The Price of Drugs: Exploring New Realities in Pharma

Written BY

Emily Friedman

March 22, 2019

Drug discovery, development, testing, approval, manufacturing, marketing, sales, and distribution—the pharma industry is defined by a number of processes – some years-long and all highly sensitive – that are coming under increasing strain due to rising demand, changing regulations, pricing pressures, the rise of personalized medicine, and the explosion of available data from new wearable devices. In response, large, mainline biotech firms like Pfizer and Novartis, smaller CMOs (contract manufacturing organizations), equipment manufacturers and others involved in the highly fragmented pharmaceutical sector are looking to emerging technologies to improve efficiency, speed up research and production, widen margins, and guarantee quality and safety.

What is takes to develop a drug

In the past, drugs were discovered either by isolating the active ingredient from a traditional remedy or completely randomly; today, molecular biology or biochemistry is used to manipulate the metabolic pathways related to a disease, with major pharma companies increasingly outsourcing this research to universities and biotech companies. Once a compound (potential drug) is identified, it costs an estimated $1.3 billion to develop it and over a decade to gain approval and begin commercial production. In most nations, only a small fraction of potential drugs is ultimately approved by government authorities, and only a fraction of those ever provide a return on investment.

FDA approval comes only after heavy investment in pre-clinical studies and human trials, which help to determine correct formulation and dosing, as well as safety and effectiveness. Drugs can fail part-way through development and capital can dry up, forcing a company to discontinue testing. While new patented drugs are potentially the most profitable, the time to market is very long. Needless to say, the pharmaceutical business is high-risk, low reward.

Drug production

Pharma is one of the most wasteful industries, losing billions each year in manufacturing costs alone. Production has been plagued by inefficient communication, inaccurate reporting, and poor efficiency and reliability. This is as much the result of the fragmented, globalized, and extremely risk-averse nature of the pharmaceutical industry as the increasing complexity of drugs, stringent standards, and lack of financial incentive. Moreover, the equipment itself is difficult to operate, requiring trained specialists to use and maintain, and many engineers still use long, paper-based procedures. The combination of complex equipment and high stakes make pharma ripe for digital disruption.

Disruptive trends in Pharma in 2019

As in other industries, data is becoming one of the most valuable assets for pharma companies, but data has to be analyzed and delivered to real people in order to drive smarter, faster (real-time) decision making. The potential is great: Applying machine learning to aggregate data sets from all stages of drug production and distribution, including such sources as new wearable devices, smart machines, track-and-trace initiatives, etc. can help pharmaceutical firms meet regulatory scrutiny, reduce human errors, speed up time to market for new drugs, and even better market products. Though pharma is significantly behind other advanced manufacturing sectors in adopting new tech, a number of trends coming to the fore in 2019 are expected to force the industry’s hand.

Strained manufacturing operations

Biologics are large molecule drugs made from living organisms; used to treat diseases like cancer and autoimmune disorders; produced through complex, carefully monitored manufacturing processes (1,000+ steps); and given through injection or infusion (vaccines, gene therapy, etc.). Though the large majority of drugs on the market are small molecules, biologics are on the rise, requiring expensive manufacturing infrastructure. Drug manufacturing has also been impacted by serialization: Introduced to help combat counterfeit drugs, serialization – whereby each saleable unit of a prescription product is given a unique serial number – slows down packaging and requires manufacturers to update their equipment, software and training. On the other hand, serialization generates loads of data that could provide efficiency-boosting insights via advanced analytics.

Rising demands

Tight government price controls, supply disruptions created by natural disasters, job cuts and other factors have created a shortage of generic drugs and medical staples. There is also great demand for oncological and immune-suppressant drugs and therapies driving increased use of HPAPIs (high potency active pharmaceutical ingredients) in drug manufacturing. As the pipeline of major blockbuster drugs winds down, HPAPIs are becoming a more attractive market; and as a result, more pharma manufacturers are investing in upgrading existing facilities to meet their specialized containment requirements and protect employees. Pharma is becoming a tougher market in general, with politicians, health insurers and consumers calling for pharma companies to reduce exorbitant drug prices while also maintaining standards and production efficiency—a tall order.

Immersive wearable tech in pharma

If you can’t raise prices, then you need to cut costs elsewhere. For pharma companies, this means spending less time and money on R&D and going to market faster. As the drug pipeline shifts to meet demand for personalized medicine (targeted biologics), pharma companies are feeling the pressure to revamp their product lines, factories, and processes to become more streamlined and cost-efficient.

