By Aiden Flynn, Exploristics CEO
VUCA (Volatility, Uncertainty, Complexity and Ambiguity) is a term that is increasingly being used in areas of leadership, and strategic planning to capture the unpredictable nature of living and working in a highly interconnected world. A VUCA world presents both challenges and opportunities that can impact all kinds of businesses including those involved in clinical research, with companies facing:
- Rapid innovation: Technological advancements can lead to groundbreaking innovations but can also quickly render existing business models obsolete. This phenomenon has been described as the Fourth Industrial Revolution by the World Economic Forum.
- Globalisation: While globalisation brings access to larger markets, it also exposes organisations to international risks and uncertainties.
- Information Overload: The digital age has inundated us with information and data, making it challenging to filter what is relevant and accurate.
- Changing Demographics: Demographic shifts, including an aging population and diverse workforce, add complexity to societal structures and markets.
The changing life sciences landscape
As life sciences operate at the cutting edge of therapeutic development, these global forces are already impacting its market landscape, causing upheaval in what has traditionally been a high margin environment. In 2021, the life sciences industry was valued at being worth £94 billion to the UK economy. However, by 2022 the global sector was already facing a tougher economic climate with:
- Projected returns on pharma R&D investment falling to 1.2%, the lowest level for 13 years. 
- The average cost of developing a new drug rising to US$2.3 billion. 
- Average forecast peak sales per asset decreasing to US$389 million. 
- Average cycle times (time taken for a new drug to pass through clinical trials to approval) increasing to 7.09 years. 
- UK biotech seeing a drop in financing of £2721 million.
The Impact of VUCA on the life sciences sector
Post-pandemic, the life sciences sector appears more exposed to the ravages of volatility, uncertainty, complexity, and ambiguity (VUCA). So how have these impacted the sector and what strategies are needed to navigate its challenges and unlock the opportunities it presents?
Volatility: Rapid and unpredictable changes that can occur in the market landscape
Lately, Pharma has faced difficulties in predicting demand for its products due to factors like shifting patient needs, regulatory changes, pressures on pricing by governments, disease outbreaks, and patent expirations. Initially slow to adapt to these challenges, the last decade has seen Pharma’s share in the industry-wide clinical pipeline dwindle, dropping from 40 to 20% (2). To remain at the forefront of healthcare breakthroughs, it has increasingly had to reach out to smaller biotech through collaborations, licensing or via merger and acquisition (M&A).
In contrast, smaller biotech and biopharma has been at the forefront of delivering rapid advances in new types of therapeutics and delivery systems such as mRNA vaccines, nanoparticles, and biologics (e.g., gene therapies, recombinant proteins, stem cell therapies and monoclonal antibodies). It has also been agile in embracing rapid digital innovation to bring new technologies into the biomedical space. Many of these are already transforming drug discovery and development with current trends including artificial intelligence (AI) and gene editing.
However, while being smaller has enabled biotech to be more responsive in terms of innovation, the volatility of a rapidly evolving clinical research landscape has meant that both Pharma and biotech have had to reach out to specialists to quickly scale key areas of development. This need for extending and integrating niche expertise has led to a growth of CROs (Contract Research Organizations) of all sizes offering cost effective specialist facilities and flexible capabilities in areas including data management and biostatistics (3).
Uncertainty: A lack of predictability in a situation creating decision-making challenges
Specialised technologies are emerging that could be applied to drug discovery, development and commercialisation in ways that are not yet fully understood. While large Pharma has recognised the value in investing in new technologies to accelerate discovery and development it has been uncertain what to adopt and how to best integrate it into its current processes. Concerns around investing in the wrong technology or being unable to implement it efficiently has led to a cautious approach to embracing new technologies.
To address this, Pharma is increasingly reaching to specialist CROs which have leaned into new technologies and methods for collating and leveraging clinical trial information. For example, CROs have played a key role in ensuring Pharma has been able to harness the opportunities offered by decentralised trials as the technology and infrastructure needed to support has developed (4). CROs have supported the implementation of decentralised trials by modifying protocols to incorporate remote data collection, patient-centric protocols, and virtual engagement with trial participants.
While technologically agile, smaller biotech can be financially vulnerable in an uncertain economic environment. Those seeking funding face challenges in attracting each investment round. This means small biotech are often working within current financial constraints as well as insecurity around future development plans. Failure to attract continued investment by choosing the wrong asset to develop or choosing the wrong way to develop it can sink even the most promising biotech.
