Digital technology is revolutionising the healthcare industry. While the healthcare sector was not at the bleeding edge of digital innovation and new technology deployment, the whole sector is engaging in a digital transformation. The pharmaceutical sub-sector is leading the way with innovative use of data to accelerate drug development, alongside many other applications of digitech in the front and back office.
Awareness that transformation is crucial for future competitiveness triggered leading pharma companies to embrace the change in culture and operations between 2015 and early 2020. Throughout 2020 industry laggards were unexpectedly forced to engage as the impact of the COVID-19 pandemic changed workplaces and ways of working globally. Digitisation instantly became a top priority for big pharma. Vas Narasimhan, the pharmaceutical company Novartis’ CEO, said the company’s “digital investment areas…suddenly became things that were fundamental.” The pandemic has accelerated a digitisation trend that industry leaders and healthcare professionals believe is here to stay (Medscape, 2020).
So, what is digital innovation and technology in the pharmaceuticals industry?
Digital capabilities are important in all aspects of the pharmaceutical industry including patient services, systems, sales, marketing and back-office business operations. Figure 1. outlines eight technology disrupters that are forecast to deliver value for pharmaceutical companies (American Pharmaceutical Review, 2018).
Figure 1: https://www.americanpharmaceuticalreview.com/Featured-Articles/357372-Digital-Transformation-in-Pharma-Sector-Heralds-Era-of-Smarter-Care/
Alongside the dramatic culture and operational changes arising from pharmaceutical digitech innovation come enormous potential benefits for human health. Improving operations via electronic health records, artificial intelligence to re-engineer drug discovery, and data to generate deeper insights into health conditions will result in a significant improvement in quality of life, facilitate predictive analytics that will save human lives, and assist in faster response to disease by accelerating the development of new medicines.
Expectations of what digital transformations can do for the pharmaceutical industry must be managed. This is not a quick fix and will require investment. There are a number of challenges that come with digital innovation that will need to be overcome. The pace of change will be impacted by the fact that pharma is: traditionally risk-adverse in nature, with traditional organisation structures, in the early stages of building required data and tech capabilities, and has inflexible product development cycles.
Three key considerations for pharmaceutical companies when thinking about undertaking a digital transformation.
Digitisation can accelerate product development.
Drug discovery and development is typically expensive and slow. There are strict regulations to guarantee the efficacy and safety of the products developed. As the cost of research and development continues to rise and conversion success/hit-rates plateau, companies seek breakthroughs. Application of digital technology has the potential to cut product development cycles, drastically reduce failure rates in clinical trials and generate significant financial savings.
In addition, collaboration and co-creation within an ecosystem of smaller bio-tech companies, technology platforms, data providers, healthcare experts and governments will be crucial for product development and the delivery of exciting new innovations. The short-cycle time in the development of COVID-19 vaccines was facilitated by data analytics. The learnings from this success should be applied to accelerate product lifecycle development in the future.
Digitisation can make backend business operations more effective and efficient.
The successful digitisation of pharmaceutical companies will disrupt their traditional business model. Organisational structures characterised by siloed business units creates friction in internal processes. Technologies, such as Robotic Process Automation, will automate repetitive non-value adding processes and reduce the friction in internal business operations e.g., finance transaction processing, and regulatory and compliance requirements. Efficiencies will contribute financial savings and a more productive use of skilled workers.
Digitisation can support companies to meet customers’ needs and expectations.
The pharmaceuticals industry is now so much more to customers than just the drug they produce. Pharmaceutical companies must focus on customer experience and journeys to truly understand their customers, meet their needs and expectations, alongside delivering successful product launches.
Health technology provides an opportunity to transform healthcare services that patients use and improve interactions with Health Care Professionals (HCPs). Ensuring data security and privacy for patients is fundamental in building both patients’ and HCPs’ trust of digital technology. Companies that address customers’ needs and expectations will optimise business performance benefits.
Pharmaceutical companies must leverage evolving digital health technologies to their advantage.
Pharmaceutical companies that do not transform will not survive. Health technology will be the key differentiator for the success of pharmaceutical companies. However, to realise the benefits of digitisation, pharmaceutical companies need to embrace the fact that a dramatic shift in their business models, mindset on the application of technology, and a refocus to a customer-centred model are required. There are significant learnings for pharma from smaller biotech and health tech start-ups that are paving the way for the digitisation of the healthcare industry.
Look out for the next article in this series that will explore how digitisation can shorten product development time resulting in substantial business efficiencies and delivering new innovations, as well as the opportunities generated by collaborating with an ecosystem of technology and health companies.