According to PwC’s ‘From vision to decision Pharma 2020’ report, productivity in the pharmaceutical sector faces a bleak future. The processes organizations use to discover and develop new products remain the same, innovation has declined and regulations are becoming more onerous while market conditions are getting harsher with global healthcare costs rising. From 2005 – 2011 the annual average cost per approved molecule was $4.2 billion – 50% more than the previous five years.
Changing the discovery and development process will be essential in shaping the pharmaceutical sector and in addressing some of its key challenges – cloud computing can facilitate faster innovation. But pharma organizations have been late to adopt cloud-based technologies and this has led to them managing large complex on-premise software.
On-premise solutions can be expensive and difficult to upgrade and pharma organizations often holdback on new implementations for years. This means they are unable to take advantage of technology enhancements which would support faster, leaner innovation and help meet many of their goals. There are recurring issues around data residency, snowflake solutions and internal vs public cloud that contribute to the industries slow adoption of cloud-based technology.
The snowflake solutions effect
There are several aspects of the drug discovery process that can be streamlined using cloud-based solutions, but there is a common roadblock organizations encounter when it comes to migrating to the cloud – customizability. Pharma organizations that have a lot of legacy on-premise software find it very expensive and difficult to upgrade because they have created unique systems, much like a snowflake, for specific tasks.
Upgrading and recreating these niche implementations across all systems can be challenging, but now organizations are becoming increasingly comfortable with cloud technology which enable them to addressing their software needs from a more holistic approach.
Organizations are working with cloud vendors to create solutions that address multiple pain points in the drug discovery process, rather than a solution with a singular function. This holistic approach adds value as the speed of software deployment in the cloud provides organizations with a strategic advantage, increases efficiency, improves an organization’s overall offering and time to market.
Public vs. private cloud
Bigger organizations have an interest in the cloud but they are trying to internalize solutions too much, and in doing so they are not trusting the solutions available or the software providers that are increasing their due diligence. Organizations that create solutions for their own private cloud pigeon-hole themselves into creating snowflake solutions, that will inevitably need upgrading in the future. By carefully selecting the right cloud solutions provider the burden and cost of upgrading is removed and organizations can focus their efforts on conducting research, rather than keeping their software solutions up to date. According to The Cloud Calculator, the total cost of ownership over three years for a private cloud with one server consuming, one terabyte of storage space is a staggering $750,648. Considering the amount of data pharmaceutical organizations produce during the drug delivery process, which on average can take up to 12 years, the total cost of a private cloud can easily reach over $10 million.
Switching from on-premise to cloud software also raises geography questions amongst some organizations such as – where does the IP and data reside and who has jurisdiction of the data? Whilst several of the large-scale enterprise hosting providers are American, some countries with strict data sovereignty laws like France, Germany and Russia, require physical servers within the country’s physical borders, meaning data stored in the cloud in those countries is actually stored in those countries.
Data residency is still a delicate subject for a few organizations but by using a public cloud provider, the responsibility and burden of cost to provide servers in countries that legally require them sits with the cloud provider not the pharma organization. This saves money and frees-up time for organizations to focus on research and not on managing IT services.
The future of the pharmaceutical industry
Cutting costs, increasing efficiency and speeding up drug discovery are the primary goals of pharmaceutical organizations and, to achieve these objectives, organizations have embraced collaboration with contract research organizations (CROs).
Cloud computing can counter the security and data integrity concerns associated with outsourcing and advanced cloud products are enabling pharma organizations to tap into previously unexplored resources. Adopting cloud-based solutions can also bypass working with obsolete technology and remove the barriers associated with essential and frequent upgrades. Cloud computing grants organizations the ability to quickly adopt the most relevant and efficient technology for their research instead of creating more and more snowflake solutions.
The productivity of the pharmaceutical industry can be drastically changed by implementing cloud-based solutions. If organizations and institutions alter their business models to reflect these technological advances, stagnant productivity can be halted or reversed and innovative drugs delivered faster.
Cloud-based technologies provide organizations with technology enhancements today, to facilitate the discovers of tomorrow.