Embracing digitalization comes with cost-savings and security benefits that may niche production feasible in the near future.

The pharmaceutical industry is undergoing rapid change, especially in the current ongoing COVID-19 pandemic. Digital advancements in areas like systems integration, track-and-trace technology, and deep learning are helping the industry optimize its supply chain, improve safety, and even develop new drugs.

Not only do people depend on pharmaceuticals to treat illnesses, but the production of such products is a global enterprise. India alone produces around 20% of the world’s supply of generic drugs. And with any supply chain that is so dispersed, there is opportunity for manipulation.

In the pharmaceutical industry, counterfeit drugs are a huge challenge. It is a challenge that the World Health Organization (WHO) has been fighting for decades, and one that the pharmaceutical industry, through digitalization, is better-equipped to fight than ever.

The counterfeit drug problem became a concern of WHO in 1989 when its governing body enacted a resolution requesting the initiation of programs “for the prevention and detection of the export, import, and smuggling of, inter alia, counterfeit pharmaceutical products.”

10 years later in 1999, when the WHO published its guidelines for fighting counterfeit drugs, it noted the seriousness of the problem: “The counterfeit drugs that have been discovered have rarely been efficacious and, in many cases have been positively-dangerous and detrimental to public health.”

Despite the gravity of the situation, the responsibility of reducing counterfeit drugs largely fell on national governments. There was little the WHO could do besides encourage governments to establish agencies and enforce their own regulations.

Some countries are better-equipped to do this than others, meaning the health problems posed by counterfeit drugs are problems that the citizens of poorer and less-organized countries around the world must deal with.

Pharma 4.0 the solution?

A 2017 McKinsey analysis had suggested that “the biggest future impact on revenue and EBIT growth…is set to occur through the digitalization of supply chains.” In the years since that analysis was published, supply chains everywhere have been radically transformed. The Internet of Things (IoT) that is behind the digital revolution in supply chains is particularly well-suited to tackling pharma’s counterfeit challenge.

With the proper use of sensors, cloud resources, mobile technology, and the blockchain, customers and suppliers can track physical products wherever they go.

A hospital in Colombia that relies on products produced in India, for example, could track them in close to real time. The result is a degree of trust in drug manufacturing that has never existed before.

Efficient, trustworthy production

For IoT to truly control the counterfeit drug problem, one must have faith not just in the supply chain but in the production process itself. New, fully-integrated ‘continuous manufacturing’ drug production facilities are providing just that.

In short, continuous manufacturing is the term the pharmaceutical and other industries use for fully-integrated manufacturing, as opposed to step-wise manufacturing. Where quality assurance costs are high, an integrated process brings added value. Safety systems work to prevent substances from leaking out of the facilities. If a situation becomes critical, they shut down a plant in a step-by-step process, so that reduces safety concerns and damage to the plant itself.

In the pharmaceutical industry, continuous manufacturing is particularly suited to the production of large quantities of products. It allows for faster time-to-market and better consistency. These facilities rely heavily on digitalized processes, quality controls, and reliable delivery of raw materials (via improved supply chains) in order to operate.

Technologies like module-type packages are increasing the ability of manufacturers to easily incorporate modules built by different manufacturers, helping to promote more reliable, automated systems.

Digitization beyond production

The pharmaceutical industry is seeing benefits from digitization beyond added efficiencies and product trust. Technology is also changing research.

Recently, a Japanese pharmaceutical company partnered with a British startup to develop what they claim to be the first drug created with artificial intelligence. The new molecule was created by using an algorithm that checked different compounds against a large set of variables. The drug, for the treatment of obsessive-compulsive disorder, took a year to make. Similar research and development projects typically take as long as four-and-a-half years to complete.

This is a huge milestone for pharmaceutical research. If more new drugs can go from research to development in just 20% of the time traditionally needed, a whole world of new treatment possibilities seem close.

The path forward

Previously, some drugs may not have been cost effective for pharmaceutical companies to pursue. However, with increased speed of research comes the opportunity to make drugs more quickly and perhaps treat more niche illnesses.

However, bringing the same technological advances seen in large-scale production to niche production remains a challenge. Most production gains so far have come from adding efficiencies to large-scale continuous production.

But given how the industry has embraced the cost-savings and security benefits that come with digitalization, perhaps these challenges, too, will soon be overcome.