Challenging pharmaceutical manufacturers everywhere, every day are the myriad issues surrounding the acquisition, disposition and analysis of the huge amounts of data their operations create around the clock. Any Pharma producer worth its salt these days is likely investing a great deal of time, resources and effort to create or maintain a comprehensive information technology (IT) infrastructure to support compliant operations, process quality and efficiency, and ultimately assure product safety, effectiveness and affordability.
According to research firm Computer Economics, which provides benchmarking metrics to aid IT operations management, life science organizations have some unique attributes. In its study, “Comparative Analysis of IT Spending in the Life Sciences,” Computer Economics compared high-level spending metrics for life science companies against a broad sample of organizations in all industries. The study delivered four key findings:
1. Life science companies have high IT intensity. They spend considerably more than the composite sample, as measured by total IT spending per user and spending as a percentage of revenue.
2. Life science companies spend a higher portion of their IT budgets on data center and network infrastructure than the average company, and they spend a correspondingly smaller portion on business application software.
3. The size of the application support staff and spending on application software per user is typical, indicating that high data center and network infrastructure costs are the factors that drive IT spending in this sector.
4. The staffing mix for life science companies is similar to other organizations. IT staffing headcount, therefore, can be benchmarked against similar-size organizations from all sectors.
Within the context of a typical drug manufacturing environment and its incumbent data volume, it makes sense that Pharma’s spending may be proportionately higher than other industries to fund its high-capacity data handling needs. Recently, Gartner Benchmark Analytics released its “IT Metrics Data 2014” report which revealed that Pharmaceuticals, Life Sciences and Medical Products companies spend 3.2 percent of revenues on their IT infrastructure — a level higher than Industrial Electronics and Electrical Equipment (2.5 percent), Industrial Manufacturing (1.7 percent), and interestingly enough, Chemicals at 1.3 percent. What these figures seem to reflect is the reality on the ground; that is, Pharma is spending more (generally) now than peer counterparts because those industries are further along the curve when it comes to integrating a modern, enterprise-wide IT infrastructure to support operations and business goals.
SPENDING IN THE RIGHT DIRECTION
Where’s IT spending heading for Pharma and Life Science companies? Analytics firm Informa Ovum forecasts global life sciences technology spending to reach $40.8 billion by the end of 2017. According to Ovum’s research, spending will increase at a cumulative annual growth rate (CAGR) of 3.6 percent to reach the predicted figure. Ovum says its study reveals that “the increase in IT spending will be fueled in large part by the growth in data analysis and related technologies, the acquisition of systems to comply with new regulatory requirements, and increased spending on applications that advance operating efficiency and automation.” Elsewhere, Ovum’s findings show that “value chain fragmentation caused by new entities being spun out of Big Pharma and rapid growth in … emerging markets will see strong IT spending growth of 9.4 percent CAGR in the small pharma/biotech sub sector, totaling $10.5 billion in 2017.”
“The factors driving IT spending in the life sciences industry continue to be complex, with payers of healthcare demanding greater value in the face of increasing costs, technological advances enabling new types of research that are changing societal expectations, and opportunities arising from the emerging markets,” explains Andrew Brosnan, senior analyst, healthcare and life sciences at Ovum. “We expect much of this predicted growth to come from investment in business intelligence (BI) and analytics, as institutions look to collect, clean, manage and analyze the vast amount of data from sources such as social media, electronic medical records and genetic sequencing.”
Ovum expects total IT spending as a percentage of total revenues to decrease to 3.4 percent in 2017, even though overall IT spending will be higher as total revenue increases, largely due to IT-related cost efficiencies and the increased use of generics, which are less IT-intensive to develop than novel medications. “The improvement of IT-related cost efficiencies will be achieved through systems simplification and infrastructure consolidation, further cloud adoption, falling component prices and increased external sourcing,” explains Brosnan. “Greater externalization of what were once in-house resources and capabilities is occurring globally across all sub-sectors (biotech, small- to mid-sized pharma, and Big Pharma). The centralization of externalized services reduces the total cost of ownership by stripping out duplicate investments and realizing greater economies of scale.”
IT INVESTMENT FOCUS
Pharma manufacturers and prominent members of the pharmaceutical supply chain are certainly looking to make sure their IT investments yield value. The efficient flow of process/machine data and information from production line to executive suite and back is dependent on a well-organized, modern data/informatics infrastructure. This is also unflinchingly true for the reams of data streaming from laboratory operations — especially those in support of cGMP manufacturing and its incumbent quality regimes.
