The Life Sciences industry operates in one of the fastest and most innovation-driven environments. 2018 has witnessed significant developments in technology and therapeutic practices. A number of new cell and gene therapies – including the first two CAR-T therapies for cancer – received EU approval, and both disruptive and ‘new mainstream’ technologies (such as AI) made significant steps forward into the sector.

The pharmaceutical and medical device sectors are also among the most heavily regulated. Life Sciences companies face significant challenges in managing regulatory compliance in an environment where regulation constantly evolves. Moreover, the sector moves so fast that it is hard for regulation to keep up with the pace of technological development.

The competing interests of different stakeholders – including industry, governments, regulatory agencies, the scientific community, patients and public payers – in pursuing different objectives – including innovation, public health, and public expenditure containment – generate significant tensions that make the sector extremely dynamic. What can we expect to see during 2019?

1. Technological and therapeutic progress

2019 will be the scenario of significant advances in therapeutic technologies. Several companies currently developing cell and gene therapies and gene editing techniques are likely to receive positive clinical results and new regulatory approvals. While the focus will likely remain on rare diseases, 2019 might start showing the potential of these technologies in the context of more prevalent diseases as well. We are also likely to see advancement of precision medicine approaches in oncology and beyond. These developments will inevitably bring new ethical challenges, which may impact patentability and regulatory considerations.

New digital technologies, such as artificial intelligence, virtual and augmented reality, and blockchain will continue to make inroads into the Life Sciences sector, both in relation to (bio)pharmaceuticals (e.g., R&D and drug development) and medical devices (big-data based diagnostic apps and corrective devices, surgery tools and procedures, etc.). As the application dates of both the new EU Clinical Trials Regulation and Medical Devices Regulation are fast approaching, 2019 will be a key year for the industry to position themselves and these technologies in view of the upcoming regimes.

Altogether, the aforementioned technologies will bring us one year closer to the ‘future of medicine’, where the traditional model based on ‘on-size-fits-all’ blockbuster products and mass healthcare services will make way for more personalized medicine, where treatments will be tailored to the specific needs of each patient, as enabled by the availability of large amounts of well-managed data and sophisticated, accessible precision technologies.

While the above frontier technologies will certainly be under the spotlight, we can expect significant other developments in various therapeutic areas in 2019. One of them is certainly the use of medical cannabis. Significant developments took place in this area in various EU Member States during the last year. Not much can be expected to happen in Italy during 2019, but this is definitely something to keep an eye on.

2. Regulatory reform

The Life Sciences industry operates within a constantly evolving regulatory landscape. Among the many novelties expected for 2019, the following three are worth mentioning here:

Revision of the EU pharmaceutical innovation incentives – In 2018 the European Commission proposed a revision of the SPC Regulation in order to introduce an ‘export manufacturing waiver’, which would allow EU-based companies to manufacture a generic or biosimilar version of an SPC-protected medicine during the term of the certificate if it is exclusively intended for export to a non-EU market where protection has expired or never existed. The proposal is still undergoing the legislative procedure and we can expect a revision to be adopted during 2019. This initiatives follows the 2018 revision of the definition of ‘similarity’ under EU orphan rules and a number of other initiatives aimed a broad reform of the EU pharmaceutical innovation incentives system. Much is expected to take place during the coming year.

New clinical trial rules – The new EU Clinical Trials Regulation (‘CTR’), adopted in 2014, will apply six months after the European Commission will have published a notice confirming the functionality of the EU online portal and database introduced by the CTR. 2019 could finally be a decisive year during which all the remaining adjustments and tests may be conducted. According to the latest available EMA information, the system could indeed be ready by the end of 2019, and apply from mid-2020 (at the earliest). Meanwhile, EU Member States have been preparing by adopting national complementing legislation. In this respect, the Italian government is supposed to adopt a national legislative decree by February 2019, in accordance with a delegation law of January 2018. If it does not make it in time – as it is likely to happen unless an extension is granted – Italy will be at a significant competitive disadvantage compared to other EU countries in terms of attracting pharmaceutical R&D. Meanwhile, industry should prepare for the application of the CTR by updating their internal procedures and clinical trial related documentation.

Upcoming Sunshine legislation in Italy – Following the example of the US and other EU countries (and various existing self-regulatory measures), Italy is on its way to adopting its own version of the ‘Sunshine Act’ during 2019. A bill was presented before the Italian parliament in 2018 and is currently going through the legislative process. If adopted, the Act will require Life Sciences companies to report and publicly disclose specific information concerning their financial relationships with a broad range of healthcare actors.

3. Pricing pressures

In a time of uncertainty around pharmaceutical pricing and reimbursement policy, where budget-constrained governments have adopted a number of initiatives in the attempt to limit public pharmaceutical expenditure, 2018 has witnessed various challenges to the rule of law and the integrity of pharmaceutical regulatory environment in the interest of economic considerations.

2019 will be a tricky year from this perspective. The 2019 Italian budget law introduced a number of questionable initiatives concerning price negotiation and pharmaceutical reimbursement policy, which undermine the level of certainty and predictability that an attractive Life Sciences economy should guarantee.

New technologies are emerging at full speed, showing the potential to transform the future of medicine, but traditional pricing models are unfit for accompanying this transformation. As Novartis CEO Vas Narasimhan put it: “we face a fundamental challenge: how to pay for these therapies and make them available to patients in need“. Outcome-based pricing models have already shown to be successful. Moving forward, new pricing models must increasingly be based on value, for the patient, the healthcare system, and society at large. This will require innovative minds to get together and a good amount of out-of-the-box thinking.

The auspice for 2019 is therefore that lawmakers, instead of making false moves, work to create an environment where stakeholders can brainstorm and design innovative pricing and reimbursement models that could serve the technically sophisticated medicinal products of tomorrow, both for rare diseases and beyond, for the ultimate benefit of patients and their families or social networks.