Returning the Focus to Science

Since the economic downturn in the U.S., companies have explored ways to improve business efficiencies in a tough economic climate. Pharma companies are no different. But in addition to economic pressures, pharmaceutical research and development (R&D) has faced unparalleled business challenges in recent years — including increasingly stringent health authority requirements, unsustainable fixed cost models, and the complexity of managing numerous vendor partners and technology systems.

Unlike companies focused on marketing consumer goods, pharma bears the responsibility of continuing to deliver life-saving medications and technologies at a reasonable price to patients. This leaves life science companies with a key question — how can they help improve patient outcomes while decreasing the costs of producing important medications?

In addition to this, during the last 15 years, pharmaceutical R&D spending has grown 5% annually, but output in terms of new molecular entities approved by the U.S. Food & Drug Administration (FDA) has dropped 22%.¹ The pharma industry needs to figure out how to adapt to fewer new drug approvals while still continuing to improve patient outcomes.

Technology presents an opportunity for companies to begin improving efficiencies in the R&D process. Accenture notes that maintaining basic operations and completing transactions can consume up to 80% of the time of a pharma company’s IT resources. As a result, IT departments have limited capacity to focus on technology innovation. Resources are bogged down with administrative duties, when IT capabilities could instead be leveraged to streamline and optimize R&D processes.

For example, Pfizer launched an internal program to dramatically improve its R&D productivity. Working with its research partners, it utilized cloud computing to develop an innovative technology platform to capture operational and clinical data for clinical trials, giving easy access and control over all its data. This cloud-based model for aggregating clinical trial data could potentially replace Pfizer’s traditional technology infrastructure for clinical trials, reducing the need for capital expenditure and significantly lowering annual IT operating costs, all without sacrificing quality or outcomes.

The benefits from Pfizer’s cloud-based data aggregation are numerous, and its initiative will likely lead the way for other pharma companies to follow suit. Technology like cloud-based pay-as-you-go models allow companies to focus on the science, rather than the operations, of clinical trial execution.

It also opens the way for companies to participate in pre-competitive collaboration opportunities with industry peers. In the past three years, 18 R&D locations have closed in the U.S., with an additional 14 in Europe.² Accenture predicts that by the end of this decade, many pharma companies’ R&D operations may no longer own or invest in their technology solutions. With these challenges facing R&D, it is essential that pharma companies identify where they can work together to keep costs low.

Improving data aggregation, utilizing cloud computing and fostering seamless collaboration are just a few ways that R&D can elevate life science companies as digital businesses (click here to view Seven Digital Trends for Better Patient Outcomes). Pharma should also look to give personalized services to its customers. By focusing on relationships at scale, life sciences companies can tailor its services to customer segments, such as patients, providers, payer, regulators and pharmacists. Companies can also explore maximizing design for smart analytics, developing an active defense approach for securing intellectual property and extending virtualization concepts to networks.

For most pharmaceutical companies, this change in approach cannot come soon enough. They are constrained by the cost of drug development, the complex web of regulations they face and lengthy approval timelines. Life science companies are navigating complex issues, but through efficiencies in the R&D process, they can focus on what’s most important — the science behind better patient outcomes.

References

1 “Workforce Reductions in Pharmaceuticals Outsourcing, External Innovation and Collaboration Will Drive Industry Forward”, GBI Research, June 12, 2012, http://www.marketresearch.com/GBI-Research-v3759/Workforce-Reductions-Pharmaceuticals-Outsourcing-External-7025797/.
2 Accenture Research based on CMR’s 2012 Pharmaceutical R&D Factbook, Thomas Reuters, and EvaluatePharma, 2013.

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David Boath is managing director of Accenture Life Sciences Research and Development. He has worked with numerous top 40 pharmaceutical clients, helping them improve speed-to-market, reduce costs and lower risks. During his 15 years with Accenture, he has led various groups in process consulting and change management, and has held geographic and group leadership roles. He can be reached at david.d.boath@accenture.com.