Pharma 4.0—the Key Enabler for Successful Digital Transformation in Pharma – part3

Thesis 2: Pharma 4.0 addresses Cost, Revenue & Reputation aspects and may consider also opportunities for innovative and disruptive approaches

Surveys and numerous case studies show that the benefits achieved in operations are in line with traditional financial targets: higher productivity, lower failure cost, faster clarification of deviations as part of root cause analysis and better data-based decisions. In development and technology transfer to production, the erosion of data and knowledge from development can be drastically reduced. Currently up to two thirds of all data obtained during development is lost during technology transfer.

In clinical trials, digitized scenario choices and AI-based data analysis can adjust trial directions towards faster and better outcomes. Standardized data sets are already available.

Conclusion: The evolution of digitization has an unstoppable impact on the future success of Life Science companies. Users who pay attention to preparedness as described in the Pharma 4.0 Operating Model, i.e. connected systems, processes, organization, employee qualifications and a silo-free, transparent culture within the company, also have a good external reputation for hiring the best experts from the market.

Thesis 3: Pharma 4.0 is a key success factor for disruptive innovation across the entire pharmaceutical value chain

and for the product portfolio, such as personalized medicines, ATMP/CGT and other biotech products

In the 21^st century, life science companies are evolving from mass production of block busters to adaptive manufacturing of innovative new modalities, ultimately toward personalized medicine.

The manufacture of personalized products, for example, will require completely different logistics, driven by two factors: 1. a very small batch size of just a few units and 2. the often very short shelf life of biological products. This requires decentralized and multi partner manufacturing and quality control, but a centralized quality assurance and quality governance function.

Added to this is the monitoring of regulatory compliance, which in future will have to be done more and more virtually and therefore also remotely. It will no longer be possible to inspect all decentralized production facilities in person as it is today.

This requires complete digitalization of all processes, based on connected IT systems and controlled data management throughout the value chain.

Thesis 4: Pharma 4.0 connects silos in organizations and orchestrates collaboration of industry, regulators, healthcare providers and other stakeholders

The Pharma 4.0 concept with its holistic approach is the prerequisite for a shift towards process organization with overarching business goals and a move away from individual goals of the various functions, departments and organizational units. As early as the 1990s, the concept of the Balanced Score Card revealed the “cross-border” cause-and-effect chains in organizations. Only the consistent implementation of the Pharma 4.0 concept as a prerequisite for successful digitalization and big data management can unlock necessary potential for speed and effectiveness. Systems can be connected across internal and external boundaries, enabling faster data exchange even between companies and authorities and thus shortening change management times.

Thesis 5: Pharma 4.0 reduces business risks and enhances patient outcomes

Business risks can arise if changes to the product become necessary as part of product life cycle management. This may involve updates to the API dossier if, for example, previously unknown impurities from the manufacturing process become known, if toxicological reports require the replacement of excipients in the formulation or if certain materials for production (e.g. “forever chemicals”) have to be replaced. The ban on polyfluoroalkylates (PFAS), a chemical compound which is in numerous essential production material as well as needed for the manufacture of APIs,  is just one example of this.

Drug shortages can also represent a significant business risk. With the help of supply chain digitalization, information can be provided with greater transparency. This allows predictive risk analysis and remediations. Simulations can be carried out to predict shortages, simulate crises propose alternative scenarios and carry out training (GXP, SOPs).

Furthermore, reporting obligations to the authorities require a volume of product-specific data that cannot be managed with conventional reporting technology or trigger significant high cost.

Thesis 6: The Pharma 4.0 Operating Model complements the Industry 1.0 to X.0 framework for the evolving life science industry,

embeds health regulations and applies pharma specific codes and terms

The principles of the Industry 4.0 concept are networking and the Internet of Things, artificial intelligence and big data, automation and robotics as well as digital twins and simulations. All of these are disruptive technological advances that require a bridge to the business management The Pharma 4.0 concept aims to build this bridge by addressing the specifics of the pharmaceutical industry: high regulatory density, industry-specific codes and terms, permanent interactions with the authorities over the entire life cycle of medicinal products.

