The pharmaceutical industry stands at a crossroads. Behind us lie simpler times of higher budgets, positive consumer sentiment, and the ever-present promise of blockbuster drug discoveries. If we continue on our present path, we can look forward to seeing even more of the challenges we currently face — falling profits, lengthier and more complex regulatory processes, a glut of expiring patents, dropping revenues, rising R&D expenses, and increasing consumer demand for lower priced alternatives — all amid a landscape that’s growing increasingly competitive.

There’s little doubt that the existing “large pharmaceutical” business model is rapidly becoming unsustainable. Which path can we take that will lead us to a better place? A place where innovation thrives and drugs can be brought to market in a timely, profitable manner. One of the answers may lie in solutions that have already been adopted by a number of large pharmaceutical concerns, including Sanofi. These companies are leveraging strategic partnerships with proven suppliers in the Laboratory services space.

Outsourcing programs, such the Laboratory Asset Management Program, may indeed represent a first step toward a more sustainable era of prosperity for the industry. Traditionally limited to the realm of facilities management and other ancillary services, the strategic sourcing model has proven itself to be an effective means to help rein in costs and waste associated with owning and maintaining expansive laboratory instrumentation, particularly across multiple sites.
Over the past several years, its impact has been felt beyond facilities management and into R&D proper, making a considerable impact on bottom-line laboratory performance reduced researcher man-hours for mundane activities, lower repair costs, lower total cost of ownership for assets, fewer capital expenditures, less asset depreciation, and even a potentially reduced tax burden.

By ensuring that service agreements precisely match instrument usage, enabling the strategic sourcing and bundling of service contracts, and providing highly advantageous economies of scale, asset management service providers have helped fuel substantial cost savings for pharma outfits. At the same time, instrument uptime has been boosted dramatically thanks to the on-site presence of qualified maintenance staff and in-demand instrument parts and components.

In recent years, asset management has evolved to the point where the majority of savings have been realized by leaning-out processes and matching service requirements to demand. Far from a one-size-fits-all solution, it begins by utilizing a systemic process of evaluating individual site needs, then developing programs tailored to address those needs in multiple ways.

While recent developments in asset management have produced substantial benefits, the model in its current state falls short of a lasting solution. What we, as an industry, need to do is extend the outsourced asset management model beyond its present boundaries to produce robust, sustained gains across the areas of research and development by fueling innovation and cutting the costs associated with drug discovery. 

This doesn’t mean, of course, outsourcing primary research activities to outside vendors (though this is also a current trend, especially with CROs in emerging markets). Rather, we suggest allowing those outside service partners to shoulder much of the routine and repetitive (yet resource-intensive) analyses, experimentation and information management, to free up vital internal personnel and equipment to focus on innovation, exploration and discovery.

Departing from established modes of operation is not without its share of challenges, however; a carefully planned change management strategy is key to successfully evolving legacy processes. For example, a specific operational framework that clearly classifies laboratory activities as “core” and “non-core” can provide both clarity and reassurance to existing essential personnel. All core activities would receive the full focus of internal resources. Non-core activities, such as routine sample testing and cell culture, would be sourced to external service providers. The benefits of applying such an approach to an individual pharma company would be multifarious: reduced researcher man-hours for mundane activities, increased resource utilization, fewer expenditures, and even a potentially reduced tax burden. In addition, with the right governance structure, we argue that it can improve performance and guarantee the flexibility that is required in today’s environment to cope with the rapid pace of change.

How do people in the pharma industry utilize lab instrument informatics — asset utilization, census data, density data — to help in the decision-making process for both capital purchases and instrument utilization? What should they do? Our suggestion is to use sophisticated data-collection technology and analysis to get value from all your business processes. Use analytics to become a strong competitor in the industry and get drugs to market at a faster pace.  

According to Competing on Analytics: The New Science of Winning by Thomas H. Davenport and Jeanne G. Harris, to become an analytics competitor one needs to institute the following practices:

• Champion Analytics from the Top
• Create a Single Analytics Initiative
• Focus on Your Analytics Effort
• Establish an Analytics Culture
• Hire the Right People
• Use the Right Technology

The next generation of applications and differentiation within the pharmaceutical industry would be information management decision systems. We understand this is an issue that has been identified and there have already been some attempts to improve it; could partnering with a specialist in the field be better than trying to do it in-house? 

This could be accomplished by extending the asset management model to information and data management integration, such as electronic notebooks, asset utilization and reliability. Today, multiple platforms, databases and devices are employed to share vast amounts of information — from method development and drug data to clinician communications and marketing programs. The task of just sorting through mountains of data, let alone disseminating it effectively, is a tremendous drain on resources and a source of potential errors. Working with a partner that employs a consolidated, centralized laboratory information management system can not only help eliminate redundancies inconsistencies and bottlenecks, but reduce costs and shorten time to market as well.

So how do we get there from here? The first step is to open a dialogue with service providers that can leverage best practices gained through long-standing partnerships with leading pharmaceutical companies. Together, we must draw the new roadmap that will help the pharmaceutical industry navigate its way into a new era of efficiency, innovation and profitability. The rate of change in the pharmaceutical industry is increasing. In order to remain a major contributor, we must get ahead of the change, embrace it and utilize it to the fullest. 
 

Dr. Maurizio Sollazzo is a consulting partner at BDP LLC. Jeanine Pippitt is sales development manager at PerkinElmer OneSource. Paul Luchino is Northeast general manager at PerkinElmer Analytical Sciences and Laboratory Services. For more information about this article, contact [email protected]. Dr. Solazzo can be reached at [email protected].