This week’s host and Aon’s North America Chief Operating Officer Kevin Johnson is joined by Partner and Co-Lead, Global Life Sciences Vertical, Aon, Meaghan Piscitelli and Co-Lead, Global Life Sciences Vertical, Aon, Lars Sørensen for a conversation about the various ways Aon is helping companies within the life sciences sector become more resilient and agile as they navigate volatile market conditions. They also discuss how companies can use this period of economic uncertainty to continue to innovate for their clients.
Additional Resources:
What’s Ahead for Life Sciences? These Five Trends Are Shaping the Industry
Aon’s 2021 Global Risk Management Survey
Tweetables:
Voiceover:
Welcome to “On Aon,” a podcast featuring conversations between colleagues on, well, Aon. This week, we hear from Meaghan Piscitelli and Lars Sørensen on the state of the life sciences industry. And now, this week’s host, Kevin Johnson.
Kevin Johnson:
Good day colleagues. My name is Kevin Johnson and I've been a colleague at Aon for 11 years and currently serve as Aon's North America Chief Operating Officer. Really excited to be here today to talk with you about life sciences, but with me today are Meaghan Piscitelli and Lars Sørensen. Our discussion today will take U.S. through how Aon is helping companies within the life sciences sector become more resilient and agile as they navigate a volatile market and challenging economic conditions while continuing to deliver quality and innovation to patients.
Meaghan has been at Aon since 2013 and currently serves as a partner with Aon and co-leader of Aon's Global Life Sciences Vertical. Meaghan has unique insight to today's topic. Prior to joining Aon, Meaghan spent over 15 years working in-house at a few biotech and pharmaceutical companies within their human resources and oncology operations departments. Having this client perspective adds great value in ensuring our insights, solutions align with clients' needs.
Additionally, her time at Aon has been mainly focused on strengthening our life science client relationships within a human capital solutions team, and also leading the global cross-solution line life sciences efforts.
Now Lars, Lars has been at Aon for 20 years and currently serves as Aon's global co-lead for the Life Sciences Vertical. Lars has, throughout his career, been dedicated to servicing multinational life sciences clients with a specific focU.S. on industry client needs when broking complex insurance placements. Having a legal background and experience from both underwriting and broking, Lars is in a unique position to better advise clients within the life sciences industry to make better decisions.
Thanks for being here today, Meaghan and Lars. Before we get started, I'd like to ask you both a quick warmup question. Can you both please share with our listeners what excites you most about your role at Aon? Meaghan, why don't we start with you first?
Meaghan Piscitelli:
Sure. Thanks so much, Kevin. I'm really glad to be here. It's really a true honor to have the opportunity to speak about an industry that we get to professionally serve, but also that we're personally passionate about. To answer your question about what excites me most about my role at Aon is probably the privilege to support clients that are truly changing the world. Two quick examples I would love to give is first, back when I actually originally started in the biotech world, my mom was actually diagnosed with stage four lung cancer and she was placed on a variety of chemotherapies and products from the industry in which I worked. Even one product from the company I'd been working for at the time. Secondarily, the industry was really in the spotlight upon the onset of the pandemic and the quick response and the action taken by many companies in our vertical was really amazing to see. And having the benefit of helping these companies continue to shape medicine and technologies to improve the lives of patients is really one of my core motivators to do the very best job I can do here.
Kevin Johnson:
Awesome. Thanks, Meaghan. Lars to you, same question.
Lars Sørensen:
Yeah, thanks Kevin. And I'm really happy to be part of this On Aon podcast today and trying to answer your questions, what excites me most about my role at Aon, is really the opportunity to work with great clients who make a difference in people’s lives, and also to find new innovative risk solutions to the complex challenging facing the industry around sustainability, as an example. And maybe as a final note, as our CEO, Greg Case, is saying, at Aon we are helping a client or helping a colleague help a client. And for me, that means that in my role in the industry vertical, I can help colleagues servicing many clients instead of being limited to only sort of a few individual clients.
