In our previous article, we had discussed Why Pharma companies should use Machine Learning ML for Demand Forecasting. In this article, we would be talking about some of the key challenges being faced by the Pharma industry, and how technology can be leveraged to overcome these challenges.
Even before everything was normal, the Pharma industry was one of the most resilient ones when it came to accepting and adapting to technological change. This is one of the reasons why Pharma supply chains have become so fragile and complex as they can get. As the Covid-19 pandemic continues to wreak havoc on countries around the world, Pharmaceutical supply chains have come under immense pressure to open up to change and accept the technological advantages in order to keep up with the demand.
Ways in which the pandemic has challenged the strength of Pharma Supply Chains:
The eminent risk of stockouts
According to a study by the University of Minnesota, 80% of the drugs marketed in the United States, including 19 of the 20 top-selling brand names, are made overseas. The global nature of supply chains, regulatory challenges, and high uncertainty makes stockouts a real risk – jeopardizing the health of millions of patients who depend on life-saving drugs.
Change in consumption patterns
As drugs are identified as potential treatments for Covid-19, the demand may quickly surpass the supply. These drastic shifts in consumption patterns have already been observed with experimental drugs for Covid-19 such as Actemra, Kevzara, Remdesivir, and Hydroxychloroquine, etc. In early April, the FDA reported shortages of hydroxychloroquine and chloroquine, antimalarial drugs that were speculated to be front-runners for a possible Covid-19 therapeutic. This shortage has impacted patients with Lupus, where chloroquine is a life-saving drug.
Long-term Cyclicity of a Recurring Pandemic:
Taking a page from history, the Spanish Flu epidemic hit in waves, the second wave more lethal than the first. If the Covid-19 virus proves to be seasonal, the impact of the pandemic might happen in waves over a 1-3 year period before stabilizing. The Pharma industry should be prepared for detecting and responding to new drivers of demand with very high momentum. Some new drivers of demand could be – preference for self-administered drugs due to a drop in hospital visits, a higher propensity for hoarding, and increased demand for normal uses of certain drugs.
How can the Pharma Industry overcome these challenges
A combination of strategic and operational moves leveraging Analytics and Data Science capabilities will help you get to the critical insights necessary for getting started.
Aim for bringing in transparency in your current state
Creating a transparent view of your supply chain and assessing the current state is your first step. Quick dashboards and ad-hoc analysis will give you a perspective of what is happening on the ground, and in the moment. The views should be built to assess 3 key stages in your Supply chain:
Multi-tier Supply Assessment
What are the most critical components of Supply? What is the risk of interruption? What is the next best action for high-risk Suppliers?
Where does your allocated Inventory lie both in-house and with distributors? What amount of this Inventory is finished goods vs blocked for quality control and testing? What is the volume of Inventory in transit?
What is the most realistic estimate of customer demand? Are there any specific NDCs with a disproportionate impact on demand? How is the demand distributed at the Distributor, Geo, and NDC level? Are the underlying assumptions of demand signals still robust? What are the emerging drivers of demand which might be getting missed?
Short term and Medium-term goals: Connecting now and tomorrow
Organize your efforts with a Covid-19 Command center which would provide a perspective on ‘Short term Crisis management’ and ‘Medium-term Planning Ahead’ initiatives. This would ensure that teams on the ground continue to have a bias for action, without getting blindsided by what’s coming ahead.
Crisis Management teams
Focus on the most immediate tasks where speed is of the essence. This team would focus on the highest impact disruptions and build quick dashboards/reports to get a transparent view of the current situation and generate critical insights for operational teams on the field.
Planning Ahead teams
Look ahead to answer questions on mid-term and long-term impact – like testing underlying assumptions, bringing in new intelligence from external analysis, identifying and integrating new signals and data sources into the analysis, and developing scenarios for the future.
Being future-ready through past experiences
The nature of the current Covid-19 pandemic is such that the arc of impact would be varied and staggered across the world. Take the US for example, every state and county is experiencing the pandemic differently. Hence, supply chain teams need to develop a scenario-based decision-making frame to assess how the pandemic would pan out, and what are their best moves at the moment. Here, the scenarios need to be built at 2 levels :
Evaluate the impact of the pandemic and effectiveness of the response at macro and micro levels across countries, states, and down to county levels on key metrics like demand and supply
Simulate the impact of moves based on a Pharma’s ability to respond to the crisis. This would involve tweaking Supply chain parameters like manufacturing and shipping lead times, safety stock assumptions to identify what is the next best action that should be taken by Channel Inventory, Demand Planning, and Manufacturing teams in the medium and long term.
Facing uncertainty and anomalies through technology
During times of uncertainty, one of the most powerful tools in the arsenal of Data Science is Anomaly detection. Over here, the unknowns are shifts in consumption patterns and cyclicity of recurring pandemic which would be hard to detect with human judgment. Once fed with the historic data, powerful ML algorithms can help you quickly spot unknown unknowns in your data, down to the most granular levels of detail – helping you set up algorithmic trigger points to flag alerts. This should be one of the key pillars of response for the ‘Medium-term Planning Ahead’ workstream.
Technology will change the nature of your Data
With more than 3 billion people in lockdown, this epidemic will bring dramatic changes in the patient, distributor, and regulatory behaviors around the world. Covid-19 is a perfect example of a ‘structural break’ in your time series data – with implications both in the short and the long term. Pharma companies might need to look for unconventional sources of data for getting insights during times of uncertainty. For example – Google Search trends have been found to be good predictors of demand for certain types of drugs, and can also help us find emerging Covid-19 outbreaks. They can also reveal symptoms like ‘loss of smell’ that at first went undetected.
The current crisis has plunged entire countries and the Pharma industry into times of uncertainty. Building a transparent view of the current state, scenario-based planning and proactive detection of anomalies are key tools on the frontlines for defense.
Proposal for a technical partnership
Implementation of any kind of solution within the Pharma industry is in itself a challenge due to a lot of out-dated internal processes that exist within the industry. It is therefore preliminary that any technical solutions company that you choose to work with needs to know the industry in and out before plunging in to provide you with a solution that would be more intuition-based rather than research-based.
With years of experience in working with Pharma giants and enabling their operations with modern solutions such as travel and expense management systems and apps for logistics such as shipping rate and freight class calculator and more, Archisys has been one of the best and affordable solution-providers for the pharmaceutical industry. We have been and will be the backbone for the Pharma industry’s digital transformation and upbringing.