A survey by one of the world's largest consulting firms has shown that the main obstacle to successful digital transformation is the inadequate preparation of the necessary elements and enablers. This is where the Operating Model Pharma 4.0 fills a critical gap: it describes elements and enablers and provides models for their maturity assessment.

Thesis 7: The Pharma 4.0 Operating Model includes the Elements Resources,

Information Systems (IT&OT), Organization and Business & Technical Processes and Culture and the Enablers Digital Maturity and Data Integrity by Design to prepare & realize the Holistic Digital Transformation

The “Resources” element describes the requirements for machines and equipment, all physical as human resources.  The ability to work in variable teams cross-functional work and a basic knowledge of all functions of a company are indispensable prerequisites for successful digitalization in order to tap into new potential within the company.

The “Organization and Processes” element describes the need for cross-functional process descriptions and their digital mapping in digital twins. This enables simulations of production processes, supply chains and even entire factories.

The “IT” element describes the role of IT in the organization, the “digital maturity” of the IT systems and their interconnectivity.

The “Culture” element is the equally important element. It describes the the unwritten rules that through social conformity impact on veryone in the organization for a way of working with a high degree of transparency, close proximity to business goals, an accepted quality culture and an unconditional focus on continuous improvement.

Stakeholder Communication

Pharma 4.0 is NOT a technology; it is a business operating model! (see Fig 1). Can you sustain your current operating model when the number of products and batches is exponentially increasing?

Will few, large investments in capital goods and operating them with as low as possible operational expenses be a viable model in the 21^st century?

The 20^th century was the era of mass production and mass consumption of goods.
A self-propelling economy that we now reference as industry 2.0.
The Resource skillsets/capabilities, Organization structures, Cultural unwritten rules and Information logistics that came along with that became part of our lifestyle and were gradually fine polished. 

Industry 3.0 and recently 4.0 replace in a different pace per industry the industry 2.0 operating model (Fig 1). These different paces are caused by the impact of this new science and technology on the different industries and the competitive advantages these give to companies adopting them.

With the first human genome being mapped for 92% in 2003 and the remaining gaps being closed in 2022, molecular biology is a fast-evolving science. Where most medicinal products in the 20^th century were discovered by applying the science of microbiology, in the 21^st century an exponentially increased number of new medicines is engineered by applying molecular biology.

This increased amount of products, product lifecycle changes (product differentiation) and smaller therapeutic areas and series (market segmentation) follow the example earlier observed in other industries. A clear example of that is the high-tech industry that changed from electronics to micro-electronics. All this opened the door to big data, and only digitalization and AI can help to analyze and to learn from data. Again, Pharma 4.0 describes the preparedness for it.

What can we learn from “companies missing the boat”?

These companies were extrapolating the future based on natural evolutions of the past and measured their success on critical success factors that no longer applied or were insufficient.
By the time they realized they needed to adapt, there was insufficient time left for that, and they were unable to unfreeze their organizations from the industry 2.0 operating model.

To recalibrate a company’s success factors, you need to take an outside in view (from the market/ecosystem to the company) and an inside out view (from the company to its impact on the market/ecosystem).

Outside-in observations

Inside-out Observations

Table: Examples of observations in a pharma 2.0 organization operating in a pharma 3.0/4.0 market

These observations need to be analyzed holistically and not from a single function perspective!

Conclusion

Referencing the 4 elements of the Pharma 4.0 operating model:

• Physical and human resources need to change from single skill to multi skill.
  In other words more adaptive to product and process changes.
• Organization structures must change more interoperable
  Culture need to change from protecting functional fences and no risk decisions, to holistic process participation and weighed risk decisions.
• And all would not be possible without reliable, real time, fit for purpose information exchange from a digital (small services, wide integration, decomplexing) infrastructure.