Kevin Johnson:
Awesome. Thank you both for sharing that. I have to agree with you, this is an exciting time for our company, and I really love the idea of helping to enable our colleagues to take care of our clients. So, with that, why don't we just jump right in. Meaghan, my first question goes to you. What would you say are the major challenges for businesses in the life sciences sector right now?
Meaghan Piscitelli:
Sure. So, I would start by focusing on three core challenges. The first one in our industry is the looming pharma patent cliff. So, when you actually dive into it, nine of the industry's best selling billion-dollar drugs, such as Humira, Keytruda, Eliquis, they're set to lose their exclusivity over the next few years. And this is really a challenge to both investors that are looking for their next blockbuster drug, but it's also really a challenge by it's placing pressure on our companies to look at their R&D programs. An example of how impactful this will be, Humira, as an example, generated 44 percent of AbbVie's total revenues in the last year. But with every challenge obviously comes an opportunity. And therefore, on the flip side, it does offer some ability for generics and biosimilars to enter into the marketplace.
The second challenge, a key one, is attracting and retaining top talent. We've heard a lot about the great resignation, the great reshuffling, quiet quitting, all the terms, but we're really seeing life sciences companies continue to seek to attract and retain key digital and research talent, which will really advance them in this volatile market.
And finally, emphasis on ESG responsibilities. Now this covers a wide array of the business, everything from the CO2 footprint of the pharma sector, the supply chains, and retaining their ethical integrity to the social impact the companies can make on the public opinion. So, those are three of the key challenges that I'm seeing in our sector today.
Kevin Johnson:
Thank you, Meaghan. It's really interesting, the ESG responsibility seems to be touching every single thing and every single client out there. So, it's interesting to see how this continues to perpetuate itself even in the life sciences space. Lars, why don't we turn it over to you? What would you add?
Lars Sørensen:
Yeah, I think, and it's kind of following some of the same things under the ESG hat, if you look specifically on the supply chain, that's really one of the challenges the industry is facing, and I think the unique thing here is that we really work with global and complex supply chains. It's involving civil suppliers from all over the world. And then we have to add things like the very strict requirements the industry is facing around quality as well. So, there is really a huge need on being resilient and make sure your supply chain is as robust as possible.
The next thing is that I would like to highlight is around cyber risk challenge the industry is facing. We see a huge dependency on IT when it comes to both R&D, but also to the production. So, the IT resilience is an enormoU.S. challenge for the industry and something the industry is putting real money into. And also, the cyber risk challenge links back also to the supply chain, because you have issues, or could have issues, in your supply chain that relates to cyber risk. So, it's all kind of is linked together and is something that the industry is really focusing on and takes very seriously.
Kevin Johnson:
Thank you for that Lars, let me just ask you, just to kind of expound on it a little bit, this cyber risk. There's a saying, it doesn't matter until it matters. How seriously are our life science clients really taking this risk in their business?
Lars Sørensen:
Well, this is actually a very good question, and I will try to explain why it can be a little different from other industries. If we have a cyber events within the life science industry, what really is the real risk is a production stop. It will take time to get everything up running again to get the approvals for producing your products. So, having a disruption in your production that is really costly compared to other industries, it can take up to weeks before you are up running again and ready to produce your products.
Kevin Johnson:
Great, thank you for that. What would you say is driving volatility in life sciences, Lars? And why don't you go first this time and just really expound on that.
Lars Sørensen:
Yeah. And I think you can really see and say that the real call of the industry is really work on improve the health of people's life, but of course there are challenges, both the ones that we know, and also the unforeseen challenges or barriers that can hit the industry. But I really have to go back also and mention the supply chain resilience here. It's really, really so important to highlight the need around the quality and make sure that you have a supply chain that is resilient. You work with both. A lot of companies works with really single suppliers. So, they're really facing issues if something goes wrong in the supply chain, some of them can work with the dual suppliers, but if we are talking about some of the real branded products, it's down to single suppliers. So, having a disruption is really something that will cause a huge risk. And then you can add some of the things that are kind of outside of the control is natural [inaudible 00:11:10], that of course also can hit the life science industry.
But another thing that is also on top of the agenda is really the dependency on available healthcare funding. We see in the US, which by far is the largest markets for the industry, that counts for more than 35 percent of the global market. So, having access to the U.S. market, having access to the funding from the U.S. market, it's crucial for the industry. We have seen things like the new U.S. drug pricing reform that is been agreed here the last month. The effect will come in a couple of years, but it's still something that is a threat for some of them, the companies, and something they have to take into their future planning. You have countries like China that has a very strong regulation on how they want to reimburse the drug. So, the whole available funding is definitely something that is on top of the agenda as well for the industry.
Kevin Johnson:
Very interesting. Thank you for that, Lars. Meaghan, let's hear from you. What would you say is driving volatility in life sciences today?
Meaghan Piscitelli:
Sure, thanks Kevin. And I think volatility is probably one of the few constants in the life sciences industry, actually as a whole. But to build upon all that Lars mentioned, I spoke earlier about the challenges in attracting and retaining talent, and I would probably just reemphasize that the fight for talent is also driving volatility, because true employees that have the in-demand skills that are really needed to drive innovation are really hard to attract, motivate and retain. And life sciences in organizations across the globe are struggling to close that talent gap.
But secondarily, I'm seeing volatility also being driven by the challenges of building and maintaining a strong pipeline. So, as an example, to bring a new product to market in the pharma business, they must invest an average of $1 billion and it can take anywhere between 10 to 15 years. And think about that only a staggering 9 in 10 drug candidates fail to even reach the approval stage. So, there's so much unknown and risk in our industry that life sciences organizations really need to decide how to build and maintain their pipeline, whether the R&D is performed in house, what might get outsourced, what's performed in joint ventures, or what can be acquired. And so, I think that just maintaining and building a strong pipeline is also an area of strong volatility in our industry.
Kevin Johnson:
Great. Let's keep the ball rolling here. What actions can life science organizations take to drive business and workforce resilience? Meaghan, can you start with that answer for me?
Meaghan Piscitelli:
Sure. I mean, I think one key area is building innovation and growth. Now, when you think about, that's probably at the core of the life sciences industry, but we're seeing more organizations become creative in how to "build," so it might be through M&A or joint collaborations. And those models are really helping organizations advance their R&D, production, distribution efforts, and it's all by leveraging that digital infrastructure across other organizations.
And the second area, or the second action, I might consider is building workforce resilience. And we've been hearing a lot about this lately, but an organization is really only as resilient as its people and companies now more than ever, really need to work to build a resilient workforce in order to be able to continue to grow and thrive, which is really critical as the life sciences industry continues to advance at a pretty rapid pace.
Kevin Johnson:
Thank you. And Lars, over to you. What would you like to share in reference to this? What actions can life science organizations take to drive business in workforce resilience?
Lars Sørensen:
Yeah, I think one of the key things around being able to really drive business is the way of thinking around invest in what we call diversity. Making sure that you have a really diverse workforce. That is one of the things that really can help with the innovative thinking. The way that you are able to work across both different age, different backgrounds and different genders. So, everything around putting the right setup in place so you really are able to come up with these new ideas. That's a really important thing. And the other part of, the other side of the coin there is, is it also sends a very strong signal to stakeholders that you are investing in diversity and making sure that you have a company that are embracing diversity. So, I think that's one of the things that are really driving business as we see it right now.
Kevin Johnson:
Thank you, Lars. Very interesting topic. I did want to double-click just slightly on the diversity angle in life sciences. How would you say that they're actually doing in this particular space? Are they making any ground? Are they making any progress here?
