The global digital health industry is set to grow to $258.30 billion by 2029, driven by a CAGR of 8.49% starting in 2024. The revenue per user is estimated to be $85.56. Investments in data analytics by big pharma are also projected to grow to $1.2 billion by 2030, marking a 27% rise. Additionally, investments in cloud computing, a crucial technology for enhancing sales and operational efficiency in the industry, are forecast to reach $59.3 billion by 2030.
Digital Transformation in the Pharma Industry
Despite these impressive forecasts, McKinsey’s research reveals that many pharmaceutical companies are not fully capitalizing on digital technologies. Companies that have successfully integrated digital solutions into their operations have achieved remarkable results, including a 20% improvement in product delivery speed, a 50% reduction in testing time, and a 50% boost in customer satisfaction.
However, many pharmaceutical firms face challenges in achieving similar outcomes, highlighting the complexities and barriers to effective digital transformation in the industry.
Common Challenges in the Pharma Industry
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Rigid Operating Models
The pharmaceutical sector has been slow to adapt to change, hindered by stringent regulations and extensive bureaucracy that reinforce established processes. For a long time, digitalization was perceived as a costly and risky endeavor, leading to reluctance among leadership to fully embrace it.
However, this issue has largely been addressed since 2020, as many companies were compelled to adopt more digitized operating models due to social distancing requirements, and they began to see the benefits of these changes.
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Lack of High-Quality Data Sources
The increasing interest in digital data and analytics within the pharmaceutical industry is often stymied by the lack of reliable data sources. Challenges include identifying existing data, ensuring timely access, continuous monitoring, and filtering out duplicates or siloed information.
As a result, many pharmaceutical companies still rely on manual data processes, which hampers fast decision-making and advanced analytics. The industry will need widespread adoption of standardized data algorithms to fully transition to digital methods.
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Talent Shortages
Effective digital transformation requires the right talent. Despite offering compelling projects and competitive salaries, pharmaceutical companies struggle to attract and retain the necessary tech expertise.
To address this, companies must rethink their hiring and retention strategies. Approaches such as “win rooms” and strategic hiring through acquisitions can be particularly effective in closing skill gaps in data science, design, product management, AI expertise, and other critical areas.
Read more: Importance of Data Analytics in the Healthcare Industry
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Low Adoption Rates
Many areas of the pharmaceutical industry still lack widespread deployment of digital systems. Companies often focus on developing Proofs of Concept (PoCs) without a thorough analysis of business needs and resource requirements for scaling these solutions. Even with increased leadership support, many organizations struggle to foster the mindset needed for the broad adoption of new software.
Addressing these concerns requires a multifaceted approach, including significant changes in corporate processes, the development of more reliable data sources, and the recruitment of tech-savvy talent. These elements are crucial for making the adoption of new software systems more attractive across the industry.
Question: What have been and will remain the biggest hurdles to applying digital and analytics in your primary functional area?
The average score is calculated on a scale of 1-5, with higher scores indicating more significant challenges. In healthcare, the primary obstacles to utilizing digital and analytics have shifted from issues related to strategic alignment and executive leadership to challenges concerning data quality and talent acquisition.
Common Challenges for Scaling Digital and Analytics in Healthcare: 2020 vs. 2022 Comparison
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Digital Companion Apps
Digital companions are increasingly valuable in supporting medications, therapies, and medical devices. Since 2020, both Software-as-a-Medical-Device (SaMD) solutions and standalone companion apps have seen steady growth in popularity. These tools enhance patient engagement and support, proving their effectiveness in complementing traditional treatment methods.
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Software as a Medical Device (SaaMD)
SaaMD (Software-as-a-Medical-Device) is gaining prominence in the pharmaceutical sector, with several notable applications developed recently.
AstraZeneca has been at the forefront, creating several SaaMD applications, including the AI-assisted cancer patient support platform HAYA, developed with Neosperience Health, and the FINZI app, designed for patients with unresectable stage 3 lung cancer, developed with IPG Health Frankfurt. Both platforms gather patient information, facilitate communication with healthcare providers, and aim to alleviate concerns during therapy.
Sanofi is also advancing in this area, collaborating with BrightInsight to develop a digital companion mobile app that offers seamless access to therapy and chronic disease management services. This app integrates with third-party services to create a connected and accessible medical ecosystem for patients.
Earlier this year, Roche and Startup Creashere introduced their cobas® pulse platform. This platform integrates third-party digital health apps to support clinical decision-making, digital biomarker collection, and vital measurements.
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Standalone Companion Apps
Standalone companion apps, including therapy support apps, quiz-based apps, and medication access apps, are gaining increasing popularity.
Pfizer’s IUdo app, launched last year in Qatar, exemplifies this trend. It streamlines medication access for patients and healthcare providers by facilitating program enrollment, qualifying for support treatment plans, and managing the patient’s medical journey through a mobile device.
Similarly, GSK has ventured into quiz apps with the release of Shine. This mobile app engages users with hormone-related questions, serving as both an educational tool and a survey platform. Shine helps medical professionals understand the concerns and needs of potential future clients while informing women about the effects of hormones on their bodies.
Read more: The Ethics of Healthcare Technology: Balancing Innovation and Patient Privacy
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Patient Online Course Platforms
Online platforms offering educational courses and resources for patients and caregivers are gaining significant traction and proving effective. A prime example is the 12-week Online Course for Chronic Pain, developed by Pfizer and Selfrapy. Patients who completed the course have reported noticeable reductions in pain intensity and improvements in their quality of life. These outcomes underscore the potential of digital education tools to enhance patient well-being and provide valuable support for those managing chronic conditions.
