The times are interesting for the pharmaceutical industry in India. It’s facing mixed situations wherein on one hand, changing lifestyles, newer diseases and stronger strains of viruses and bacteria are opening up opportunities for pharmaceutical companies to innovate and offer new drugs. However, on the other hand, a lot of these pharmaceutical companies sell to countries across the world. The fluctuating global economic scenario coupled with newer companies mushrooming within the country, has made the market highly competitive forcing pharmaceutical companies to look at newer ways to make their products innovative and have faster go-to-market times.
Also, stringent regulations, which keep seeing revisions or modifications are making things even more difficult for this already highly regulated industry. A recent PWC report titled ‘India Pharma Inc; Changing Landscape of Indian Pharma Industry’ pegs the Indian pharmaceutical market at Rs. 72,069 crore as against Rs. 65,654 crore in 2012. However, the report also observes that the overall industry has actually seen a slowdown with its growth going down to 9.8% from 16.6% in 2012.
This slowdown is attributed to the new drug pricing policy and the regulatory interventions, a uniform code for sales and marketing practices and compulsory licensing. The report also notes that the implementation of the National Pharmaceutical Pricing Policy 2012 by the government has resulted in margins erosion from 20% and 10% to 16% and 8% for retailers and stockists, respectively. This decrease in the stockist margins led to a significant uncertainty among many stockists regarding the feasibility of staying in business due to lower profitability post the margin reduction.
Growing challenges and need for IT
Srinivas Tadigadapa, Director – Enterprise Sales, Intel – South Asia gives a contrasting view and says that the Indian pharmaceutical industry is growing at a rate of 15% and attributes this growth mainly to large exports to U.S. and European markets. He says, “About 40% of all FDA approvals between January to July 2013 came from India.” This is definitely an indicator that there is a lot of activity happening in the pharma sector within the country.
Be it countering a slowdown or tapping new market opportunities, pharma industries are forced to look at ways to tighten their processes so as to bring themselves up to speed with the changing market dynamics. According to Rohit Sinha — vice president, head of sales (RoW), Blue Star Infotech, if we look at the entire pharmaceutical segment in a compounded manner, the typical business challenges they are facing include compliance, effectiveness of sales and marketing, the material science and productivity.
One driver is stricter regulations. FDA is playing a much larger role in drug discovery, drug development and drug marketing globally. They are taking efforts to ensure that the efficacy of a drug is maintained, counterfeiting can be reduced and co-vigilance is enhanced which is forcing pharmaceutical companies to ensure stronger compliance.
He explains that customer expectations for deliveries in other markets is quite different from what Lupin has seen in India. For example in US, a customer will have five or six other suppliers besides Lupin, supplying the same product. The only differentiators therefore are quality and service.
Says Pazhayannur, “These companies which up until now, enjoyed a fat share of the market, are going to see their profits go down significantly because cheaper drugs are entering the market and they don’t have innovative drugs to compete with them, as drug development itself has become expensive. FDA is also clamping them down in terms of how they should develop drugs, which is making things even more difficult.”
“This is forcing them to run business in a different manner because profitability is getting affected. IT up until now, was never looked at as a key business driver. The profit margins and monopoly never required them to make business more efficient through IT,” he adds further. However, from an IT perspective, like any other industry vertical, the larger pharmaceutical companies that have been around for more than a decade, have had home grown systems which have traditionally been more departmental in their design. They typically would have bought it in a siloed manner with a different application for each process such as QA/QC, CRM, supply chain etc. on a departmental basis.
Pazhayannur explains, “Each department had its own budget in the past, bought their own IT and ran their applications in a captive manner, and did not feel the need to collaborate with other departments. The generic drug companies which are just coming up don’t have any legacy. For these companies, time to market is the most critical driver. They are now looking at IT from a greenfield perspective.”
The days of automation
Unlike industry verticals such as BFSI or telecom, the pharma sector was not exactly upfront in adopting IT. Technology was adopted mostly if the regulations called for it or if there was a dire need felt for the business to do so. According to Pazhayannur, the level of IT penetration in many pharma companies is about 40% only. Many functions of a pharma company are still not automated, let alone connected. For instance, in some of the pharma companies, the artwork for packaging is still done manually. They make hard copies of the artwork, circulate the copies within the departments wherein, the changes to the artwork are annotated using a pencil or a marker pen. The artwork is then put back again in the envelope and sent to someone else for his/her approval.
While some pharmaceutical companies use e-mail, excel sheets and pdfs, only a few have integrated work flow management systems that have all the business rules, the project management paths, automation built-in. However, the times are changing. Pharmaceutical companies are looking to consolidate their operations on a single platform that can be used by different departments such as regulatory affairs, supply chain, packaging, QA/QC so that these applications can be managed easily.
