Technology’s Impact on Life Sciences Companies Analyzed in Deloitte Report
Artificial intelligence (AI), cognitive technologies, automation, and computing power are advancing at an accelerating rate. From improving drug safety and patient outcomes to shortening production times and increasing process efficiencies, technology is disrupting the life sciences sector and allowing companies to provide more custom and targeted patient care. Science is also advancing rapidly, and drug approvals reached a 21-year high. In 2018, the trend is expected to continue.
In 2018, life sciences companies will need to embrace technological and geopolitical changes. To innovate in the Fourth Industrial Revolution, they will need to be forward-thinking and collaborative, ready to adopt new operating models. Technology companies, both large and small, are already poised to disrupt the sector, and they will be collaborators as well as competitors. This is according to Deloitte Global’s 2018 Global Life Sciences Outlook: Innovating Life Sciences in the Fourth Industrial Revolution: Embrace, Build, Grow, released today.
“The life sciences sector is experiencing quite a bit of disruption, and it’s creating transformative opportunities that should be embraced in the near term. The organizations that effectively manage this type of change will be better prepared to improve profitability and stay competitive,” said Greg Reh, Deloitte Global & US Life Sciences Sector Leader. “The life sciences sector will need networked leaders that think outside the current system and drive fast focused innovation.”
As the industrialization of life sciences continues to evolve, companies should consider these key trends and strategies:
Embracing change and uncertainty
- Exponential changes in science and technology: Artificial intelligence (AI), cognitive technologies, automation, and computing power are advancing at an accelerating rate. From improving drug safety and patient outcomes to shortening production times and increasing process efficiencies, technology is disrupting the life sciences sector and allowing companies to provide more custom and targeted patient care. Science is also advancing rapidly, and drug approvals reached a 21-year high. In 2018, the trend is expected to continue.
- Uncertainty coming from pricing pressures, value-based contracting, the geopolitical climate, and tax reforms: Pricing, along with securing market access, is expected to continue to be a top priority for life sciences companies in 2018. Value in the eyes of patients and payers is expected to increasingly drive pricing, not simply cover R&D expenses. Also, tax reforms worldwide may create incentives and disincentives for the life sciences sector and impact future investments. In an era of geopolitical uncertainty, the impact on pharmaceutical companies is still being assessed.
Building forward-looking organizations
- Future of Work: The future of work will be more networked, devolved, mobile, collaborative, team-based, project-based, and fluid. Organizations need to adapt to new leadership mindsets, work built around technology, a skills-based economy, the evolution of a new AI, and a focus on mission, values and ethics. Informed leaders of the future will recognize these forces of change, how work is being redefined, and the implications for individuals, organizations and public policy.
- A culture of courage for uncertainty: An ethics-driven culture will be a massive focus of regulators in the next few years. Regulators expect the life sciences sector to be proactive, rather than just react to inquiries or defend themselves. Forward-thinkers will need to anticipate and build the kind of AI-infused world we want to live in while focusing on security by design and mitigating cybersecurity risks.
- Data integrity, and maximizing the value of data: The biggest roadblock to future innovation is everyone working in a very siloed manner. Companies need to create a working environment where data is actionable and that values data integrity. As companies move away from silos and start to achieve data integrity, big data and analytics will help unlock the potential of disparate sources of data. Increasingly, data will better serve decision making at the enterprise level and provide a better understanding of emerging risks.
- Patient trust and centricity: To become more digitally-enabled and patient-centric, life sciences companies are using a range of strategies, including patient-centric corporate culture, collaborative healthcare ecosystem and digital partnerships among others. Organizations are looking to engage patients earlier to better understand unmet needs impacting trial design, patient recruitment and resilience. Products and services that better meet patient needs and improve treatment regimens will receive higher acceptance by payers, providers, and regulators.
- A smart, cross-functional regulatory approach: All stakeholders will need to continually evaluate the individual and collective impacts of new regulations and take a proactive approach to managing regulatory change. With regulations becoming more global, companies are moving towards self-regulation and a culture of quality. Everyone’s goal is to make processes much simpler, and companies are starting to align their regulatory groups to accelerate the process.
Growing through partnerships and new operating models
- Alliances and Partnerships: Over the next few years, alliances will become more important for accessing external expertise and technology. New collaborations will be established where the best scientific or technological fit can be achieved. Technology giants are expected to be collaborators and competitors.
- New Operating Models: Establishing collaborative ways of working is high on the agenda for life sciences organizations, and will require breaking the constraints of the current system. New operating models will welcome diverse and collaborative efforts from a cross-sector of industries, public and private collaborations, and alliances between nonprofit and for-profit organizations. Companies will want to adopt new capabilities to support external partnerships and collaborations with health systems, patient advocacy groups, and other data aggregators.