AR/VR for drug discovery

R&D spending in pharma has been rising parallel to the growing complexity of drug development, leading forward-thinking companies to explore AR/VR as a tool for discovering new drugs faster (and therefore cheaper). If VR-trained surgeons are able to complete procedures faster than non-VR trained surgeons, it follows that pharma researchers would innovate faster with VR than they currently can using computer graphics (CAD) and static models of molecules made of wooden balls and wires. Indeed, whether in the classroom or the lab, virtual reality is proving effective for visualizing and conveying difficult concepts while augmented reality can put interactive complex molecules into the scientist’s real-world environment.

Wearing a VR headset, drug developers can step inside a molecule or compound to see how it responds to different stimuli and quickly simulate complex drug interactions. Wearing AR smart glasses or a mixed reality headset, researchers can manipulate molecules and chemical structures in space – folding, knotting, and changing the shape of the molecules right before their eyes – and tweak a drug’s chemical makeup so it bonds to the protein in question, altering its function to the desired effect. AR/VR decreases the number of errors in the years-long process of drug discovery, which is essentially one of trial and error, by helping “drug hunters” iterate and improve (get to the right shape) faster. As a result, companies are able to develop better drugs with fewer side effects. Immersive tech can also improve collaboration among researchers around the world, eliminating barriers like distance and language by allowing two or more scientists to walk through the same chemical structure together from separate locations.

For manufacturing

Training and education

In other manufacturing sectors, augmented and virtual reality are allowing new workers to learn on the job without making mistakes as well as safely practice operating equipment before using a real machine. Likewise, AR/VR can significantly improve training outcomes for pharmaceutical workers. In addition to “practice runs” on complex pharmaceutical manufacturing equipment even before entering a facility; a process engineer wearing safety smart glasses can learn on the job while still meeting high levels of control and quality by accessing step-by-step instructions and other multimedia support for troubleshooting and repairing a machine right in her field of view or connecting via livestream to a remote expert for guidance and support. Operators and scientists can also use VR to learn the proper principles of aseptic technique and the proper procedures for different laboratory and production environments (ex. the specialized containment and personal protection requirements for HPAPIs). Beyond production, AR/VR can help explain new treatments to doctors and patients, and train nurses to administer a new drug or therapy.

Heads-up, hands-free information and documentation

In manufacturing in general, data from connected machines is unlocking the ability to perform predictive maintenance, saving manufacturers millions of dollars in downtime; so a systems engineer wearing smart glasses in a pharmaceutical plant could receive real-time, heads-up and hands-free notifications about, say, a location that will soon need replenishment or an instrument that’s predicted to fail, allowing him to catch and address issues in advance, thereby improving efficiency, speeding up production, and lowering costs. Anywhere along the production cycle, digital information can be beamed in this way to augment an engineer’s view and intuitively show him or her what to do. For instance, an engineer could use smart glasses to scan the QR code on a piece of equipment, automatically bringing up work instructions or an interactive diagram tailored to that machine. Engineers could access batch records heads-up and hands-free and record values and videos via voice command, never needing to take their hands or attention away from a process. This is also an easy and effective method for audit readiness.

Remote support

All of this instant, hands-free access to information – presented heads-up and in context – is designed to enable users to work faster and more accurately, but it’s not just the challenges of visualizing complex drugs and the use of incorrect, out-of-date paper procedures, manuals, and documentation that slow down time to market; the need to fly in specialists to a pharmaceutical facility when something goes wrong is another contributor to what has become a years-long, complicated, error-prone and unrewarding process. Immediate ROI and time saved can be had from adopting AR glasses for remote support, especially when users need vendor advice. With augmented reality software, the expert can even draw on the user’s display to highlight specific buttons or connections and drop 3D arrows into her real-world environment in the facility.

Conclusion

The possibilities for AR/VR in the pharmaceutical sector are great and desperately needed. Pharma companies should be taking cues from other advanced manufacturing sectors, which are already seeing results in training, efficiency, quality insurance, and safety through the use of AR glasses and VR headsets. Of course, pharma is a sensitive industry, and new devices open up new opportunities for hackers to gain patient data and secret drug research. Any investments in emerging technologies must be accompanied by investments in cybersecurity.

The Enterprise Wearable Technology Summit (EWTS) is an annual conference dedicated to the use of wearable technology for business and industrial applications. As the leading event for enterprise wearables, EWTS is where enterprises go to innovate with the latest in wearable tech, including heads-up displays, AR/VR/MR, body- and wrist-worn devices, and even exoskeletons. The 6th annual EWTS will be held September 17-19, 2019 in Dallas, TX. More details, including agenda and early confirmed speakers, to come on the conference website.

Further Reading