They are learning from manufacturing companies and using mobile devices on the shop floor, and using technologies like RFID and pick to voice or in their warehouses. They are using telematics to ensure that a truck that left a certain warehouse can be tracked through its entire journey.
To track and maintain its assets, Jubilant Life Sciences has implemented a consolidated asset management application over a virtualised environment. Mehta informs that this centralised application that is available across all its plants, has helped the company reduce its application maintenance cost, thus reducing its overall CAPEX and OPEX cost of implementing and maintaining these assets.
For the control of the automated production facility, Jubilant uses process control systems (PCS) from ERP and batch records produced by PCS are used for validation purposes. Bill of material and process descriptions facilitate the formulation and re-use of recipes. To prevent counterfeiting, the company has adopted serialisation and track and trace methodologies using 2D barcode on tertiary, secondary and primary packaging, as per the government regulations.
Danait of Lupin while talking about the IT scenario in his enterprise says,”We implemented ERP around 10 years back. IT requirements four or five years ago, were very ERP centric. The IT department was essentially restricted to ensuring 99% uptime for these systems. However in the last few years, the focus for IT has been shifting from being an business enabler to a business partner.”
“Most requirements for systems that we get today are a result of a mandate to drive higher productivity, be it at the salesforce or the supplier or the manufacturing and quality assurance side, and for better decision support from finance and supply chain,” he says.
He further explains that customers regularly rate the company as suppliers on the On Time In Full (OTIF) metrics. The metrics are measured in a fairly stringent manner. Even if a single line item out of a 100 line item sales order is missed, the customer can rate the entire order as a miss. The company’s overall ranking gets affected because of this.
“Our supply chain is therefore really important to us and this is where we are investing heavily to ensure that our planning and supply chain processes work like a well oiled machine,” says Danait. For Lupin, processes such as change control management, deviation management, root cause analysis, are being automated to ensure that processes are reliable, robust and can capture precise data as opposed to manual processes. In most cases, there isn’t one solution that the company can use off the shelf and therefore, ends up using a combination of solutions.
“We use SAP as a core ERP platform, and some quality processes have been automated within the platform itself. For some of the specialised processes like change control management and deviation management, we are implementing standalone, off the shelf solutions customised to our requirements.
“The data that gets generated in SAP, gets stored in the database. However, for data pulled from machines, for instance, HPLC machines, which are chromatograph machines, there is a different system called Chromeleon that handles that data,” informs Danait.
Compliance driven IT
It would be stating the obvious, but given the serious implications that a wrong medication or over dosage of a drug can cause, the pharmaceutical sector is under constant pressure to ensure that all regulatory requirements are rigorously followed, right from drug discovery to the point the medicine reaches a pharmacist or a doctor.
Most of the regulatory bodies are quite prescriptive about the compliance requirements. They are easily available and can be easily integrated into a pharma company’s processes. Instances of pharma companies facing implications arising out of non compliance have forced Indian pharma companies to ensure compliance because the punitive damages associated with these implications are far more than the investment required in IT to avoid them.
“The Indian pharma sector makes up 30 to 40% of the global generic drug market. The US FDA is therefore ensuring that they are compliant. This is forcing pharma companies to invest in the right level of procedures, training people, and using the right technology to ensure quality is consistently maintained,” says Pazhayannur
According to Purswani of Atos, Pharma companies are looking at ensuring that they comply with the CFR 21 standard which defines the criteria for electronic documents and digital signatures. They have implemented auditing tools to ensure that they are compliant and have the minimum documentation required for compliance in place.
He is of the view that PLM, which was majorly a manufacturing tool for sectors like auto is today being looked at by pharma companies for drug manufacturing. Such tools are helping them ensure that their products getting exported to countries such as Africa are in line with the compliance requirements.
Batch records which is the entire history of production batches, today is a manual process in most parts of the world. Being a manual process, it comes with the overheads of having a maker and checker, creating and handling physical documents and subsequently legalising it, and retrieving data if something goes wrong with the batch.
Lupin is trying to move towards digitising this process so that everything is captured at the machine level itself. Readings such as temperature, pressure and air flow can be directly captured from the machine, and automatically getting plugged into batch records.
“This comes under the category of manufacturing execution systems (MES) and we are doing some pilots within our facilities. Most of our peers are either thinking about automating this process or are also looking at pilot projects. We are looking at automating this to ensure assurance of compliance and greater reliability of the process. We have to have systems which are inherently 21 CFR compliant,” says Danait.
The company has also setup an e-learning platform to ensure that all its workforce is trained on standard operating procedures or SOPs, where everyone doing any operation on the shop floor has to go through an online training program and gets certified. The training manager regularly monitors this platform.
