Digitalization is the key
The faster the pharmaceutical industry responds to key challenges, the more it can benefit from global megatrends.
Covid-19 was a major stress test for the pharmaceutical industry. Enormous budgets and capacities had to be made available for research and development tasks. At the same time, the raw material supply chain was strained to its limits in some areas. Physical distancing and lockdown measures translated into fewer doctor visits, the cancellation of routine operations, and delays in many patients starting new treatments. As a result, many pharmaceutical companies experienced a significant slowdown in their growth.
Still, the excellent medium-term growth opportunities remain unaffected due three megatrends:
Growth in medicine spending, driven by an ageing population: In 2022, according to the UN, there were 771 million people aged 65 years or over globally, 3 times more than in 1980 (258 million). The older population is projected to reach 994 million by 2030 and 1.6 billion by 2050. As a result, by 2050 there will be more than twice as many persons aged 65 or older than children under 5 globally (1).
Growing access to medicine, currently counting around five billion people worldwide: the great efforts being undertaken to provide adequate medical care for the remaining two to three billion people will pay off in the coming decades.
- Significant increases in the pace of development of higher cost tailored medicine: personalized treatments based on patients’ unique attributes, such as age, gender, or ethnicity. Around 300 new drugs are expected to be launched over the next five years, which is significantly higher than average levels seen during the past decade.
Due to these three megatrends, the pharmaceutical industry can look ahead with great optimism. In 2020, the Pharma market accounted for 1.22 trillion dollars, with the US as the biggest market (30%) closely followed by Europe (27%). By 2026, it is expected to rise to 1.6 trillion dollars. Despite a consistently positive outlook, pharmaceutical companies face four major challenges.
- The pharma industry is under increasing pressure to reduce costs and provide more affordable drugs. There are many drivers including the expiry of patents and the corresponding growth of generics, mounting pressure from regulators and insurers, and the general trend for all businesses to be ‘faster, cheaper, better’.
- The COVID pandemic has disrupted our lives and the pharma industry more than anything else during the last two years. And the bar has been raised for the pace at which the industry drives innovation and adapts to change. The world has seen accelerated development and approval of new medications, and increased speed for product launch and delivery to market. In the future, producers need the ability to deal with demand volatility and improvements in throughput times for small volumes.
- Sustainability initiatives will be high on the agenda for manufacturers of pharmaceutical products. Significant changes are expected in the selection of materials for packaging, a focus on waste reduction, and a never-ending drive towards higher levels of operational effectiveness.
- Digitalization provides a final dimension to the future, and it impacts all of the trends and challenges discussed so far. Currently, the pharmaceutical industry operates as a series of disconnected analogue islands. A digital revolution will connect the islands to help meet the cost, agility, and sustainability targets, from SKU development until the finished serialized pack in the hands of the patient.
Of all these, the implementation of digital technologies in production is probably by far the most important, a key to address all challenges already mentioned. Many pharmaceutical companies have already set course accordingly or are in the process of redesigning their manufacturing and packaging processes. This can also be seen at Hapa, the global leader in the field of inline and on-demand digital printing solutions for the industry. Key growth in recent years has been Hapa’s range of late-stage customization and on-demand printing solutions, where digital technology is used to print onto blister lidding foil or directly onto sealed blister packs at the last possible moment before shipment. “This ‘just in time’ production methodology has helped our customers deal with small volume production and dramatically increase packaging line utilization by decoupling the production of the pack from the customization”, says Hapa’s Sales Director. The resulting advantages are extensive: “Our technologies include an average of 80 percent reduction in packaging material inventory, faster line changeover and setup, faster time to market, and a significant reduction in packaging material waste.” Digitalization pays off for everyone: for pharmaceutical companies, for people who need their suitable medicines quickly, and for the environment.