“There is no alternative to digital transformation. Visionary companies will carve out new strategic options for themselves—those that don’t adapt, will fail.”
- Jeff Bezos, CEO of Amazon
Like many other sectors, the pharmaceutical industry is undergoing unprecedented change – accelerated by the onset of Covid-19 and the relentless drive of digital technology.
New technology is seen as an antidote to declining profit margins, cost pressures and the key to maximising sales. At the same time, the industry needs to conform to increasingly stringent regulatory and legislative demands.
Beyond the pandemic, the ongoing digital transformation of the pharmaceutical industry looks like having a truly lasting impact on innovation, investment, competitiveness, and growth.
This article provides an overview of recent GlobalData research that shows the extraordinary range of digital developments in the pharmaceutical sector.
What is Digital Transformation?
Digital transformation typically refers to the use of emerging technologies to solve traditional problems. Instead of simply supporting traditional activities, digital transformation leads to innovation right across a business, driving fundamental change in all its operations.
This includes: Blockchain, 3D Printing, Artificial Intelligence, Cloud Computing, Internet of things, APIs, Biometrics, Autonomous Vehicles, Big Data, Virtual and Augmented Reality, Wearables, Social Media, Robotics, Cybersecurity.
This survey was designed to benchmark the level of business readiness and adoption and better understand the business functions it will impact. It gives a picture of the barriers to adoption and helps define the requirements for success. It also shows to what extent COVID-19 has impacted digitalisation.
Strategy and optimism
81% of surveyed healthcare professionals stated that their organizations had a digital transformation strategy in place or were working towards one. This is up by 8% from 2020 and up by 13% from 2019. There is some evidence that employees at different levels are now more aware and involved in digital transformation.
Operations enablement and innovation (56%) became the key focus of digital transformation in the healthcare industry for the first time since 2018. This was followed by business innovation (48%) and customer engagement (47%).
The majority of all survey respondents (74%) were optimistic about the growth of digital transformation in their organizations. Since the onset of the COVID-19 pandemic, the majority of businesses have taken the opportunity to increase innovation.
More than half of respondents said that they had an enterprise-wide or business-line digital strategy - the highest since 2018. It seems more organisations are using emerging technologies to remain competitive, improve efficiency and engagement with customers, and ensure better long-term business resilience.
So, what’s stopping them?
One of the primary barriers to innovation was felt to be insufficient funding (40%), with a lack of specific skills and talents (38%) and organizational silos (36%) also hindering uptake.
Many health professionals were concerned with issues around digital privacy (31%) and the unclear return on investment (25%). The projected ROI for the top 15 pharma companies fell to 1.6% in 2019 - mainly due to rising costs and an increasing clinical trial cycle time.
In the GlobalData poll, over 25% of respondents said they thought pre-clinical and clinical trials would be most difficult to digitally transform. However, most agreed that employing digital tools in pre-clinical and clinical trials was critical to improving process efficiencies because data integration and interoperability is a key requirement in these processes
What are the key drivers for digital transformation?
It was felt that strong leadership (69%) and culture of change (53%) were the most important drivers of a successful digital transformation. Digital transformation must also empower people to work in new ways, eliminate organisational silos, encourage collaboration, and build a constant culture of change.
The rise of virtual interaction
Before the pandemic, pharmaceutical companies relied on the traditional face-to-face sales force and physicians’ interactions.
According to a GlobalData poll conducted with pharmaceutical industry professionals from April 19 to November 29, 2021, 67% of 793 total respondents saw virtual interaction remaining (either as a standalone option or a mix of in-person and virtual interactions) after the COVID-19 crisis recedes.
Only 25% of the respondents believed that in-person interactions would go back to pre-pandemic levels.
Lockdown and social distancing forced pharma to rapidly implement new ways of engaging with customers, as well as promoting their brands and messaging.
There was evidence of increased online marketing efforts and end-user reach via social media platforms such as Facebook, LinkedIn, and Google+.
The whole spectrum of social media services is now being leveraged by the pharmaceutical industry - from social listening to marketing campaigns.
Which technologies are next?
Pharma executives are prioritising cloud computing, Big Data, and social media for current investment, with artificial intelligence (AI), application programming interfaces (APIs), and digital platforms seen as critical investments over the next two years.
AI will continue to trend as the most disruptive technology - selected by 60% of surveyed healthcare professionals, followed by Big Data at 38%. They are linked - the increasing volume and complexity of data being generated by the sector will continue to pose challenges that can be best addressed by AI.
11% of healthcare industry stakeholders reported a decrease in investment in emerging technologies, with 46% seeing the investment increase.
Only a small number of pharma companies have the internal resources and finances needed to build in-house technology capabilities. According to GlobalData’s Smart Pharma survey in 2021, healthcare industry professionals indicated that IoT, sensors, blockchain, cloud, and virtual (VR) and augmented reality (AR) were the technologies they would need to seek help from external vendors to develop.
Digital transformation is a financially costly, continuous process so it’s not surprising that respondents cited insufficient funding as the most significant hindrance – particularly among respondents from smaller companies who may have more limited channels to secure funding and attract talent.
Digital transformation also created a demand for employees possessing digital skills. The short supply of tech-savvy talent was a particularly pressing concern in larger companies.
While companies were exploring innovative technologies to improve operations even before COVID-19, the pandemic made it a necessity. As the pandemic slows down, companies without the technological foundation are less likely to succeed in this rapidly changing business environment.
(All information sourced from Global Data PLC)