and regulations affect life sciences companies beyond compliance?
"It is with good reason and no surprise that the life sciences industry is heavily regulated. As oversight of the industry continues to grow (e.g., the revised PhRMA Code on Interaction with Health Care Professionals, the Transparency in Coverage rule, the No Suprises Act, etc.), companies will need to ensure they are complying not only to avoid penalties, but in order to have a “seat at the table” with providers and payers who are increasingly having higher ethical standards, causing life sciences companies to look at commercialization strategies through a lens of compliance."
Just for fun…What profession other than your own have you always wanted to attempt and why?
"I would have loved to be an elementary school teacher or youth basketball coach. Similar to helping our clients and internal staff with educational webinars and seminars, I love educating and teaching people about best practices and the latest trends in the industry. I also love working with kids and teaching them the importance of sportsmanship, both on and off the court."
What is your favorite city for business travel and why?
"My favorite city is across the pond in London. I consider it to be a convenient central hub of activity with easy access to all of Europe that also has an active life sciences scene and capital markets segment that fuels the industry. It is a welcoming atmosphere for business travelers and non-natives that brings out a diverse group of people, which rivals New York where I currently live."
Darren Jones is a principal with Baker Tilly and leads the life sciences consulting practice group. Jones has a 20-year career in audit, compliance and consulting where he has supported a diverse global portfolio of clients spanning all stages of maturity.
Baker Tilly helps life sciences companies address the unique needs and opportunities at all stages of the business and product life cycle. From assurance and tax to advisory and support solutions, their integrated team of industry specialists collaborate to provide practical, actionable recommendations and analyses that can be easily operationalized.