Digitized, Interconnected Supply Chains could Revolutionize Pharmaceuticals…but are Pharma Companies Ready? | Deloitte US has been saved
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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:
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
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
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.