Digital Transformation in the Pharmaceutical Sector – Digital Life Sciences
Nov 20, 2015 | by Daniel Pelke | 0 Comments

Virtually every industry is currently facing the challenge of digital transformation, including the life sciences sector.

But what exactly does the digital transformation entail and what consequences does it have?

When it comes to digital transformation, we talk about the ‘third wave’ of IT. The first wave was the introduction of the server-client architecture which followed the mainframe principle. The second wave was Internet technology, and we are now talking about a third wave, that being smart, networked devices.

As I see it, digital transformation is based on two main pillars:

  1. On the one hand, we are finding that the pace of sensor development is gaining speed. They are becoming more accurate, more specialized, and more compact. But most of all, they are growing more affordable, meaning they can even be used as disposable products. Sensors are used everywhere, whether in industry, in cars, at home, or in the field of medicine. They measure sounds, vibrations, movements, temperature, pressure, humidity, and much more.
  2. The second factor is that IT is now readily available and easy to consume in any quality and quantity and at any time. The vast amount of data produced by sensors, mobile end devices, traffic management systems, and much more can nowadays easily be stored centrally and can be analyzed in a matter of seconds, in some cases even in real time. Correlations obtained from these data produce unprecedented findings about such matters as production processes, causes of illnesses, and the usage of wearables.

The digital transformation is driving industry change

These new findings are putting many companies in a position to rethink their business processes and models: Manufacturers of aircraft turbines are no longer selling their products, but are rather offering service times based on continuous data analysis and preventive maintenance. Makers of complex mining machinery are becoming system integrators and specializing in optimizing all of the equipment needed for mining. Tractor manufacturers are providing farmers with services to determine the best time to harvest crops. This takes into account the current growth stage of crops, the fertilizers required, weather forecasts, soil samples, and the prices crops can be expected to bring on the commodity market.

The digital transformation takes hold in the pharmaceutical sector

The first signs of movement can already also be seen in the life sciences industry. Deloitte wrote in one of its forecasts for the life sciences industry published this year: “Healthcare is becoming more technology-enabled with wearables, sensors, digital medicine, etc.” It should therefore come as no surprise then that we are already hearing about contact lenses which measure your blood sugar level and send this data to a smartphone for monitoring. We have also already heard about health patches containing sensors and active substances that establish a feedback loop via a smartphone. Competitive forces in the pharmaceutical industry are also set to change. Producing a health patch and coming up with the active substances and sensors is not the core competency of a pharmaceutical company, as there are many others who can do that too. Collecting and analyzing the data and offering new services to the patients will be critical. At the moment, other companies still lead the way here. In the not too distant future, it will be a viable business model to market the effect produced by an active ingredient as a service, rather than selling the substance itself. This will entail moving away from transaction-based product sales to a product-as-a-service model. The necessary app will, of course, not be purchased in the pharmacy, but obtained directly from the producer via one of the well-known app stores. This means that the way products are sold is also changing, moving away from retail sales toward direct selling. Even R&D and licensing are undergoing change. Any smartphone user will know that a new update is available for every app on a near weekly basis, meaning that further development of the product still continues even after it is already being used by the patient. Such frequent software updates for complex medical equipment may also be a reality. How does licensing work under these conditions? Does every update need to be checked and approved by the respective regulatory authorities? There will be new approaches in this area.

I look forward to the challenges and will keep you updated.