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Challenges and Opportunities for Digitalisation in Pharma

Pasi Kemppainen, 2018-02-02

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Digitalisation is fundamentally changing the healthcare industry. The Pharma industry, as a core part of healthcare, is no exception to this. New technologies and innovations are already enabling pharma companies to improve medicine development and patient care.

At the same time, healthcare payers and other customers of pharma companies are demanding more and better data on the medical efficacy and improved patient quality of life. These demands cannot be fulfilled by purely traditional means.

‘Beyond the Pill’ brings unprecedented opportunities

The most profound part of the business transformation, called Beyond the Pill, is already cutting to their core businesses in clinical development and patient care. Pharma companies are facing immense challenges on improving patient outcomes at the same time with the intensifying competition and pricing pressures.

The next generation of pharma products already available varies from patient-specific biomedicines to medical devices with the capability to provide patients real-time information about their condition and collect patient data for care analytics to improve the treatment.

These new technologies not only can help companies to address several major care challenges—such as compliance and chronic disease management—but also can help them to create hundreds of billions of dollars in value.

This has already led the pharma manufacturers capitalizing the Beyond the Pill business transformation. For example, pharma giants like Novartis, GSK, and Novo Nordisk are already investing in partnerships and new business models with technology companies such as Google, IBM and Qualcomm. Not to mention traditional device manufacturers like Apple, Samsung, and Nokia who are already researching beyond the wellness products and looking to the patient care market.

All this will substantially improve the personal medication development and care processes where the patient and care data is the new source of innovation and competitiveness.

The new Pharma reality challenges future competitiveness

A study by NNE, a leading pharmaceutical engineering company, investigated global pharma companies’ perspectives of the future successful pharma manufacturing sites. The study identified changing expectations of success moving from site stability to site agility with three key requirements:

- ‘Flexible production’, a site’s ability to accommodate changes in production demands,
- ‘Integrated quality’, balanced and integrated quality systems; and
- ‘Entering new domains’, having the ability to quickly absorb knowledge to implement new practices.

This means that pharma companies already clearly perceive that their future competitiveness is at stake due to external and internal drivers.

In addition, the pharma manufacturing infrastructure implementations are already highly complex with an increasing number of connected equipment and internal and external system integrations. The pharma ecosystem is highly networked with the pharma industry-specific requirements eg, for the collaborative R&D data management and supply chain regulatory compliance reporting.

These fundamental pharma ecosystem, business model, and technology changes are the factors leading to a new manufacturing and product supply industry transformation called the New Pharma Reality.

Pharma IoT

Pharma companies have long ago realised that selling traditional medicines will not guarantee sufficient growth nor even sustain the competitiveness. This fundamental change moving Beyond the Pill typically arises from one or two realisations:

1) medicines alone are often not enough for patients to achieve optimal clinical outcomes, and
2) as the current product pipelines dry up, Beyond the Pill businesses can be valuable new sources of revenues.

This has created the interest in utilizing the new technologies and business processes in development and patient care leading to Pharma Internet of Things or Pharma IoT.

Pharma IoT conceptualizes the digitalization of medical products and related care processes with smart connected medical devices and IT services (cloud, mobile, apps, etc.) in drug development, clinical trials and patient care. The outcome of the Pharma IoT in the development and clinical trials will be using the combination of advanced technologies and services for creating totally new kinds of disease treatment possibilities.

The fundamental difference between patient care Pharma IoT with other consumer IoT solutions is that pharma solutions require regulatory compliance. This distinguishes the Pharma IoT solutions from general wellness and fitness applications where the software and hardware are basically free from the regulatory screening and hence can’t be prescribed as a part of the clinical patient care.

Pharma industrial internet

Pharma Industrial Internet, like Industry 4.0, conceptualizes the digitalization transformation of the pharma product supply infrastructures from manufacturing the medicines to dispensing the medicines to patients. In other words, the industrial internet infrastructures manufacture and supply some or all medicine/sensor/device/apps/services/patient care processes capabilities to the market whereas IoT is the ecosystem and market for utilizing, analyzing and monetizing the use of the medical products and ultimately, patient care data.

The key infrastructures and capabilities in Pharma Industrial Internet are:

(1) manufacturing intelligence (continuous and automated ‘lights-out’ manufacturing);
(2) software controlled packaging execution (serialization and automation/ robotization);
(3) integrated supply chain (traceability and collaboration); and
(4) enterprise back-end IT cloud-based services (XaaS) utilizing the data from the product supply (analytics, life-cycle management, and regulatory compliance reporting).

In addition to the manufacturing and service infrastructures, Pharma Industrial Internet will enable drastic changes in business models and global manufacturing operations. With the high level of automation and real-time global ecosystem connectivity, the medicine manufacturing and packaging can become globally transparent and distributed in more controlled fashion given the regulatory constraints and requirements.

The third-party manufacturing and global product supply could be then managed centrally in real-time by the marketing authorization holder, and yet the products can be traced and verified on a sales unit level throughout the supply network even up to the point of dispense and patient. In the longer term, this can lead to a platform economy where the ecosystem and innovation management will be the source of the competitive advantage rather than owning the manufacturing and product supply assets.

Pharma Digitalisation is transformation, not disruption

The Pharma industry is facing the biggest transformation since the rise of the modern medicines in the nineteenth century and the introduction of the manufacturing automation in the 1980s. The transformation is already driven by the increasing global regulation, intensifying competition, demanding payer requirements and increasingly complicated product supply ecosystems.

At the same, completely new business opportunities are opening with new novel technologies and partnerships with high-tech companies. The future-defining challenge will be how the inevitable very diverse and complex business requirements can be implemented with the current manufacturing, product supply networks and – most significantly – business models and products.

The good news is that no Uber or AirBnB like industry disruption is required to seize the digitalization opportunities. Pharma companies simply need to start transforming into digital businesses to be competitive in the future.

Join Digitalization in Pharma Summit and learn latest trends from senior-level attendees with healthcare industry. Representatives from Novartis, Bayer, Takeda, UCB, Biogen and many others will share their experience about digital integration in the healthcare industry, their fails, and successes! Looking forward to hosting you on March 15 – 16, 2018 in Prague, Czechia.

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