Financial pressure in the biotech sector has been evident in the last year with a sharp drop in investment. This may be due in part to a recent focus by many Biotechs in developing platform technologies to support target discovery and validation rather than individual marketable therapeutic assets (2). Platform technologies are seen as higher risk, requiring large upfront investment with no guarantee of return. In contrast, Biotechs focused on developing therapeutics have delivered more priority drugs than Pharma while spending half as much to do so (5, 6).
Partnering with the right CRO early can support key decision-making for small Biotechs facing economic uncertainty and tight financial constraints. It can ensure projects are de-risked with extensively optimised designs for the greatest chance of success. While this requires some upfront investment in biostatistics, the dividends are robust evidence packages generated for projects, making it much more likely to secure further funding or win lucrative out licensing agreements.
Complexity: The intricate interplay between factors in a system
Both Pharma and biotech have had to grapple with the ever-increasing complexity of developing new medicines in an era of significant technological and scientific advances. Research has unlocked:
- greater in-depth understanding of complex biological mechanisms, offering more potential targets for new therapeutics.
- gene and cell therapies transforming what is now considered to be a therapeutic, breaking biological barriers and raising ethical issues.
- the bigger picture of biological interactions using mathematical modelling in emerging fields like systems biology.
- advances in manufacturing to synthesize these new treatment types or transform living material (e.g., biologics) into a medicine.
While this presents significant therapeutic opportunities, it has also made it more difficult to identify, gather, understand, and make decisions based on the many types of clinical and biological information now available.
For Pharma, numerous sources of ‘big data’ can now be drawn on to inform decisions for every part of the business, ranging from operations, drug discovery, R&D, clinical trials, and precision medicine to commercialisation. Moreover, facing increasingly complex projects generating expanding volumes of data, Pharma is under growing pressure to make trials more time and cost-effective. Partnering with the right CRO improve efficiency with niche expertise and technologies that can help address key development barriers such as clinical trial recruitment, while offering regulatory clarity for studies evaluating new and more biologically complex therapies.
For Biotech, CROs can bring in the specialist expertise required to leverage complex and often messy data more effectively from multiple sources, smoothing key transition and fund-raising points in the development path of key assets. Failure to do so can mean running out of money even with highly promising treatments. Consequently, in the face of a rapidly evolving clinical research and data landscape, both pharma and biotech are increasingly turning to CROs for their targeted expertise, global reach, data capabilities, and cost-effective technological solutions to navigating the increasing complexities of drug development.
Ambiguity: Difficulty pinpointing meaning where information is incomplete, contradictory, or open to multiple interpretations, making it hard to ascertain risk.
Ambiguity not only impacts uptake and investment in innovation , but it also affects returns on R&D for Pharma and Biotech. Ambiguous clinical trial results make development decision-making hard and can scupper projects, leading to:
- The unnecessary failure of promising therapeutics
- The need to repeat trials
- Time spent doing ad hoc analyses
This is expensive and time consuming. Unsuitable study design is easily avoidable by partnering with the right CRO early in the development process who can support the implementation of the estimands framework during the design process. This ensures that the objective of a clinical trial is aligned with its design from the outset and is recognised by Regulators as a highly effective way to reduce ambiguity and improve development efficiency.
Strategies for Success in a VUCA World
In a post-pandemic VUCA world the life sciences industry must work harder to remain resilient to its challenges and while staying open to its opportunities. To navigate VUCA clinical teams must:
- Develop a culture of adaptability and be open to trying novel approaches and learning from failures.
- Build-in strategic foresight, anticipating different potential scenarios and developing contingency plans to prepare for these and so enable better decisions under uncertainty.
- Invest in continuous learning to keep abreast of developments in a fast-moving sector where knowledge becomes obsolete quickly.
- Foster collaboration and diverse perspectives in development teams to leverage the different problem solving skills that come from varied experiences and backgrounds to better navigate complex development challenges.
- Prioritise data-driven decision-making, leveraging available data and analytics to make evidence-based decisions in uncertain situations rather than relying on previous experience. Data can provide insights.
- Adopt more agile leadership that emphasises flexibility, responsiveness, and the ability to pivot when necessary.
- Prioritise ethical values and principles in ambiguous situations. A strong patient centric ethical foundation can guide you when the path is unclear.
Capturing the opportunities
The VUCA world challenges us but it also offers opportunities for growth, innovation, and adaptability. With the right CRO on board, Pharma and biotech can not only survive but thrive in this dynamic environment.