Posted: 03 Dec. 2020 8 min. read

Digitized, interconnected supply chains could revolutionize pharmaceuticals…but are pharma companies ready?

By Justine Lelchuk, managing director, and Neal Batra, principal, Deloitte Consulting LLP

Picture this: The year is 2030, and Jack is successfully controlling his high blood pressure with the help of a customized treatment cocktail. The drug’s manufacturer has harnessed multiple data streams (e.g., claims history, health records, and data pulled from wearable devices) to tailor its products to individual patients like Jack, and to small groups of similar patients across the globe. An earlier version of the drug was modified after Jack’s physician determined it wasn’t as effective as expected. A portal operated by the drug’s manufacturer tracks Jack’s experiences, along with the 200,000 other patients who are on the same therapy. Ongoing monitoring of Jack and the other patients can help the manufacturer make continued improvements in research and development (R&D), adherence, and the overall patient experience.

How can biopharma companies succeed in the future of health?

The ability to prevent disease—or detect disease in the earliest stages and develop highly effective personalized therapies—is at the heart of the future of health that Deloitte envisions. Sophisticated technologies and advances in early detection (through increased screenings and diagnostics) could help prevent diseases in ways that could disrupt biopharmaceutical companies that focus exclusively on reactive treatment. Over the next decade, we expect the health care sector will move from a break-and-fix model (where health isn’t addressed until there is a problem) to a consumer-centric model that focuses on sustaining well-being and preventing sickness. But the path to this reality can feel like a fantasy for pharma executives who still struggle to collect and merge clean, usable data.

The supply chain model used by most biopharmaceutical companies was built for predictability and repetition. This allows them to produce and distribute large quantities of drugs around the world. However, this linear model (used for the production of small- and large- molecule drugs) is often too rigid to adapt quickly to market disruptions. Moreover, while some patients respond well to a one-size-fits-all treatment, others might not get the same benefit or could experience side effects. Moreover, many existing supply chains were not built to accommodate the shift to smaller-volume, micro-distributed therapies, nor are they designed to respond to market disruptions such as supply restrictions, variable raw materials, or pandemics. Some biopharma companies are beginning to develop supply chains built for individual patients. These digital supply chains are driven by advances in cell and gene therapies and powered by a connected digital ecosystem that makes it possible to produce made-to-order, personalized therapies. In addition, an interconnected, digital supply chain can help improve various functions throughout the company and make it possible for the broader ecosystem of patients, regulators, distributors, and pharmacies to work more collaboratively.

Five ways a digital supply chain can support the Future of Health

Digital has the potential to break down traditional silos in biopharma and open the door for greater integration of data. This data, which might include product-quality feedback, can be integrated into research and development, sales, marketing, and other segments. Moreover, the ability to collaborate across functions makes it possible to share data across a product’s lifecycle. In addition, automating processes such as batch release within the manufacturing facility, and the ability to digitally process and track product quality complaints and adverse events, could make it easier to meet regulatory requirements. As consumers seek better outcomes, demand for biologics is likely to increase. A digital supply chain could help biopharma companies create connected smart factories. Leveraging data from connected devices (e.g., sensors throughout the plant) can allow for tighter process control and increased yield while reducing costs and making it easier to comply with regulations. Here are five key components of a digital supply chain:

