The Role of Digital Transformation in the Indian Pharmaceutical Industry

Digital transformation is no longer a new term—realistically, many companies and industries have implemented internal digital transformation projects for decades. By contrast, the pharmaceutical industry has been slow to adopt new technology. This slow rate of digital adoption stems primarily from complex regulatory requirements that companies must abide by.

However, in the past few years, the pharma industry has seen the rapid integration of various technologies; for example, Pfizer now uses artificial intelligence (AI) to speed up drug discovery and clinical trials. This rapid growth is seen in all major sub-sectors of the pharmaceutical industry, including the Indian pharmaceutical industry. However, the Indian pharmaceutical industry stands out because of its significant integration potential. According to a Global Market Estimates report, digitisation in the Indian pharmaceutical sector is expected to grow at a compound annual growth rate of 19.2% between 2024 and 2029.

This excellent statistic warrants a complete analysis of the reasons behind the rapid adoption, upcoming technologies, and potential challenges faced by Indian pharma companies during this growth period.

So, first, let’s discuss the reasons.

Drivers of Digital Transformation

Requirement for better data management practices

Pharmaceutical companies collect large volumes of data per day; for more straightforward comprehension, a smartwatch (commonly used to monitor the health of clinical trial volunteers) generates 2-5 GB of data per day. Pharmaceutical companies collect data from several clinical trial volunteers, amounting to thousands of GB of data per month. Consequently, these companies have had to implement new, more efficient and scalable methods of managing data, resulting in digital transformation of their systems.

Increased competition

The pharmaceutical industry has become increasingly saturated and currently has 3000+ operating companies with a network of 10,000+ manufacturing units. This rapid increase in competition has pushed companies to adopt technologies that will make them more efficient and produce higher-quality products. This includes not only the implementation of AI and machine learning (ML) but also partnering with other companies in the pharmaceutical and other sectors to develop AI algorithms, assistants and platforms.

Increased local and global demand

In recent years, Indian pharmaceutical companies have attracted increased global attention. India is currently the largest manufacturer of vaccines in the world and the largest provider of generic medicines. This increased manufacturing capacity stems from global demand; for example, our interview with Dr Ashish Sahai, the Head of Viral Vaccine at the Serum Institute of India, revealed that India is the largest manufacturer of oral and injectable polio vaccines, which are then used by the World Health Organization (WHO) for patients across the world. This increased global demand has pushed pharmaceutical companies to implement new processes and technologies to improve their manufacturing capacity and produce products of higher quality and better efficacy.

While these three are the main drivers of digital transformation in the Indian pharmaceutical industry, there are other factors as well, such as the need to be at the forefront of research breakthroughs, increased regulatory pressures, ever-changing customer demands, unfixed sales, and the need to improve profitability and sustainability. Jointly, these factors have pushed companies to adopt various new technologies.

Upcoming Technologies Supporting Digital Transformation

Digital transformation is a continuous process, and realistically, a company can never say, “We’ve completed digital transformation.” Hence, it’s necessary to focus on upcoming technologies and methods instead of those the majority have already implemented. There are several that fit this description.

First, of course, is AI!

AI has already been implemented in many processes of pharmaceutical companies—but let’s get real: there’s a lot more scope. AI can be integrated into pharmacovigilance, drug discovery, regulatory compliance, clinical trials, research and development, drug formulation, packaging, personalised medicine, and so much more! The implementation of AI in Indian pharmaceutical companies is still nascent, and so much potential is yet to be realised.

Advanced data analytics

We’ve already discussed how much data pharmaceutical companies need to collect, manage and use. In addition, there is a need to ensure data consent, validity, and relevance; data management is a huge task. Hence, advanced data analytics is an excellent upcoming technology to make data management more accessible and efficient. By integrating advanced data analytics and even predictive analytics, companies may be able to optimise all aspects of the operation – from raw material procurement to sales and clinical trial outcomes.

Robotic process automation

Robotic process automation (RPA) can handle repetitive tasks like regulatory submissions, documentation and data entry, reducing the use of human resources and decreasing the chances of human errors. While robots are generally used in various pharmaceutical processes, such as packaging, documentation is still primarily overseen by people. Hence, integrating RPA will significantly decrease the time required for these steps.

Digital twins

As a virtual model of a physical object, a digital twin can mimic all the real object's properties, functions and abilities. Digital twins can be used to test processes, production lines, and even drug formulations before actually implementing them in the real world. The use of digital twins can decrease costs by allowing companies to optimise the process before actually implementing it in the real world.

Quantum computing

Quantum computing can solve complex problems—this much we all know. It can be used to perform complex molecular and chemical calculations necessary for drug discovery to speed up the discovery process. Quantum computing can also be used to optimise clinical trial data, for example, by identifying candidates better suited to the trial among all volunteers or predicting potential outcomes.

However, the emergence of these technologies is still hindered. While finance is the most pressing concern (simply because implementing these technologies is expensive!), the adoption of these technologies in the Indian pharmaceutical sector is hindered by several other reasons.

Primary Roadblocks for Digital Transformation

The lack of skilled workforce

Workers with expertise in regulatory requirements and AI, ML, data science and other technologies are scarce. This lack of skilled workers results in hiring difficulties, which slows down the transformation process and increases the cost of implementation.

Ethical and privacy concerns

Safeguarding patient data and company documents is much more challenging when advanced technologies are involved, especially those like the Internet of Things (IoT). Hence, pharma companies must take additional precautions to ensure patient data is obtained, stored and used in compliance with ethical guidelines. The increased risk of cyberattacks and data breaches means pharma companies must implement complex cybersecurity measures.

Vendor dependence

Significant digital transformation requires experts and pharma companies to involve consultants and vendors to assist during these processes. This creates vendor dependence, raising questions about long-term sustainability and quality control. Vendors may also provide contracts or services with lock-in periods, creating additional financial burdens for the pharma company.

Conclusion

As you would have noticed, the Indian pharmaceutical industry has slowly implemented new technologies. This slow rate is due to various reasons, including strict regulatory requirements. However, increased competition, the need to implement efficient data management systems, and increased global attention will encourage the integration of various technologies, including AI, advanced data analytics, RPA, digital twins and quantum computing. 

The road to successfully integrating these technologies is complex, and pharma companies must overcome financial constraints, workforce scarcity, and ethical concerns. However, after coming through this tunnel, companies may find themselves with more efficient, more accurate, and more reliable processes, resulting in an overall improvement in product quality. 

FAQs

1. What are the key benefits of digital transformation for Indian pharmaceutical companies?

Benefits include accelerated R&D and drug discovery timelines, improved manufacturing efficiency, supply chain optimisation and personalised patient care.

2. In which processes can digital transformation be undertaken?

Pharma companies can implement new technologies in all operations, from documentation and drug discovery to clinical trials and marketing.

3. Have Indian pharma companies already started integrating new technologies?

Yes! Several pharma companies, including Sun Pharma, have already implemented technologies like AI and ML.