WITNESSES, FIRST HAND
In discussions with customers trying to integrate more functionality and value into their existing IT infrastructure, information technology suppliers and integrators are witnessing first hand where customers are focusing their IT investments as well as the priorities they assign with their spend. Prominent Manufacturing Execution Systems (MES) supplier Werum IT Solutions’ senior director Rolf Blumenthal explains, “Our customers are asking us to fill the gap between the business level and automation level. On this operational level, the first focus in pharma manufacturing is the replacement of paper batch recording with an electronic system.” Of course, this doesn’t just entail mere paper replacement, says Blumenthal, because customers are taking a broader approach to many business functions including material flow, quality control and process automation. Using this functionality across the complete lifecycle of a pharmaceutical product, from lab to market, he says, is positioning MES as a tool for process development, clinical trials production and commercial manufacturing. “During the last three years customers are looking more for strategic products in manufacturing than for customized [bespoke] software. Using an out-of-the-box product … with a strategic roadmap for the next decade, customers can achieve long-term investment protection and lower total cost of ownership.”
The notion that Pharma customers are looking for a “transcendental” experience as they integrate new IT functionality and capacity is echoed by Thermo Fisher Scientific’s Trish Meek, director of strategy – Informatics: “Our customers today are looking at how informatics can go beyond driving their processes to really transform their business,” says Meek. “To push the boundaries of innovation, [companies] are monitoring their performance and quality and actively looking for opportunities they can capitalize on to improve their operations.” This is due, in part, says Meek, to macro-trends like big data and predictive analytics that are changing IT across all industries. “Gone are the days where we rely on statistics to take a sample of data that is believed to represent the whole because analysis of the entire data set is impossible. Today’s modern in-memory computing platforms offer organizations the ability to look at their complete operation in real time or near real time.” Customers, explains Meek, want to achieve a higher level of quality and efficiency and business agility, but that often isn’t possible if that data is siloed and inaccessible. “Our customers are working with us to achieve a connected informatics infrastructure so that they can achieve these higher-level organizational goals.”
Citing the recent report, “Product Innovation Requires Laboratory Informatics Systems to Transcend Phases,” Meek notes that Gartner analyst Michael Shanler recommends manufacturers “prioritize end-to-end informatics investments and align metrics for innovation, domain expertise, operational efficiencies and quality.” “His recommendation,” explains Meek, “is based on an observation that today’s laboratories ‘are, for the most part, disconnected.’ By tightly integrating LIMS to other enterprise operation systems such as ERP, insights from the lab have the potential to be even more central to businesses seeking true enterprise-wide agility.” Businesses aren’t simply capturing and collecting data, Meek contends, they are making data actionable across the enterprise, putting management in the position to transform their businesses into agile organizations capable of responding quickly to market trends or new regulations and flexible enough to recognize and capitalize on cost-saving or margin-growing opportunities in the future.
Gene Tetreault, BIOVIA’s senior director of enterprise laboratory management, also knows that besides test and development related data, informatics are key to managing lab operations effectively and holistically. BIOVIA’s customers, says Tetreault, are seeking “a really good capability to manage inventories and managing all of the material flow in and out of the lab, as well as specialized things like environmental monitoring. That’s a manufacturing application typically included in the LIMs, but it’s all about managing the [potential for] microbial contamination in manufacturing. At the end of the day, people are looking for solutions to eliminate paper, to become more compliant, and to increase efficiencies in and around their labs. Once you get all of those systems [on a common electronic technology] platform, people are asking: ‘How do I connect other systems together? How do I get the data out of them?’” Tetreault explains that once a comprehensive lab informatics system is in place, discoverable information becomes available and lab operations managers have tremendous opportunity to gather and aggregate data and then use it to look forward operationally — creating models and other visualizations to support quality regimes in manufacturing.
GAPS TO CLOSE
Indeed, priorities have to be ordered and pursued to close the gaps created by the complexities of Pharma manufacturing environments and their supply chains. Business leader Brian Vogel, for Rockwell Automation’s Global Life Sciences business segment, finds Pharma needs to continue its efforts to organize IT to serve the enterprise holistically. “IT Infrastructure is a catch-all bucket that can include information and manufacturing software as well as hardware,” says Vogel. “Most Life Science manufacturers are moving in two key areas. Beyond acquisition, there is a major movement to shift capacity to more profitable locations. This is paralleled with an emphasis on consolidating IT-related systems while improving and expanding access to shop-floor information.”
