The use of technology in the pharmaceutical industry has been growing since the 90’s.
The average IT-expenditure is currently about 4% of turnover. In the same period, the industry has found itself in almost constant turbulence, with challenges in different areas. These include a general drop in R&D productivity with critically few replacements on the way in relation to existing core products. There has been increased competition from generic products combined with a demand from governments in the Western Hemisphere for significantly lower prices in relation to an aging population. Compounding the situation, there has been a heavy tightening of legal requirements and an increase in R&D budgets, which together have led to a hitherto unseen zeal for cost-cutting and a continuing wave of consolidations.
It is hardly unlikely that the use of technology will play an increasingly prominent role in the pharmaceutical industry, especially within production and logistics, clinical trials, sales and marketing and the globalisation of R&D.
Production and logistics
Compared with other industries the pharmaceutical industry has an unrealized cost-cutting potential, which can be harvested through rethinking and increased automation. This holds particularly true for production and logistics. Connected ERP- and SCM-systems can create transparency and a faster response time across the business, countries and markets. A consolidation of IT-systems towards fewer but more global solutions will yield further savings.
A streamlining of the clinical trial process from patent to commercial exploitation presupposes a massive implementation of Lean principles with additional supporting innovative IT-solutions. This way the most profitable businesses have already managed a reduction in the average process time by 1–2 years – typically from the level of 8-12 years down to 6–10 years.
Sales and marketing
In sales and marketing the industry is looking at new options for replacing and supplementing physical meetings with the medical profession with internet-based solutions with a close connection to the company’s CRM system. In time such solutions will also be able to be used in managing individually adjusted medicine.
Commercial exploitation presupposes that part of the R&D effort is moved to the affected countries. A globalisation of the company’s innovative processes presupposes strong IT solutions that can guarantee both the necessary data security and an effective co-operation across the company.
Contact Lars Leth if you’re about to start a project within the pharmaceutical industry or you just want to know more.
Lars Leth, Managing Partner
+45 5143 4895
Cases within the pharmaceutical industry
The device was complicated but the pharmaceutical company’s wish was simple: A new device and software strategy to support a possible sale.
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IT expenses at this large pharmaceutical company were among the highest in the industry. The wish: A method to reduce costs.
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