During the outbreak of coronavirus, it was evident that healthcare systems across the world needed attention and the pharmaceutical business again started booming. The pharmaceutical industry has garnered large number of profits with its blockbuster drugs. These drugs were protected by patents which accounted for large percent of revenues for these firms. Often when such patents get expired, medicine manufacturing companies incur losses. Research indicates that, mass expiration of such patents led to rise of generic drugs, that have drained up to 90% of sales of these pharmaceutical companies.
Rise of generic drugs and mass expiration of patents have flooded the market by increasing competition for pharma giants and greatly reduced margins on the drugs that had been the industry’s cash haven since the 1900s.
Many critics have accused these pharma companies of chronic under-investment within research and development, as the pipeline for the next generation of blockbuster drugs is now all but running dry. And given that it takes 12-13 years from identification of a potentially new drug until the time it reaches the market. This leads to a serious cash crunch for pharmaceutical companies who then enter into mergers and acquisitions, as well as do downsizing within the industry.
The industry is in need to reduce operational costs and improve cycle time within research and development. Here are 5 strategies that pharmaceutical companies can use to gain effectiveness and simplify R&D processes:
Outsourcing: For the last ten years Pharma companies have scouted opportunities to outsource a part of their research and development processes to emerging markets and cost-effective centres. This is done mainly so that the savings can then be relocated where the need for investment is the most. According to few research agencies, today most pharmaceutical and biotech companies outsource at least a proportion of their clinical trial management process.
Some experts, however, caution that outsourcing a process as critical to the future success of the company as R&D carries hefty risks. Companies have started to consider relocating only a fraction of research and development to lower cost centres. Innovation, the consultancy says, is still centred at home.
Business Process Management in companies: Business Process Management can assist pharmaceutical companies gain productivity through a combination of process improvement, standardization, and technology automation. Automation and optimisation of business processes can lead to a reduction in redundancies. Most manual tasks can be removed, considerably decreasing the risk of mistakes and thereby correcting the process.
The aim of Pharma companies is to automate and simplify clinical trials processes, minimalize errors and risks, improve communication and helping to enable a collaborative research environment.
Streamlining Processes: The pharma companies aim is to eliminate nonvalue adding activities, this methodology is used in manufacturing in years. However, many industries namely Healthcare, Banking, and, lastly Pharmaceuticals have streamlined and adopted “lean management” as the method to effectively increase the efficiency of operations and reducing costs. Simple Lean techniques can help improve workplace effectiveness within laboratories, while the focus on eliminating unnecessary steps can help speed up certain processes to reduce cycle times.
Augmentation of Big data: The much-praised arrival of Big Data Analytics huge volumes of data than, companies have ever been able to analyse can be done by using next gen frontier technologies such as ML and AI. These technologies hold great potential for pharmaceutical companies looking for insights that may yield the new development of drugs and increase production that the industry needs. McKinsey in its research, observed that big data may help pharmaceutical companies curtail down costs and increase patient safety by mining real world data from healthcare providers. These technologies will in long run considerably reduce cost for these companies.
Strategic industry partnerships: While not strictly a process excellence technique, the strategic involvement of pharmaceutical companies within external industry partnerships can help to streamline and improve operations that one company operating in isolation cannot. Hence, pharma companies are now collaborating on various fronts, especially in the research and procuring raw material for medicine production.
The goal of pharma companies should be able to work together through the global research and development community and share research and solutions that will simplify and accelerate the delivery of exciting new medicines for patients.