As this unfolds, notes Vogel, Life Science manufacturers are coming to the realization that, while ERP is absolutely fundamental to driving the back end, there are considerable gaps at the shop floor. “As such, MES are now being deployed in the context of an enterprise solution. Rockwell Automation has a global customer base, so we see a wide variety of approaches to addressing this. Developing a common MES core to enforce quality, compliance and standard execution across all areas of manufacturing irrespective of what type or where a product is being manufactured is the leading trend.”
There will still be areas of the world, says Vogel, where the cost of energy and personnel will drive an approach that is more centered on adding resources and lean processes. “However, most manufacturers are avoiding the “band-aid” approach and are working to develop a more systematic, global MES core deployment model.”
Inarguably, says Jennifer Goldsmith, VP, Vault R&D, Veeva Systems, one the most data-driven areas in life sciences is manufacturing, which demands the ability to share information and collaborate quickly. Goldsmith contends raw data often exists in multiple systems and file formats, making it difficult for people to access and use. As a result, the data is often recreated in a document or structured report format to provide context and enable effective consumption. Content management systems (CMS) have become the home for many of these documents, and these systems typically lack the capability to incorporate new data as they are updated.
“Something as simple as a manufacturing specification may require manual update and confirmation of values as they change over time. Additionally, sharing this information across geographies and between organizations has also presented challenges. Cloud-based CMS allow easy, secure sharing of valuable information with other systems and a larger, relevant audience,” says Goldsmith. “Users effortlessly collaborate with one another, while all communication, content and versions are tracked and stored. As cloud-based CMS evolve, they will challenge traditional definitions of documents, enabling the storing and updating of structured data with unstructured content — such as descriptions — in one document.”
OPEX OR CAPEX?
When it comes to expensing operational necessities like an IT infrastructure, controlling that spend can be challenging, especially because it is so critical to operational excellence and an efficient, compliant production environment. With Pharma’s business models evolving quickly to meet the needs of the swiftly changing global marketplace, the industry is shifting how it invests and maintains its IT infrastructure. Some are looking for alternative ways to account for IT expenditures and shifting funding from the capital expense (CapEx) side of the balance sheet to the operating expense (OpEx) side in an attempt to better manage the rising and unavoidable cost of fielding a world-class IT infrastructure. When it comes to managing IT expenses, each company may take an approach biased in one direction or another depending on individual preferences and financial exigencies, but there’s no clear “right” answer and Rockwell’s Vogel agrees. “There is no right or wrong answer here; manufacturers of all sizes are managing expenditures as operating expenses and/or capital expenses at both the corporate and site levels,” observes Vogel. “Though most customers/partners who are developing the core model are treating the upfront design and build as a capital expense, and classifying the funding of the local extensions and roll-out as an operational expense.”
Werum’s Blumenthal offers this insight: “There is a trend on the radar that customers are expecting realistic solutions beyond the cloud technology discussion in the IT world. A new idea is to use a supplier-hosted MES and pay per batch record instead of purchasing complex IT infrastructure and an MES system.” That is an interesting proposition and may offer very lean organizations an opportunity to stick to core competencies and leave the heavy lifting to companies whose core competency is in fact IT operations.
Speaking of heavy lifting, Veeva’s Goldsmith points out that the emergence of cloud applications has provided a new alternative for financing projects, moving IT infrastructure spend away from capital expenditures and toward operating expenses. “New projects typically require a significant amount of upfront capital, and if the investment needed is too high, it may deter organizations from pursuing these opportunities at all,” says Goldsmith. “The cloud lowers the barrier to entry and supports a pay-as-you-go model, enabling companies to try new ideas without long-term commitment and easily scale as projects grow.”
BIOVIA’s Tetreault says that customers usually don’t include the company in the nitty-gritty of how they choose to fund IT investments, but that when making IT-related capital purchases, “cost of ownership and time to value are two key metrics,” that help customers valuate the potential return of their IT investment. “We are trying to deliver software at the lowest cost. We’re trying to make it so they can basically get value [even if] it is from one mapped out goal. Cloud solutions, certificates of valuation, etc., all sorts of things to deliver tangible value and to lower both of those numbers. That opens up the world tremendously to thousands of labs, as opposed to hundreds of labs.”