Jubilant Life Sciences on the other hand, has invested in a Quality Management System designed specifically for Life Sciences and Pharmaceutical industry and is using it for content management and collaboration, enterprise data optimisation, innovation, business discovery and to manage business processes including change management, deviation/incident, market complaints. All these processes automated help the company in better investigation, CAPA (Corrective and Preventive Action), effectiveness and stability management.
According to Mehta, the quality management system provides real time audits for internal and external purposes and also allows having an annual product review. The solution not only helps automate the process but along with the collaborative tool, also facilitates in reacting to the market in a timely manner, which automatically leads to increased productivity and thereby reduces the manufacturing cost.
Mobility in pharma
The mobile revolution means almost everyone today carries a mobile phone. Most enterprise employees today have some sort of a smart phone that can be leveraged from an enterprise perspective as well. At a corporate level, this has made the trend of Bring Your Own Device or BYOD quite popular. However, in the larger scheme of things, a mobile device can help automate several manual processes and add a real-time element to employee productivity.
For instance, there is huge amount of review and approval happening in pharma companies due to stringent compliance requirements. A simple task may need to go through several physical reviews and approvals for the change to get applied. At the field force side, today, a Medical Representative or a sales person mostly receives his tasks for the day through an SMS or an e-mail or even over a phone call.
The outcome of their meetings is usually recorded physically and after having completed these rounds, they come back the same day or the next day and then put together a report, whenever they find time. The reports are entered into the database manually by a central team.
According to Pazhayannur of Persistent, with the advent of smart phones, a lot of this is being digitised. For instance, using a mobile application, the MR can enter data into online forms while he’s meeting a doctor or after he has met him. The data is synchronised with the central database almost immediately.
He gives an example of how mobile devices can help at the factory floor and says, “On the shop floor, the operators have to do a lot of audits on the manufacturing line. The same line may be used to manufacture different products, or same product for different customers. Therefore, the same drug has to be repackaged and white labeled for different customers. They have to ensure that the right information is printed on the right drug at the right time.”
Tasks can be set up for different operators using a project management tool. The job could be to audit a particular line to see if it is manufacturing a particular medicine for a particular retailer. The artwork for that drug packaging can be sent to him on his mobile device. He can then compare the art work with a batch of drugs by randomly picking from them and check if the images match. If the image is incorrect, he can then stop the process.
Within the enterprise, Lupin too uses mobile devices to capture machine data. An operator standing near a machine will note down readings on his mobile device which can be used to calibrate the machines. This improves productivity, ensures compliance, and eliminates manual checks.
One of the highlighting initiatives that the company has taken up to prevent counterfeiting is SMS-based monitoring systems. Lupin creates a unique 9 digit identification number which is printed on the medicine strip. The end-user, on buying the strip can send the code to a service number. He then gets an SMS response authenticating the strip, giving its batch number, manufacturing date, expiry date etc.
“There is a limit to how many times this verification code can be entered to prevent any malpractice. Typically, it is made for the end customer who might be apprehensive about the medicine he is buying. We are today printing about 350 million codes covering most of Lupin’s products,” informs Danait.
Gupta of Cipla informs that his company has moved workloads to public cloud and is exploring hybrid cloud solutions, while it continues to invest in mobility solutions to improve the effectiveness of the field force. According to Mehta, mobility helps in having greater visibility of field force, especially in remote areas and respond to end users quickly and in timely manner. It also enables pre call planning and helps in clinical effectiveness, capturing real time information, and real time monitoring with the concept of anytime and anywhere. Furthermore, it not only helps increase productivity but also allows socialising with end customer in real time, which has a positive impact on customer delight.
Tadigadapa is of the view that mobility helps connect the last mile at the chemist level. He also talks about how Intel is working with partners who are reaching out to pharma companies to create mobile apps for salesforce automation, that can be optimised on tablets and notebooks and help them capture data at the field level and improve turnaround times.
What lies ahead
With pharmaceutical companies increasing their attention towards IT, the sector is bound to see a lot more uptake of technology solutions on the manufacturing side. This will only spur further investments in IT across all quarters of a pharma enterprise to create a connected organisation. Sinha of Blue Star says, “The pharmaceutical sector according to Gartner spent $1.2 billion on IT and IT services in 2010. IT is definitely used as a lever and the spend is going up in areas which help these companies improve quality control and last mile visibility.”
Giving his perspective on the future of IT in the pharmaceutical sector, Purswani says, “In India, the spend on IT in the pharma sector would be $55 billion by 2020.” On one hand, these organisations are looking at how they can better leverage their ERP and technology investments to meet the expectations of the market. On the other, adoption of technologies such as mobility, is only increasing collaboration and connectivity within the enterprise. The plethora of data generated out of this connected pharmaceutical enterprise will show the way for further investments in business intelligence and analytics to make sense of the data and create better products. It will surely be interesting to see how the IT scenario in the pharma sector pans out over the next few years.
harshal.kallyanpur@expressindia.com