Health and Healthcare Systems

The pharmaceutical industry must be a driver of change in the digital era

MODEL RELEASED. Scientist examining microbiological cultures in a petri dish.

The lab has always been a space where scientific information was relatively guarded. Image: Getty Images

Stefan Oschmann
CEO, Merck Group
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This article is part of: World Economic Forum Annual Meeting

Over many decades, the pharmaceutical industry has delivered treatments that have improved the lives of billions of people around the world. This is human progress we can be proud of – yet we must not rest on our laurels. The advent of precision medicine and new technologies are going to impact our industry fundamentally. Here are five critical aspects.

1. Precision medicine attracts new competitors

Precision medicine holds great promise for patients. It will put us in a position to much better tailor therapies to individual needs, considering factors such as genetics, lifestyle and environment. But to achieve this, we need reliable data, which luckily is readily available.

Technologies such as genetic sequencing allow us deep insights into biological processes. Moreover, an increasing number of people are using wearable devices that produce a great amount of data on, or relating to, health. The market for this technology is expected to grow at double digit rates over the next several years.

The challenge is to systematically collect this data, make it available and draw insights from it. Cancer research is a case in point. Scientists and clinicians generate massive amounts of biomedical data every day. However, in most cases, this data is trapped in silos and not available to the researchers who need it the most.

Moreover, collecting mixed data and analysing it is not a traditional strength of pharmaceutical companies. It’s the home turf of technology companies in countries such as the US, China, Israel, and beyond. And these players are increasingly entering the healthcare sector, challenging our industry.

Pharmaceutical companies therefore must nurture their own digital capabilities and bring their deep expertise into partnerships with the new players. At Merck, we just announced our intention to form a new joint venture with Palantir Technologies, called Syntropy. Its goal is to unlock the potential of data in cancer research to facilitate scientific collaboration.

2. New paradigms emerge in Research and Development

For centuries, pharmaceutical progress resulted from advances in science. The lab was a rather confined space; scientific information was relatively guarded.

Today, science is enhanced by new technologies such as artificial intelligence (AI), which helps us screen discovery and early development chemical compounds with unprecedented efficiency, thereby accelerating drug discovery. Combining AI with other new technologies such as genome editing helps us to much better understand diseases.

Yet digital technologies bring cultural change. And they broaden the spectrum of disciplines needed to drive scientific progress. Chemists, biologists and all other natural scientists will remain critical. But to succeed, we increasingly need data scientists and the like. For companies to prosper, it will be essential to tear down barriers between disciplines and to accelerate collaboration in R&D.

At the same time, businesses must pay heed to the fact that researchers worldwide now have access to a vast amount of open source knowledge. In such an environment, it is crucial to be part of that global research community, well networked with leading scientists and institutions across the globe.

Pharmaceutical R&D expenditure, annual growth rate (%) Image: EFPIA, PhRMA

3. Production becomes much more efficient

Pharmaceutical production is evolving as well. Manufacturing biological medicines has been a very complex process. It still requires many steps – and therefore very high capital expenditures. Often, small biotech companies have simply been unable to afford this and had to sell their molecules at an early stage in the development process. This is about to change.

Manufacturing is being made more efficient by flexible end-to-end concepts that cover all phases, from drug development, to clinical testing, and production; and that work on a “plug and play” principle.

Continuous processing technologies will help us significantly reduce the number of production steps in biological drug manufacturing. All this will significantly reduce capital expenditure for manufacturers in the future, allowing a larger pool of smaller players to bring their molecules through the development process to production.

4. New options for healthcare systems under pressure

Many healthcare systems around the world are facing unprecedented challenges. Growing populations, demographic change and the rising prevalence of chronic diseases are exerting considerable pressure.

Against this backdrop, we should make the case for using technology to keep healthcare affordable and innovation accessible. Digital technologies and data allow us to focus reimbursements on what really matters: outcomes for patients.

Outcomes-focused healthcare systems, such as those advocated by the European Federation of Pharmaceutical Industries and Associations (EFPIA), could deliver better results at the same or even lower costs and help keep healthcare systems sustainable.

5. Technological progress raises ethical questions

Some of the technologies at our disposal today, like genome editing, raise fundamental ethical questions. No doubt, we need these technologies. But despite all the opportunities they bring, we must never lose sight of the tremendous responsibility entailed by their use. It is essential to have clear ethical guidelines and standards in place. To me, technology must always align with the principle of the freedom of individuals with inalienable dignity.

We must accept the challenge

All in all, I believe that there has never been a more exciting time to work in the pharmaceutical industry. Scientific and technological progress will enable further breakthroughs in the years to come.

Traditional players will continue to have a leading role in achieving these advances – if they adopt an agile, more digitally-focused mindset, strive to be a member of the global scientific community, and harness the potential of new production technologies.

As an industry, we should also advocate for leveraging data and technology to keep healthcare systems sustainable; we should openly address the ethical implications of the technologies we need to better serve patients around the world. I firmly believe that we can significantly drive human progress. And in my view, that’s a goal worth working for.

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