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Diagnosis-Specific EHR Add-Ons
An increasing number of diagnosis-specific add-ons for Electronic Health Record (EHR) systems are becoming available. A notable recent example is Lupus Advisor, launched in 2022. This EHR add-on is designed to improve lupus care by aggregating patient data, providing evidence-based treatment guidelines, streamlining documentation, and enhancing care coordination for individuals with the condition.
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AI-Based Predictive Modeling
The ongoing AI revolution has significantly accelerated the adoption of predictive modeling technology across various sectors. In the pharmaceutical industry, AI-based predictive modeling has been extensively utilized for years to analyze complex datasets and make informed predictions in drug discovery, development, and other processes.
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Disease Prediction
AI-based medical analysis is making significant strides in disease prediction. In March, Bristol Myers Squibb and Viz.ai announced their collaboration on a predictive AI algorithm that uses neural networks to detect potential cases of hypertrophic cardiomyopathy by analyzing routine electrocardiograms.
Audio analysis is also emerging as a valuable tool in disease prediction. Merck & Co. has partnered with Hyfe, a leader in cough analysis technology, to develop an AI-powered smartphone app designed to assist the estimated 1.2 million U.S. adults with chronic cough by analyzing their coughing patterns.
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Disease prediction apps. Cough Tracker by Merck & Co
Earlier this year, AstraZeneca and Bellvitge University Hospital launched a pilot program for Cordio Medical’s HearO app. This app monitors patients' speech patterns to identify potential congestive heart failure complications, achieving an 82% success rate in predicting heart decompensation events up to 22 days in advance.
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Drug Discovery
Drug discovery and development are being significantly accelerated through the integration of advanced AI-driven systems by companies such as Merck & Co. and AstraZeneca. Merck & Co. is leveraging the cloud computing capabilities of Saama Technologies’ Life Science Analytics Cloud (LSAC) to consolidate data, thereby reducing cycle times and R&D costs.
AstraZeneca has partnered with Benchling, a biotechnology R&D platform, to develop FRAGLER, an open-source solution that automates DNA search, fragmentation, and assembly workflows. The use of FRAGLER has resulted in algorithmic sequence searches that have achieved cost savings of 50-90% for the company.
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Trial/Research Management Systems
Pharmaceutical research, heavily reliant on data analysis, is increasingly integrating AI applications. As of June 2023, Sanofi's Plai app has provided a comprehensive overview of corporate activities, enhancing its research, clinical, and manufacturing operations through AI-powered analytics.
Bristol Myers Squibb is also making strides in advanced trial and research management systems. The company implemented Veeva Vault CTMS (Clinical Trial Management System) globally in under 20 months by 2022 and has partnered with Concert AI to develop a Digital Trial SaaS solution for oncology, urology, and hematology clinical trials. This collaboration aims to revolutionize trial design, recruitment criteria, and data collection standards to make the process faster, more cost-effective, and broader in scope.
AbbVie's Pega System Request Management Tool, a joint project with Pega and Accenture, is another noteworthy advancement. This platform has automated labor-intensive processes and daily routines through Robotic Process Automation (RPA) and case management functionality. AbbVie plans to further enhance the solution by adding preclinical process management features in the near future.
Other Solutions for Operational Workflow
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Calibration Management Software
AstraZeneca is leading the way in streamlining equipment calibration with their investment of $600,000 in Beamex CMX software. This transition from paper-based and manual calibration processes to a digital, automated format represents a significant advancement in operational efficiency. Other major companies are expected to adopt similar systems to enhance their calibration management and improve documentation accuracy.
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Category Management for Procurement
Pharmaceutical companies continuously strive to optimize their procurement processes through advanced technologies. A notable example of this is the collaboration between Novartis and Cirtuo. Cirtuo's Guided Strategy Creation™ platform will enhance Novartis's procurement operations by automating the collection, analysis, formatting, and organization of data. This will allow Novartis to concentrate on more value-centric tasks, streamlining procurement processes and improving overall efficiency.
Read more: Prognosis 2024: Unveiling Healthcare Trends and Strategies
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Partner Management Systems
Novartis has set a benchmark in the pharmaceutical industry with its electronic partnership management system. Collaborating with Astera's Centerprise Data Integrator, Novartis has successfully integrated forecast and sales data from various retail partners, including major chains like CVS, Target, and Walmart.
This innovative approach is likely to inspire other pharmaceutical companies to adopt similar systems to streamline communication and coordination with suppliers, contract manufacturers, contract research organizations (CROs), regulatory agencies, distributors, and other key partners.
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AR Implementation
Augmented reality (AR) is increasingly being utilized across various areas, including R&D, manufacturing, sales, marketing, and patient engagement. For example, GSK’s Hemoglobe, showcased at ASN 2022, leveraged immersive technology by combining AR with 360-degree wraparound video to create a unique and dynamic experience.
On the mobile front, Novartis and Flipside Health developed the ViaOpta Simulator app, which uses AR to simulate visual impairments on a user’s smartphone screen. The app serves as a valuable tool for gaining insight into the challenges faced by visually impaired patients.
Conclusion - Digital Transformation in the Pharmaceutical Industry
The pharmaceutical industry is undergoing a crucial digital transformation fueled by significant market growth and technological advancements. Innovations like digital companion apps, AI-driven predictive modeling, and advanced trial management systems are paving the way for improved patient care, streamlined operations, and accelerated drug discovery.
However, challenges such as limited data sources, talent shortages, and uneven adoption rates remain. To overcome these, the industry must prioritize data quality, foster innovation, and invest in talent and technology infrastructure.
The ongoing evolution of digital health technologies promises to revolutionize pharmaceutical operations and patient outcomes globally. Companies that proactively embrace these changes will lead the industry into a new era of efficiency, innovation, and healthcare excellence. As digital transformation continues, it is essential for industry leaders to stay agile and committed to maximizing these technologies' potential.
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