Lars Sørensen:
Yeah, I do believe so. And we see it with the way, especially within the R&D area, it's really a mix of people. Different ages, different backgrounds, coming from different areas of the world. And you have these hops in the industry where you have all the talent is located and people come in from around the world and really work together to find the solutions for the future. So, I really think it's one of the crucial areas that the industry is also putting a lot of effort into.
Meaghan Piscitelli:
Kevin, if I might just add to that, it's interesting the diversity aspect of things too. Life sciences companies are particularly focused on diversity even amongst their clinical trials. So, thinking about the population in which they're looking at in terms of how their medicines or therapies actually interact and kind of have different potentially variants in results based off of a diverse group that sits in their clinical trial programs as well. So, it's really interesting. It's kind of across the board through all aspects of the business where diversification is really critical to advance.
Kevin Johnson:
Thank you, Meaghan, that added such an interesting dynamic to this whole point or that question. Why don't we go into the next question? I know we're getting close to time here, this is such an interesting topic, but Meaghan, what are the opportunities for businesses in the life sciences space?
Meaghan Piscitelli:
Sure. One core opportunity I would probably focus on is innovation. And it kind of sounds broad, but truly meeting patient needs through personalized medicine, I would say. So, our patients are more educated, they have more access to scientific information more readily available than they have ever before and they're actually pushing our industry to become more innovative. We need to become more advanced, more personalized, and yet of course, with the added pressure of doing so in a much more cost-effective and efficient way.
Kevin Johnson:
Great, thank you. Lars, what would you like to share? Where do you feel the opportunities exist for businesses in the life sciences space?
Lars Sørensen:
Yeah, I think it is really following what Meaghan is talking around the innovation. One of the ways that we see the companies attacking some of the challenges around being innovative is also that they are very active in the M&A markets. So, they are buying up these small new starts, companies that do have a promising assets in maybe in a late-state development, and take that in, go through the last part of the process of getting this asset ready to be market. That's where we definitely see opportunities. So, we expect to see the M&A markets to be continuing as we have seen in the last years. And it is also a way where that the industry is building up that pipeline. As we talked about earlier, it takes 10, 15 years to develop a new product. So, if you can go out, make the investment in something that looks very promising, you can cut off a lot of your risk and really be focused on something that looks very promising.
The other part is also around sell your non-coactivities. That's also one of the opportunities we see right now. That will free up cash to make the right investments in these new innovative areas. So, around the M&A area, that's definitely also one of the biggest opportunities for the industry.
Kevin Johnson:
Fantastic. Well, I have to tell you, I just want to thank you and Meaghan and Lars so much for all the information that you shared today. A very deep and interesting topic. Who knew? I've learned so much here today. But before we sign off, I'd love to ask you both one more question to give our listeners a little more information about you personally. Meaghan, why don't I start with you. And the question is, what most excites you about Aon's future?
Meaghan Piscitelli:
Sure. So first, thank you so much for having us, Kevin. It's been a pleasure to talk about a topic that's so close to me. But to answer your question, what excites me most about Aon's future, it's probably the ability to support and see the support that Aon's placing behind life sciences resources. There's so much that we can offer to clients and prospects in a united approach, and I'm really greatly looking forward to the future impact that I think Aon will have directly on the life sciences industry.
Kevin Johnson:
Awesome. And Lars, how about you?
Lars Sørensen:
Yeah, I think what really excites me is the journey that we are on. And here I think about the way that we are approaching the industries. We are really putting together all the solution lines with within Aon, and so everything from risk to people, which is actually a new way of thinking. So, we are, both Meaghan and I have been on a huge learning curve to get familiar with all the different solution lines. So, I think that's really very exciting, and I can see that it makes so much sense for our clients that we are able to really address the clients with an industry approach. So, that's the core thing for me.
Voiceover:
This has been a conversation “On Aon” and life sciences. Thank you for listening. If you enjoyed this week’s episode, tune in soon for another new episode. To learn more about Aon, its colleagues, solutions and news, check out our show notes, and visit our website at Aon dot com.