  • Demand-sensing: Today, biopharma companies might rely on a dozen sensors to determine demand for a product. Tracking the weekly sales of a product is one common type of sensor. But there are scores of potential sensors that are not yet being used. Smarter demand sensing incorporates a wide range of consumer and patient data, which can help biopharma companies predict health conditions based on patient characteristics. Data from search engines and social media, for example, could help biopharma companies match supply with demand more effectively. During a pandemic, an integrated digital supply chain could help vaccine manufacturers and distributors match supply and demand so herd immunity can be achieved more quickly. A model could prioritize areas that have the greatest need for a vaccine based on real-time infection rates, capacity, and distribution capabilities.
  • Synchronized planning: Synchronized planning allows for smarter demand sensing and incorporates consumer and patient data to predict future health conditions. For example, once a COVID-19 vaccine is approved, demand-sensing could be used to identify regions where outbreaks are most likely to occur. Synchronized planning could then be used to prioritize vaccine distribution based on potential hot spots.
  • Interoperability: Electronic health records might reside in a system that the pharma company can’t access, and protected health information (PHI) might exist in multiple unstructured formats through a wide range of devices. The ability to harness these information streams through interoperable systems, tie them together, and comply with a variety of regulations will be challenging. It could also open the door to a new, digitally-focused ecosystem of technology players, pharmaceutical companies, and regulatory agencies.
  • Connected customers: Small-molecule drugs have traditionally been developed to treat a condition rather than an individual patient. But with fewer blockbuster drugs in development1, and as consumers become more empowered to make decisions about their health, pharmaceutical companies might need to change their R&D processes. As the use of wearable devices expands beyond traditional fitness tracking and performance, wearable data and other PHI could be used to build predictive models that can recommend drug, product, or lifestyle adjustments at the individual level. Personalized therapies could consider a patient’s unique biology, including the likelihood of developing or tolerating side-effects. There is a major difference between a drug that effectively controls a disease, and a drug that effectively controls a disease without negative side effects.
  • Data: While a pharmaceutical company might currently control its own data, it might not have visibility into its distribution networks, nor the inventory of its suppliers. Connecting multiple streams of digital data is core to the digital supply chain. Vast amounts of data will likely need to be aggregated by the pharma company or a third-party data aggregator. It might need to be enabled by the government.

The life sciences sector is becoming increasingly digitized. Biopharma companies that are able to digitize their supply chains—and connect them to other segments of the company and the broader health care ecosystem—could be positioned to develop more effective, personalized therapeutics.

The road to digitization could be bumpy. Biopharma companies will likely need to make significant invests in building their talent. This could include augmenting traditional expertise in science and development with data science, technology and design thinking. Companies might also need to invest more to further digitize the supply chain. Some biopharma companies have had to pull back on those investments due to increased spending in R&D and mergers and acquisitions. We expect the role of the supply chain will fundamentally change over the next five years.

Acknowledgement: George Pilitsis

Endnotes

1.  The Blockbuster Is Dead. Long Live the Blockbuster!, Embracing precision medicine, the blockbuster model shifts from mass to niche appeal—and from bulk to piecemeal revenue, Genetic Engineering & Biotechnology News, January 31, 2019

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Neal Batra

Neal Batra

Principal | Deloitte Consulting LLP

Neal Batra is a principal in Deloitte’s Life Sciences and Health Care practice focused on business model and commercial operating model innovation, redesign, and transformation. He heads Deloitte’s Life Sciences Strategy & Analytics practice, leading the way on next-gen enterprise/functional evolution by connecting strategic choice with analytics and technology. Batra has more than 15 years of experience advising health care organizations across the ecosystem on critical strategic challenges, including leading businesses in biotech, medtech, health insurance,  and retail health care. Batra is the coauthor of Deloitte’s provocative Future of health point-of-view, speculating on the health care ecosystem in 2040 and the business models and capabilities that will matter most. Batra lives in the Tribeca neighborhood in New York City. He holds an MBA from London Business School and a BBA from the College of William and Mary.

Justine Lelchuk

Justine Lelchuk

US Process Intelligence Lead

Justine serves as US Process Intelligence Lead and sits at the intersection of Life Sciences and Digital Supply Networks for Deloitte Consulting LLP. She is certified as a Lean Six Sigma Master Black Belt who specializes in delivering process and operations excellence projects and leading efforts to develop internal process and operations excellence capabilities for clients. She helps companies by drawing upon advanced data-driven improvement approaches that get to the root causes of complex issues and lead to a reduction in complexity, improvement in speed and quality, and improvement in customer, and employee satisfaction.