The Digital-infused R&D Opportunity in Pharma

Digital Technology Creates New Opportunities for Pharma R&D

Senior digital leaders at large pharmaceutical firms are keeping a close watch on digital-infused R&D – the extensive use of digital technology in drug discovery and development – as the next big opportunity that technology is creating for their firms. While digital technology in clinical contexts isn’t new – CardioMEMS ran a trial five years ago where an implantable sensor wirelessly transmitted artery pressure information to a database – today’s symbiosis of big data, computing power, hardware, and connected platforms is making everyone, including pharma firms, sit up and pay attention. To better understand the industry’s view on the size of the overall opportunity, we surveyed senior digital leaders and subject-matter experts at ten large pharmaceutical firms.1 These firms comprise half of the top twenty pharma firms by revenue; each spent between €2.6 billion and €8.2 billion on R&D in 2015.2 Their conclusion? Digital innovation and technology in R&D will:

• Create tens of millions of extra value annually… Eight of the ten digital leaders rate the size of the overall business opportunity from digital innovation and new technologies as “large” or “very large” (see Figure 1). This corresponds to tens of
  millions of dollars each year that will go to firms that monetize the opportunity (see Figure 2). But don’t raise your glass too early: to take full advantage, firms face several structural changes to their operating models (see Figure 3).
• …but business objectives for digital are well-defined. Digital leaders see digital innovation and new technologies creating value in many aspects of the R&D business. Eight of the ten digital leaders believe that digital technology improves patient care or patient data collection (see Figure 4-1). Faster drug discovery and higher drug value are the other significant value creators. Looking at a firm’s commercial model, value creation on the revenue side is a more lucrative path than cutting operational R&D costs via digital innovation (see Figure 4-2).
• …and innovating in clinical data and analytics. Zooming into specific R&D responsibilities, digital technology will primarily create value from opportunities in clinical data and analytics (see Figure 5). Advances in data collection, data types, and analytical processing power enable health-related outcome measurement or set digital biomarkers, which both drive drug value; as a result, senior digital leaders are watching mobile health monitoring, wearable, and big data enabling technologies closely (see Figure 6). While many therapy areas will benefit from digital-infused R&D, firms can capture the most value from digital innovation in cardiovascular (see Figure 7).