Why Pharma Needs to Catch Up On Digital

Jul 26, 2017

A recent IT leadership survey found that many more pharma companies are reporting their digital strategies are ineffective compared to other industries. Heath Jackson looks at why this is – and what they need to do about it.

Heath JacksonThis year’s Harvey Nash/KPMG CIO survey, that took in the views of nearly 4,500 tech leaders from around the world, returned the encouraging finding that we have a new breed of digital innovators, with 89% of CIOs investing in innovation and an increasing emphasis on creating more nimble technology platforms that can truly serve the needs of the business.

However, for the pharma sector the news was slightly less positive – almost twice as many respondents in pharma (33%) compared to all industries (19%) reported low overall effectiveness levels in their digital strategies.

I don’t think there’s any doubt that the sector is not yet where it needs to be in terms of its data and digital strategies. Data is sometimes not being managed as effectively as it could be and frequently it’s not all in one place. This is not because the industry doesn’t appreciate its importance. If anything, it’s probably more a case that the imperative has not been there to date.

A new digital imperative

Now, however, I believe that the imperative is there – and the industry knows it.  The big players are extremely keen to stay out in front, and know that there is a new generation of smaller companies who have begun to really differentiate themselves through their use of digital technologies. 

As a result, I expect that we will see a quantum leap in the next few years as pharmas drive digital across the whole landscape of their businesses.

Right now, digital has certainly moved to the forefront of pharma CIOs’ thinking. Technology is the new petri dish or titration machine – it’s where and how their businesses are going to succeed. By and large, the complex compounds to create new medicines have already been discovered. New pipeline and differentiation often comes from how drugs can be delivered in the body and the complex manufacturing required to produce increasingly complex drugs. Companies must ensure they are getting the maximum from the data they already have and creating solid interfaces between an organisation’s ‘data lakes’ and the users of that data via digital applications. It’s about bringing users closer to the data, whether that’s in drug discovery, manufacturing, clinical trials, or any other part of the business.

A clear example of where this can really resonate is clinical trials. Using digital applications so that trial participants can instantly record and report on how they are feeling through a trial, which can then be instantly picked up and analyzed by scientists, can cut the time of a trial by an order of magnitude.  This means lower costs and faster time to market.

Digital labor

One area where the survey showed that pharma is already ahead of the curve is in their use of digital labor (automation/robotics). Around 14% of pharmas said they have invested significantly in digital labour, compared to 9% across other sectors. For example, for some time we have had automatic titration machines, to do something that used to be done by junior scientists – this is automation at the basic level. Automation can be expected to proliferate across pharma organizations – from back office functions such as finance and administration, to front office including manufacturing and drug discovery. Data is already starting to take over physical processes – often, companies don’t need to mix compounds anymore because they can simply run their data models to tell them what the results would be. In drug discovery, automated programs that could match the way compounds are delivered in the human body to the data from clinical trials could have a massive impact – helping identify the candidates for further discovery and investigation. So pharma is ripe for AI and automation. This could lead to some short term displacement of people – but new roles will certainly be created alongside the disruption.

Barriers to success?

All this being the case, what have the barriers been to digital enablement so far? The survey found that pharma respondents feel most challenged by compliance issues (44% compared to 23% of respondents for all other industries), privacy/security (36% compared to 25%) and executive sponsorship (31% compared to 20%).

I don’t believe that any of these barriers are insurmountable, by any means. The compliance and privacy issues facing the sector are in fact no tougher than those other regulated industries face. And the executive sponsorship will certainly be there as the imperative rises up the agenda.

In my view, the main barrier to date has been the simple fact that digital has not had a single ‘home’ in the business. Where should it sit – in discovery, in clinical trials, in manufacturing? Historically it has probably sat in a little bit of all three, driven by individuals, but not coordinated across the organization.  The CIO, meanwhile, has been viewed by the business as chiefly an IT administrator – someone responsible for keeping email turned on and documents available.

This will change, as it should. We will surely see the creation of more Chief Digital Officer (CDO) roles — 25% of organizations across sectors now have one, up from 18% the year before.  If not a CDO, we are likely to at least see nominated digital leaders which will in many cases be the CIO, and a new focus on building digital capabilities that can be shared across the organization.

Looking to the future

Another issue that is afflicting the sector, however, is digital skills shortages. This is an issue for all industries – everyone needs data scientists. Big pharma have often set up foundations attached to universities in order to attract in the best talent. We might see some investment from the sector in technology foundations, not just pharmacology ones, in the future.

Overall, I am optimistic about the digital future for the sector. Pharma companies have the investment power, and now they have the will to take it to the next level. We will see some exciting developments in the coming years.

Heath Jackson is partner at KPMG.

 

 

 

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