Study: Pharmaceutical companies prioritizing healthcare IT investments
PARSIPPANY, N.J. — Three-in-four pharmaceutical companies are looking to derive greater value from the influx of healthcare information that includes anonymized electronic medical records and other real-world data, according to a report issued by the IMS Institute for Healthcare Informatics on Wednesday. New investments in a range of commercial operations applications — such as customer relationship management, social media or integrated multi-channel marketing solutions — were cited by more than 70% of respondents as a priority.
“Realizing the full benefit from new technologies will be a high priority for all life sciences companies as commercialization approaches are revised amid changing customer demands and a growing need for efficiency,” stated Murray Aitken, executive director of the IMS Institute for Healthcare Informatics. “Applications that are healthcare-specific, cloud-based, integrated, secure and analytically powerful will yield tremendous advantage to these organizations, and ultimately to patients and the health system overall.”
The study — Riding the Information Technology Wave in Life Sciences: Priorities, Pitfalls and Promise — found that pharmaceutical companies are aggressively shifting their technology-based approaches to align cross-functional activities, optimize their organizations and improve the effectiveness and agility of commercial teams. In addition, new investment is being focused on enabling greater patient engagement.
The report cites findings from an IMS Institute survey of decision makers in IT, marketing, sales, operations and management from 70 organizations who were asked about their current and planned use of new IT solutions. Overall, respondents expect continued cost reductions across the industry, and 40% pointed to planned cuts of more than 10% in their organizations during the next three years.
Accordingly, the largest global pharmaceutical companies will need to reduce combined operating costs by $36 billion annually through 2017 to maintain their operating margins and current levels of R&D activities. Pressure on operating margins is expected to grow as companies face rising costs at the same time drug prices are being constrained or reduced. With an estimated R&D cost inflation rate of 5% annually, organizations will need to reduce other operating costs to maintain margins. While the source of cost cutting will vary by company, a primary focus likely will be on sales, marketing and administration costs, which amount to nearly 30% of net sales. Of those surveyed by the IMS Institute, 87% indicated that their commercial organizations are being optimized through a range of approaches, including selective insourcing and outsourcing, resource shifting and implementation of previously unavailable technology-based solutions.
Integrated systems, cited by 85% of survey respondents as a need for optimizing their commercial organizations, are increasingly viewed as a means to improve workflow speed, eliminate conflicting data interpretations across departments, and reduce the cost of vendor teams managing manual data handoffs.
Life sciences companies are shifting their primary data storage to the cloud, and investing in new sales and marketing-related applications. Due to the sensitive nature of healthcare data, the adoption of remote, cloud-based technologies by pharma companies has been slow compared to other industries. Organizations are embracing efforts by cloud providers to accelerate progress in establishing and maintaining secure and compliant environments for the collection and storage of health information. As many as 70% of participants expressed a need to utilize third-party, cloud-based applications.
And new mobile applications for both patients and physicians are seen as increasingly important for strengthening healthcare engagement. Nearly 60% of survey respondents rated patient apps as extremely or very important to address commercial challenges, while 69% similarly rated investments in physician apps.
The full version of the report can be downloaded as an app via iTunes. The study was produced independently as a public service, without industry or government funding, IMS Institute for Healthcare Informatics reported.