Historically, given the fundamental societal need for medicines regardless of economic conditions, the pharmaceuticals sector has been largely resistant to recessions – and has also generally been less severely impacted than other sectors by COVID-19. Indeed, in many ways the pandemic has put the industry into ‘surge’ mode. Companies are experiencing high demand for select products and have even been forced to discontinue some of their initiatives to focus on producing critical supply for COVID-19 management and treatment and medical technologies that best position pharmaceuticals for the new reality.
The end of 2020 marked the much awaited COVID-19 vaccine and beginning of the vaccine roll-out. In pursuit of the race to develop a vaccine for the virus, there have been collaborations between some pharmaceutical companies that would have been unimaginable prior to COVID-19. The overall effect of the pandemic will be different in different parts of the life sciences sector: pharma and diagnostic companies with COVID-19 plays can be expected to prosper – they will likely find new capital and new revenue streams. Indeed, for a select few, success in developing COVID-19-related products could spark bumper financial rewards. However, businesses with weaker balance sheets and those with significant dependency on supplying medicines and products for a range of elective procedures that have largely been shelved during the pandemic will face bigger challenges; as will smaller biotechs that prove unable to recover pre-COVID-19 valuations.
The pandemic has forced accelerations in other areas of life sciences as well – including developing digital biotechnology and medical devices and equipment to help doctors and care providers shift to interacting with patients through telemedicine, telehealth, remote monitoring and mobile health apps. The innovation in life sciences is likely to continue with additional advances in technology such as remote surgical systems and CRISPR. With IT at the heart of enabling these technologies, tech leaders will be faced with developing a modern architecture of data and systems from the ever-growing life sciences ecosystem.
In terms of technology, pharmaceuticals is a sector where data and advanced analytics are king. It informs every aspect of the business: deriving it from trials and R&D, integrating it with other data streams through the pharmaceutical supply chain, running advanced analytics across complex datasets from testing and trials, sharing it with collaboration partners, and, just as crucially, keeping it safe from competitors and cyber criminals. The imperative for CIOs in the sector is to enable and support the data ecosystem at the same time as facilitating the increased adoption of digital and automation technologies to expedite delivery of value.
With some pressures on liquidity and capital in the sector, 69 percent of CEOs in Life Sciences are placing more capital investment in buying new technology and digitization in preparation for the new reality (2020 KPMG Global CEO Outlook survey). However, 41 percent cited the lack of insight into future operational scenarios (new ways of working) as the greatest challenge in accelerating digital transformation. In a sector where M&A activity is high, pathways to acquire new technology have taken different shapes, such as joint ventures, major mergers, or developing new products in-house – all with the end goal of getting closer to the patient. While advancements around quantum computing and augmented reality are often being driven by the business (front office) more so than by IT (back office), CIOs reported that the number one business issue Boards are looking for the technology function to address is improving operational efficiency (61 percent), consistent with other sectors on average. Initiatives to accelerate time to market and new product innovation (with 91 percent of digital leaders doing better than their competitors), fueled by AI, RPA and digital technologies, are paramount to efficient research & development and manufacturing but will need to demonstrate a return on investment. With so much depending on collaboration and shared initiatives, facilitating connectivity and insight through the business value chain will be a key priority. Life science businesses need to ‘think like a VC’, making small targeted investments in their core business practices and adopting agile, fail fast practices to deliver value or pivot quickly – and IT needs to provide the responsive architecture to allow this to happen. Workforce enablement and delivering stable and consistent IT performance come close behind in Boards’ expectations of the technology function: a reminder that any pharmaceuticals organization depends equally on the insights of its people and the effectiveness of the technology that enables them.
While KPMG firms are some of the largest providers of services to pharmaceutical organizations globally, we take a boutique approach to client issues with a focus on flexibility, adaptability, and innovation. We recognize that there are many on-ramps to supporting IT transformation and we’ve tailored our services accordingly: