The pharma industry has been talking about digital transformation for some time, with buzzy phrases like ‘patient centricity’ and ‘beyond the pill’ seemingly ubiquitous in consultancy reports for a decade now. Where progress has been made, it has often been slow. The industry has yet to experience the benefits that well implemented technology can bring — including greater control, improved outcomes, enhanced decision-making, more accurate reporting and less waste — which are being observed in many other sectors.
The COVID-19 pandemic has compelled pharma companies to recognise the benefits of digitisation and has made the adoption of technology a priority across all segments of the value chain — from R&D to clinical trials to supply chain to commercialisation. It has also emphasised the importance of the decade-old concept of ‘patient centricity’, with pharma companies reaching further now than ever into the broader patient journey. Still, the adoption of technologies can be a lengthy and complex process; one that isn’t without risk in what is a highly regulated industry with little margin for error. That said, with the cost of bringing a new therapeutic to market averaging up to $2bn, there is significant scope for improved efficiencies through the use of technology.
Fewer than 10% of drugs make it to market from phase 1 clinical trials or even progress to trials at all (2), making the industry’s current high-risk, high-cost R&D model unsustainable. It has been estimated that the use of technology could reduce R&D costs by up to 60%(1). Technologies to support research and development include those which use data-driven drug design to improve the probability of success in the early stages of the development process, or the use of clinical trial support platforms to facilitate efficient recruitment, management and data collection across increasingly decentralised trials.
Given the high cost and the lengthy timeline of development, getting the launch process right is critical. The reality is sobering — despite a significant increase in marketing spend, approximately two thirds of new drug launches fail to meet first year expectations(4). The commercialisation function of the industry was arguably the most disrupted by the pandemic, with reps no longer able to drop in on key prescribers as they made their rounds at the hospital. Emerging digital networks and communities facilitate the interaction of the industry with the doctors and patients they serve in a more efficient way than ever before. It is not surprising, therefore, that an estimated third of pharma companies will be spending more than half of their marketing budgets on digital channels over the next three years(5).
Despite being one of the largest industries globally, pharma companies have surprisingly limited connectivity to their end users — or patients, as we know them. An evolving healthcare landscape, however, has seen the pharmaceutical industry extend its activities ‘beyond the pill’. Partnerships with companies providing digital solutions to the wider patient journey give pharma companies an entry point to a patient centric strategy. Such offerings include digital diagnostics, digital therapeutics and remote patient monitoring. In the example of digital therapeutics, the symbiotic relationship of digital health companies and pharma is pronounced. Commercialisation of digital therapeutics as standalone therapies is still in its infancy; regulatory pathways have simplified (e.g. the FDA’s SaMD pathway in the US and Germany’s DIGA process), but payer coverage and widespread prescriber acceptance lags behind. In partnership, however, the pharma company can exponentially increase the reach of a digital therapeutic through its existing distribution channels. The pharma company, on the other hand, can reap the rewards of improved adherence, efficacy and outcomes — or at the very least, a marketing edge over its competition.
Few in the industry dispute the importance of digitisation, but still, there can be a resistance to change. Companies cannot afford to ignore the impact of digital on all facets of the value chain if they wish to keep up with healthcare demands.
IBIS Capital’s latest industry research report includes an 80-page deep dive into the innovative digital health businesses enabling the pharmaceutical industry’s evolution. Download the HealthTechX Global Report: Digitisation of Pharma.
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