July 08, 2019 ON24
The life sciences sector is undergoing a significant transformation, driven by the same forces that have disrupted other industries. Technology is changing how physicians practice medicine, how patients manage their own health, and how pharma companies interact with healthcare providers.
Deployment of cloud-based solutions for drug discovery and clinical trials is on the rise, and artificial intelligence (AI) is increasingly used for prediction and prevention.
An explosion of patient data provided by wearables, sensors and remote health monitoring devices (known as the Internet of Medical Things, or IoMT) has become the driving force behind regulatory changes and new commercial models. External innovation is increasingly seen as a sustainable way to overcome patent cliffs and bridge expertise gaps.
Still, in this time of unprecedented change, life sciences companies continue to work towards an overarching objective: reducing costs and securing long-term growth while improving health outcomes.
How Digital Will Drive Growth In Life Sciences
The global life sciences industry is expected to reach $1.5 trillion by 2022, according to Deloitte’s 2019 Global Life Sciences Outlook, driven by tech innovations and new strategic partnerships.
Although per-person healthcare expenditure varies widely by country, global healthcare spending is on the rise. The compound annual growth rate (CAGR) for healthcare spending across 60 countries is predicted to increase by 5.4% between 2018 and 2022, compared to just 2.9% over 2013–2017, according to Deloitee. Health is estimated to account for 10.5% of Gross Domestic Product (GDP) in 2019.
However, challenges persist. Stiff competition, particularly from new market entrants and tech giants, increased scrutiny over drug pricing and value, declining margins and an ever-changing regulatory environment are just some of the factors affecting companies operating in this industry. Improving performance while managing risk and maintaining compliance has never been more arduous.
How Digital Impacts Life Sciences R&D
Companies in the life sciences industry know that digital technology is of pressing importance. Still, there’s evidence that organizations within the industry are still coming to terms with the basics of integrating digital technology within their workflows.
The highly complex nature of R&D cycles, tight regulatory restrictions in terms of marketing to healthcare professionals, and existing relationships between industry players slow down digital adoption.
Three in five (59%) pharma and biotech organizations say that their pace of digital transformation is ‘slow’ or ‘very slow,’ according to Across Health’s 2018 Multichannel Maturometer.
Digital’s Slow Adoption Causes Worry
While the majority of organizations acknowledge that digital technologies have disrupted their industry, and will continue to do so, the level of digital readiness is low. Nearly two-thirds (64%) of US healthcare providers rated themselves as being behind the digital curve, including 20% who were classified as laggards, according to a recent Unisys study.
“Conventional methods will not enable life sciences companies to keep up with the pace of change being set by new entrants, predominantly from big tech,” Vir Lakshman, Head of Chemicals and Pharmaceuticals at KPMG in Germany, said. “They will need to re-skill, re-hire and invest substantially in new technologies or partner, even in a junior role, with tech companies to fully realize the potential digitalization has to offer.”
The digital tech applications (and implications) are diverse and far-reaching, ranging from personalized medicine and virtual clinical trials to streamlined R&D cycles and supply chains. Digital technologies shouldn’t be looked at in isolation though. It’s the convergence of technologies and trends, such as patient empowerment and healthcare consumerism, that continue to drive transformation in the life sciences industry. One thing is certain: organizations can’t afford to fall behind the latest innovations that are redefining healthcare delivery and medical research.
Keep an eye on this space as we explore the challenges and opportunities facing the pharmaceutical and life sciences industries.