The markets appear to bear this out. Many leading pharma stocks bucked the trend of collapsing share prices. Yet what of those companies that are not manufacturing COVID-19 vaccines, or personal protection equipment (PPE), or building solutions to support remote care delivery?
The lockdown has had a significant impact on the sector: routine treatments have been postponed, while health budgets, already under strain, have been further stretched by the sudden surge in pandemic-related costs. Drug trials for non-COVID related treatments have been on hold, and supply-chain issues have impacted medicines and devices in production. While government bailout and stimulus packages have been rolled out, many, such as the CARES Act in the U.S., are focused on supporting healthcare providers either fighting the virus or directly affected by it.
The result is that many pharma and medtech companies are struggling during the pandemic – for instance, just 6% of Chinese pharmaceutical companies believe that sales will go up in 2020, according to a Deloitte survey.
So what are the prospects for pharmaceutical companies not directly involved in the COVID-19 response, and how do they plan for the future? They have seen revenue sources significantly impacted, with clinical trials disrupted and commercial efforts curtailed. As McKinsey points out, “it is becoming clear that the post-COVID-19 recovery will be a time of real change and, potentially, risk for pharma companies’ commercial organizations.”
“It is becoming clear that the post-COVID-19 recovery will be a time of real change and, potentially, risk for pharma companies’ commercial organizations.”
New areas of strategic focus
As with many sectors, a lot depends on individual companies’ digital readiness. For the likes of Novartis, being able to respond proactively to global lockdowns was all thanks to the major investments it had made in digital initiatives over the last few years. Chief Digital Officer, Bertrand Bodson, told Scrip that “many things that we had planned to take a couple of years to get into full motion have happened in two months. Everybody, including the regulators, has come together on this, and so we have been able to change gears strongly.”
Part of Novartis’ approach involved partnering with different subject matter experts, which highlights the value of investing both in online businesses and in partnerships within care ecosystems. These are set to be critical areas of focus for those organizations that want to thrive post-COVID, along with supply chain management.
As COVID-19 hit, many businesses saw their networks disrupted as factories and manufacturing facilities in Asia shut down. This was not necessarily a surprise, according to Roger Laforce, a Switzerland-based industry consultant. Producers were taking steps to secure themselves against volatility in supply from the region, but “the coronavirus accelerates this, I think, and will have a long-term effect on how supply chain management will be run.”
Each of these areas points to what a separate McKinsey paper highlighted as companies being “more focused on operational resilience and accelerating initiatives that enable more agility…and transparency through greater deployment of digital and analytics tools and automation.”
Digitizing, analyzing and automating in the post-COVID recovery
Companies looking to rebound quickly after the pandemic need to be considering how digital and data analytics tools can be deployed in every area of their business. For instance, while elements of clinical trials can never be virtual or remote, data science can play a significant role in helping speed up and improve the process.
“Currently, when a patient participates in a clinical trial, he or she has to go to the clinical site every week or month to perform certain measurements,” says Dina Katabi, the Andrew and Erna Viterbi Professor of Electrical Engineering and Computer Science at MIT. “This limits the amount of information available to the clinical trial to evaluate the efficacy of a drug, its potential side effects, and its overall impact on the patient’s quality of life.”
However, introduce automated analytical tools, and the accuracy and speed of data collection can be increased. As MIT’s Delta Electronics Professor Regina Barzailay points out, “All stages of drug development involve prediction.” These increase the cost and length of the development lifecycle, but “machine learning can automate many of these processes, utilizing large amounts of data that have been collected over decades about chemistry and drug effectiveness.”
One client is using computer vision to help identify bacterial overgrowth in Petri dishes.
But many pharma companies appear to be behind the curve with digital transformation. According to McKinsey, uptake of IoT solutions in the laboratory has been slow: “pharma is indeed behind, and dramatically so.” This is due to several factors, but most importantly, pharma “struggles to define a clear business case for technological changes.”
But there surely is a demand for digital solutions to industry challenges. Many medicines must be transported in controlled temperatures, but Cargosense estimates that 20% of temperature-sensitive products are damaged during transport due to a broken cold chain. Clearly, IoT has a role to play in remotely monitoring temperature and preventing tampering or theft. Technology can also assist with other areas of quality control. One client, for instance, is using computer vision to help identify bacterial overgrowth in Petri dishes. IoT, combined with blockchain, machine learning and data analytics, can assist with many other aspects of drug trials, manufacturing, logistics and patient care.
Recovery and the new normal
For many pharmaceutical and medtech companies, COVID-19 is as disruptive to them as it is to businesses in most other sectors. As they adapt to operating in uncertain times, accelerating digital transformation is critical. Many of the opportunities open to them were available pre-pandemic; the virus has simply exposed why the adoption of technologies and approaches could well dictate how well businesses respond. Novartis’ Bodson highlights a way forward when he says: “Nobody asked for this crisis obviously, but we want to take all the positives that are coming from it and extrapolate them for better times ahead. My job now is to make sure that all this sticks…and to keep designing experiences for doctors or patients in partnership with regulators.”
As well as the IT infrastructure capabilities within Orange Business, the Orange Group also has extensive experience in data science within pharmaceuticals, thanks to Business & Decisions Life Sciences, a team dedicated to transformation within healthcare, and specialists in digitizing healthcare records, Enovacom.
I am a technology writer with a decade of experience in business, technology and logistics. From starting off my career writing questions for a TV quiz show, I’m now spending my time looking at how the world of business is going digital and transforming a variety of sectors and industries.