Breaking through pharma's digital innovation barrier

April 29, 2024
Digital maturity in pharmaceutical supply chains must rapidly scale to meet demand

Pharma is not an industry traditionally known for its lightning pace. While the demand for new and existing innovations grows rapidly in line with the global population, the actual development of those innovations can be glacially slow. 

Not all of this problem can be blamed on the industry — its very nature demands precision over speed, with the smallest tweaks to drug formulations requiring extensive testing, trials, and approvals before they can reach the market. Product changes that, for most industries, would be an incremental shuffle forward can feel like a dive into a bottomless ocean for pharma companies. 

This makes it all the more important for pharma companies to take the initiative and speed up parts of their operations wherever they can. And, as a Deloitte report found that only 20% of biopharma companies are digitally maturing, it’s clear that there is a huge opportunity for the industry to use digital technology to break down barriers to innovation – an opportunity that most companies are yet to seize. 

A well of untapped potential 

The need for this digital transformation was brought into sharp focus by the seismic impact of COVID-19. Not only did it stretch supply chains to breaking point after creating unprecedented levels of demand for drugs, but it also disrupted R&D. In-person clinical trials were affected as many participants could not leave their homes. Lab work was thrown into uncertainty. Routine business operations and admin were disrupted during the sudden mass transition to remote working.  

These dramatic changes meant many businesses were uprooted virtually overnight. And yet, within this chaos, there remained seeds of opportunity that have been nurtured into growth by the more proactive businesses in the market. The companies that adopted digital solutions to the problems caused by the pandemic find themselves in a stronger position today, now that the worst of COVID seems to be behind us. 

For example, those who adopted wearable tech to carry out clinical trials remotely are now finding this process has helped reduce trial times and costs, while also providing more meaningful data

Advancements in software — especially software-as-a-service (SaaS) — have promoted collaboration and efficient data management on a global scale. This has also helped identify data gaps that could improve the efficacy of trials if filled — for example, the fact that women of color are underrepresented in clinical trials. By improving the diversity of participants who take part in trials, the industry can only improve the quality of its research. 

And this is just scratching the surface of what is possible by embracing digital innovation — yet the majority of the industry remains slow to do so. The success of those in the pharma industry that have already embarked on their digital journeys provides a roadmap for success that any business can follow — and promises further opportunities for innovation that are yet to be uncovered. 

Data holds the key 

While most pharma companies will use some basic form of digital technology, the keys to success lie in the type of technology used and how it is integrated into the business. Deloitte’s Life Sciences Outlook 2023 tells us that “digital solutions that were once seen as long-term projects for CIOs are becoming vital to business operations,” and businesses that tightly integrate digital innovation into their core operations reap the biggest rewards. 

The nature of many pharma companies is to be cautious and risk-averse — which makes sense when developing new drugs and devices with patient safety in mind. However, this approach can be a hindrance when looking to make the necessary changes for a top-to-bottom digital transformation of a business. 

The foundation of this transformation can be found in data. By treating data as a business asset and leveraging it accordingly, companies can embed digital systems into their core operations, and enjoy all the benefits that this provides. This means taking a holistic approach to data management that takes into account the whole pharmaceutical supply chain – or partnering up with a distributor who will. 

Digitalization unlocks end-to-end visibility in the supply chain, which enables businesses to explore new and exciting avenues for growth that would not have been possible before. It can provide insights on a global scale, such as increases in worldwide revenue or drill down into the most minute of details, like the stock of a particular ingredient in one specific supplier’s warehouse on the other side of the world. 

If this data can be collated and managed efficiently, then this will empower all the other exciting technologies that the industry has yet to fully embrace. AI could revolutionize the clinical trial planning process, for example — but its machine learning algorithms need high-quality data to learn from. The more data an AI has, the better and more accurate its models will be.

Automation is another development that could revolutionize many levels of the health care industry, from production to logistics. And blockchain technology can help improve transparency and trust through the supply chain, simplifying business transactions while also combating counterfeit medicines by authenticating the source of products with a verifiable paper trail

Simply survive — or thrive 

Perhaps most importantly, a digitalized supply chain enables businesses to operate with renewed agility and flexibility at a local, regional, and international scale. At a time of geopolitical instability, extreme weather disruptions, and sustainability legislation — notably the EU’s Packaging and Packaging Waste Regulations (PPWR) which, if passed, will bring the health care industry in scope of packaging sustainability laws. Flexibility will be needed more than ever in the near future. 

Digitalization facilitates dual sourcing, which is essential in times of uncertainty. For example, if supplies of a particular excipient become cut off by an unpredictable weather event, it is much easier to find an alternative without disrupting production. 

Furthermore, adding digital flexibility into supply chains unlocks new ways for pharma companies to improve efficiency, reduce costs, and increase speed to market. It can help find optimal routes for active ingredients, more local suppliers, alternative ingredients, and more; all of which improve access to innovation at a much lower cost while unearthing efficiencies that make it easier for businesses to justify investment in more groundbreaking innovations. 

While there is much about the future that is uncertain, the one thing the pharma industry can count on is that the most digitally mature companies will be best placed for success. The world is changing, and the pharma industry must change with it — but by embracing that digital transformation, healthcare companies will find they can not only survive those changes, they can thrive. 

About the Author

Karsten Smet | CEO, ACI Group