Pharmaceutical companies face no shortage of industry headwinds. From inflation to supply chain volatility, it’s a long—and at times, daunting—list.

To make matters more complicated, one issue often bleeds into the next, such as unanticipated increases in product demand and supply chain delays causing global shortages of common prescription drugs like Trulicity and Adderall. Without operational efficiency and agility, pharma companies will continue to feel caught in an endless cycle of roadblocks, struggling to simultaneously address surges in product demand, rising operational costs, and ongoing supply chain vulnerabilities.

In sports, the best offense is a good defense. The lesson for the pharmaceutical sector is similar: Internal improvements protect against external obstacles.

To stay ahead of industry headwinds, pharma manufacturers must invest in more robust digital transformation strategies centered on increasing production rates and operational agility, all while reducing costs. Let’s take a closer look at how tackling internal business improvements enables pharma leaders to navigate three external challenges in 2023: rising inflation rates, antiviral/antibiotic shortages and market delays, and pressures to support global medicine access.

Rising inflation

Across almost every industry, organizations are feeling the squeeze of rising inflation rates, and pharmaceutical companies are no exception. Pharma manufacturers not only face major delays in accessing essential materials, but they’re also under pressure to identify cost savings within all operations.

Digitalization offers critical solutions to tackling the financial challenges in today’s pharma sector. Planning, scheduling, and supply chain resilience—all driven by digital transformation efforts—help businesses operate more efficiently, thus offsetting rising costs and overhead.

For instance, with more visibility and foresight into material flows and inventories, pharma companies can potentially save millions of dollars annually just in inventory storage alone. In another example, continuous manufacturing has been shown to accelerate production timelines and free up floorspace to allow for more production lines in each footprint. In fact, implementing continuous manufacturing and/or process intensification is one of the top three most important steps pharma companies are taking to improve operational agility in the next three to five years, according to research by AspenTech in collaboration with FT Longitude.

Drug shortages and delays

This year, we’re witnessing an especially difficult flu season combined with increased cases of respiratory illnesses like RSV. This has caused unanticipated demand for antivirals and antibiotics, as well as substantial drug shortages.

Recent events indicate a critical need for increased agility across plants and pharmaceutical supply chains. Establishing the right level of adaptability hinges on reevaluating established processes and technologies to encourage more proactive planning efforts. Manufacturing environments must be flexible and able to accommodate a variety of product formulation process, streamline inventory and shorten lead times to keep up with fluctuating demand.

The implementation of smart manufacturing technologies will allow pharma manufacturers to optimize production and prevent unplanned downtime of key equipment that would delay product delivery. Smart manufacturing starts with an evaluation of existing capabilities to identify inefficiencies and areas of opportunity, which can involve infrastructure and resource assessments, batch processes, and maintenance checks.

For example, suppose a company notices time to market for products is longer than the industry average. This discovery could lead to the implementation of continuous manufacturing and other process intensification measures to accelerate end-to-end production timelines, increase productivity, and minimize resource waste. Likewise, by relying on electronic batch records instead of manual, paper-based checks, companies can minimize errors and expedite reviews and releases, reallocating time to replenishing supply.

Continuous manufacturing investments accelerate drug manufacturing processes in response to market shifts, while ensuring the flexibility required for emerging modalities that are complicated to manufacture, like biologics and cell and gene therapies.

Global medicine access

In addition to inflation concerns and production delays, there’s increasing pressure among the pharma industry to improve global medicine access. The Access to Medicine Foundation’s 2022 Access to Medicine Index noted progress in this area among the world’s leading research-based pharma companies, but they’ve also been clear that there is still a lot of room for improvement. Only 15% of access plans include at least one of the 27 low-income countries included in the research scope.

The journey to more equitable access to medicine globally is long and complicated, but digitalization offers a foundation for new opportunities to improve global rollouts. This includes many of the same efficiencies used to address rising inflation, drug shortages, and market delays. However, it also leans on accelerating the pace and reducing the cost at which new drugs can reach remote or underserved communities. 

For example, data generated through AI-powered digital workflows allows manufacturers to pivot existing processes to meet new distribution needs. The best ways to deliver products to underserved communities is often not considered early enough in the drug development process. Yet, these communities often have specific and unique distribution requirements, that can be more easily addressed through smart manufacturing processes that improve drug design and increase visibility into production. These insights allow leaders to make data-driven decisions about manufacturing timelines, costs, and other accessibility factors, ahead of when there’s the greatest global need for vital medicines or distribution is already underway.

Of course, digital transformation isn’t a one-time process. It requires continuous investment in scaling AI and data analytics capabilities to drive consistent results. With practice, pharmaceutical manufacturers involved in the development and manufacturing of new therapies can learn to shift gears more quickly and much earlier on in the drug manufacturing process.

Digitalization future-proofs pharma companies

Robust digital transformation takes intentionality and effort—and a commitment to break free from outdated systems and processes. Fortunately, increasing operational efficiency and agility is already a leading digital transformation goal for 44% of pharma companies, according to AspenTech’s research.

Likewise, the implementation of sophisticated digital solutions requires a commitment to technology adoption, strategic investments in smart manufacturing technologies, and the willingness to scale AI and data analytics capabilities over time. With the right digital transformation strategy, any pharma manufacturer can achieve these results and help mitigate external challenges through a refocus on operational readiness.

Today, that means overcoming rising inflation, drug shortages, market delays, and global medicine demands. While we don’t know what new challenges tomorrow will bring, digitalization ensures pharma managers are ready when the call comes. 

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Kelly Doering leads the marketing team for the pharmaceuticals business unit at AspenTech and has held numerous roles in product management, technical marketing, and business development since 2007. She completed a postdoctoral fellowship at Boston Children’s Hospital and holds an MS and PhD in Nutritional Sciences & Molecular Biology from the University of Connecticut, and a BS in Health Sciences and Natural Sciences from Worcester State University.