Why Quality must adapt to trends from consumerism to eroding margins.
The Quality function has already undertaken massive transformation efforts in the last few years, in response to a more stringent regulatory environment, new delivery mechanisms, and increased supply chain complexity. The need for further change will only be amplified by emerging trends, such as digitalization, new business models, and disruptive competitors. Of particular importance is the technological progression that is allowing personalized medicine, e.g., new modalities like gene therapy and drugs for rare diseases, which will require organizations to adapt their approach to quality and support a decentralized supply chain.
Below are a number of significant changes occurring in the industry ecosystem that will make it necessary to adapt current Quality functions to become ft for purpose:
New patient-centric business models
Life Sciences organizations are instituting a wide variety of new business models, e.g., beyond the pill services and solutions that are driven by new technologies and patient-centricity; outcomes-based care models in response to payer scrutiny of prices and value; and a greater focus on niche patient pools through the provision of specialty and rare disease drugs, as well as personalized medicine and combination therapies. By 2030, leading Life Sciences organizations are likely to explore and introduce many additional innovative business models. As companies define their roles in this new paradigm, the Quality function will need to expand its scope to ensure the quality of consumer-focused products and solutions across an increasingly stratified patient and end-user landscape.
Fragmented supply chains
As most Life Sciences organizations operate on a global scale, they are subject to the unique geopolitical developments and legal parameters of different regions. In recent years, supply chain complexity has increased through the growing use of contract manufacturing organizations (CMOs), as well as centralized and outsourced back-office processes. As manufacturing continues to expand into a variety of locations throughout the world, supply chains will be further fragmented, thus expanding the scope that Quality must oversee. This will be challenging without localized quality expertise and practices, including a focus on ensuring that local third parties abide by the same quality standards as the organization. Finally, the shift from batch manufacturing to continuous manufacturing is likely to further accelerate with biologics and personalized medicine – creating an impetus for quality to keep pace.
Disruptive digital technologies have game changing potential for Life Sciences companies. For example, AI can be used in real-time release testing to dramatically reduce lead times and costs. Advanced data & analytics (D&A) will have the same impact on research & development (R&D) timelines and costs. Technologies with significant untapped potential, like blockchain, are likely to have a major impact on assurance functions. In order to take advantage of the efficiency, accuracy, and customer-centricity promised by these innovative technologies, associated quality will need to undergo strict assurance and control.
Continuously evolving regulatory requirements
The regulatory landscape is moving away from the three dominant bodies – the Food and Drug Administration (FDA), the European Medicines Agency (EMA), and the Pharmaceutical and Food Safety Bureau (PFSB) in Japan – toward an increasingly country-specific approach. This shift is creating a fragmented regulatory landscape, even while directives like the European Medical Device Regulation (EUMDR) seek to harmonize global regulations. Ultimately, companies will need to balance local and global approaches to quality.
There is more pricing scrutiny in Life Sciences than ever before, due to patent expiry of blockbuster drugs, greater focus on specialty drugs, new entrants in the Asia-Pacific region, and increased adoption of generics and biosimilars. As companies adjust their pricing strategies to reflect a lower return on investment (ROI) (in some cases as low as 1-2 percent), they must also evaluate the cost of Quality. To achieve this, they must evolve Quality from a cost center to a value-adding entity and distribute ownership of quality across all functions.