It’s generally accepted that contemporary IT and informatics solutions must be adopted to effectively and profitably manage Pharma’s operations or face the consequences. But just how are drug manufacturers working with vendors and integrators to apply and implement such necessary technologies? Rockwell’s Vogel offers this insight: “A hybrid-regulated consumer goods manufacturer with over 100K SKUs needed to increase production throughput by 20 percent (without increasing personnel), and needed to meet increased market demand. After reviewing its manufacturing process, it was determined that the “First Time Pass” had to increase and the “Quality Hold Time” had to decrease by more than 60 percent. More work orders per shift also needed to be executed to meet the company’s goals. After implementing a new MES solution, the number of work orders per shift doubled, First Time Pass increased by 85 percent, and quality hold decreased by more than 90 percent. Now, adoption of the solution is underway in four additional plants.”
Another of Rockwell’s customers, a global life sciences manufacturer was rolling out an ERP system to all its manufacturing facilities, Vogel says, explaining that the company needed to standardize its manufacturing intelligence interface with ERP and replace the myriad of existing MES site-level systems with an enterprise-wide solution. “The first challenge was the time frame, and the second was ensuring the MES system met existing functional and regulatory needs at each site — regardless of what or how a product or ingredient was being made. The system was rolled out in stages, focusing on core areas one at a time. Now, 17 plants are live, and five will go live in roughly 30 months since the program started.” While each customer had different business drivers, says Vogel, the need to standardize their manufacturing process and improve time-to-results was achieved through Rockwell’s platform.
Thermo Fisher Scientific’s Meek notes that with her company’s customer base, companies often take two distinct approaches: The first, one-stop shopping and the second, integrated laboratory systems. “Which approach makes the most sense is largely based on the existing systems investment and processes that are implemented in those systems,” says Meek. “One major pharmaceutical manufacturer has implemented a global deployment of our LIMS and it is fully integrated with external LES and SDMS. By focusing on strong integration between these applications, they feel that they have optimized their deployment and have a continuous flow of information enabling them to make real-time decisions. They are currently looking at predictive analytics tools to drive to a more proactive environment.”
Customers who have not made a significant investment in LES and SDMS capabilities already, says Meek, see the value in a single solution that provides the functionality of a LIMS, LES and SDMS in one. “The customer was looking at Lab Execution and LIMS and when they realized that they could get both in a single solution, it made their decision for them. Their comment was that, ‘We never thought we would find a solution for lab execution and management that is so tightly integrated, why would we go with anything else?’”
Veeva’s Goldsmith notes good documentation is essential for manufacturing facilities to ensure activities are executed correctly and are in compliance. Most companies, she says, rely on content management systems that were built when companies were less impacted by globalization and had fewer regulatory requirements. “Today, customers are looking for solutions that enable greater visibility and flexibility, and collaboration across all parties. We have customers that are in the early stages of adoption, having built a single source of truth for SOPs accessible by both document originators and consumers. Giving more parties visibility into document status accelerates edit, review and approval cycles. Built-in read and understood tasks also allow for real-time tracking of new SOPs as they are rolled out across departments and sites.”
Goldsmith explains that her company’s more mature customers understand that such systems deliver powerful insights into the health of processes, departments and partnerships. “Most metrics monitor output, only measuring what has happened. Tracking upstream metrics, by contrast, provides leading indicators into potential problems and can help identify bottlenecks before the damage is done,” says Goldsmith. Companies that have developed a deeper understanding of their business processes are using metrics to gauge performance across the organization, and drive continuous process improvements and proactive decision-making.
Werum’s Blumenthal provides a closer look outlining two solutions delivered to customers using their popular platform. “A customer is using our [platform] in process development to develop a stable, best-fitting process for solid dosage products,” says Blumenthal. “The main business goal is to be faster to market with a new product. By using MES features like MBR and EBR for creating recipes and evaluating best fitting parameters via Design of Experiments, new processes will be continuously improved and stabilized. Development with such tools and the transfer of the gained knowledge to the next production phase is much faster and is the enabler to achieve expected business goals.”
Another Werum customer is using the company’s technologies in the commercial production of a biopharmaceutical product. The main business goal is to increase the yield of the factory, says Blumenthal. “Since production runs are very long, it is critical that the process is stable without any contamination. This can be achieved through our [platform] by controlling all process steps with additional checks of all material and all equipment that is used.” Both business goals, he says, can be supported by the same system. The complete functionality supported by Werum’s platform, says Blumenthal, is defined and controlled via recipes. The creation and change of recipes (MBRs) can be both flexible (process development) or highly controlled with access rights (commercial manufacturing).
A PATH TO IMPROVED OPERATIONS
“Many more parties are involved in the end-to-end production of a product adding another layer of complexity to the development process,” explains Goldsmith. Supporting technologies are often deployed in a siloed model, limiting the ability for parties to collaborate directly, thus forcing the use of uncontrolled communication mechanisms, such as email, she says. “Mature companies are taking a strategic approach to technology, creating a strong foundation for information sharing and collaboration to achieve the biggest benefit. Companies that succeed in sharing information with all parties involved and between systems see significant improvements in all five areas.”
Werum’s approach, says Blumenthal, “is the implementation of a recipe-driven system that leads the operator through the business processes, enforcing the ‘right first-time’ principle and compliance with all pharma regulations. “Creating best practice recipes and following the guidance of the system along such recipes (like a navigation system) will always result in best product quality, reduced costs, safety, reduced risks and compliance,” Blumenthal says.
Tetreault agrees that LES enforces right first time: “When you’re following the process and doing QC testing on a particular batch — step one, prepare the agents and global phase samples and so forth. Step two, do this. Step three, do that. On step one, if you don’t adhere to the process of running that analytical test, if you don’t adhere to all the equipment being calibrated, all the materials being within tolerance and of course not expired, all of the training records — [the LES is] enforcing all of that at the time that you’re doing the test.” Tetreault notes test regimes, independent of the quality control provided by an integrated lab informatics platform can be problematic because any issues or mistakes may only be revealed after a review “… somebody comes along and reviews it and find that there’s a problem. Now there’s a day’s worth of effort into doing something that was wrong on the first step.” Tetreault explains BIOVIA’s platform (as with others) electronically enforce process rubrics at the time they are being done. “It reduces costs. It increases quality. It decreases safety risk.”
Thermo Fisher Scientific’s Meek knows that lab informatics platforms truly are the pointy end of the spear when it comes to assuring quality when it counts. “Ensuring product quality, risk reduction and regulatory compliance have always been among the top reasons to deploy a LIMS, she says. “Test results from suppliers are checked to ensure they are fit for use before time and energy is wasted, all sample results for the batch including environmental monitoring are collated before product can be released. Business processes are implemented in the LIMS and the users are [systematically] stepped through the organizations’ SOPs to ensure compliance. Hazard warnings can be associated with any step in a workflow and, within the LES, users are reminded as they execute that step of the appropriate safety procedures including safety images and videos if appropriate.”
It’s important, says Meek, to remember that today’s LIMS are far more than just lab information systems. “It is also a laboratory resource planning system. Method execution, scientific data visualization, instrument calibration and maintenance, and detailed resource planning and allocation can all be done through the LIMS.” Typically, notes Meek, LIMS are on an upgrade cycle of around every five years, and the first thing Thermo Fisher Scientific does with its customers is demonstrate how much the functionality of its platforms have evolved since initial implementation and work with them to leverage the new capabilities of the system. The focus, she says, is to deliver on high-level organizational goals by leveraging their existing investments in laboratory instrumentation, informatics and enterprise systems. “And while the concept of a truly ‘paperless lab’ has been hotly debated for many years, it is really only now coming into its own. The latest Informatics solutions are capable of fully integrating the lab to the rest of the business, eliminating for the most part many of the paper-based processes that have caused bottlenecks in workflow or contributed to errors in transcribing results and generating reports.”
Because LIMS are tightly integrated with other enterprise operation systems such as ERP, insights from the lab have the potential to be even more central to businesses seeking true enterprise-wide agility says Meek. “Businesses aren’t simply capturing and collecting data; they are making data actionable across the enterprise, putting management in the position to transform their businesses into agile organizations capable of responding quickly to market trends or new regulations and flexible enough to recognize and capitalize on cost-saving or margin-growing opportunities in the future.”
Rockwell’s Life Science manufacturing customers, notes Vogel, are moving to maximize their operating options by standardizing the underlying recipe and execution process around five imperatives: product quality, cost control, safety, risk reduction and compliance. This will maximize quality adherence, reduce risk and minimize cost variations from plant to plant. “To ensure product quality, for example, enterprise MES coupled with advanced EMI software is being used by manufacturing and IT teams. Reports are produced throughout the day by aggregating data from machine, plant, enterprise and third-party applications to produce real-time dashboards with unique situational and historical context for different users.”
To improve compliance, contends Vogel, “companies are selecting information technologies that go beyond collection and archiving of data. Today’s manufacturers are looking to information technology to automatically gather required data, drive regulatory compliance, and enforce execution standards while having robust security capabilities. Deploying a Manufacturing Execution System (MES) with advanced information technologies such as these has been proving to be a “plus” to profitability. It greatly increases quality adherence coupled with the ability to shift the production of a single product or a group from under-performing plants to locations that are more advantageous to the bottom line.”