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Technology at the service of management can help the pharmaceutical industry overcome crisis

Discover how the pharmaceutical industry can become more productive by combining technology and management practices

Following record global sales in 2015, the pharmaceutical industry has been going through a period of slow growth. Recent studies indicate that the cost for research and development of new drugs continues to increase. The rate is growing at more than 8% per year. In parallel, the industry is also facing increasing pressure for improved productivity.

For a long time, the pharmaceutical industry enjoyed great profit margins, generated by the enormous success of some patent-protected drugs. These drugs accounted for a significant percentage of manufacturers’ revenue. A study by Healthcare Global provided some interesting revelations. When the patents expire, large manufacturers lose up to 90% of their revenues from these drugs to generic drugs.

The expiration of patents on a large scale opened up a great opportunity. Generics have taken over pharmacy shelves, increasing competition for pharmaceutical giants. This has led to a reduction in the market share of products that were “the hen that lays golden eggs” in the 1990s.

The large profits of the 1990s left many manufacturers complacent, investing little in research and development (R&D.) It is common in the process of developing a new drug, from the time the research begins until it reaches the market, that it takes more than 10 years. This means that, today, the pharmaceutical industry has a small pipeline. The number of drug development programs, in light of the current market demand, is insufficient. This has created a crisis among many pharmaceutical companies, resulting in mergers and acquisitions, as well as layoffs.

Aiming to make up for lost time, the industry currently seeks to reduce the time spent in the research and development cycle. They also seek to reduce operating costs. To gain efficiency and streamline R&D processes, pharmaceutical companies can make use of initiatives such as:

Optimize R&D processes

Business Process Management (BPM) can help. Pharmaceutical companies can gain efficiency through a combination of process improvement, standardization and automation. Optimizing and automating business processes eliminates redundancies. Many manual tasks can also be eliminated, greatly reducing the risk of errors and rework in the process.

This practice also helps shorten the time to launch new products. It also ensures regulatory compliance in the research and development phase, including: automating and simplifying clinical trial processes, minimizing errors and risks, improving communication and promoting a collaborative research environment.

Eliminate waste and activities that do not add value

The Lean methodology aims to eliminate waste or non-value-added activities, by optimizing end-to-end processes. Its application is very common as a complement to BPM. The method has proven to be effective, increasing the efficiency of operations and helping to reduce costs. For this reason, it has attracted more and more users. Some Lean techniques, such as 5S and the 5 Whys, can help improve the efficiency of laboratory work environments. In parallel, focusing on eliminating unnecessary steps can help speed up certain processes and reduce the time spent on each cycle.

Promote content availability

The pharmaceutical industry is highly regulated and R&D operations that depend on reliable documents and data are intense. Thus, the availability, security and traceability of information are critical factors in this segment.

Enterprise Content Management (ECM) ensures the availability of the correct version of policies, procedures and other technical information. ECMs monitor all changes and approvals, in addition to notifying interested parties when any information is updated. The tools also generate automated alerts. Thus, it is possible to avoid overshooting deadlines and, consequently, the levying of fines by regulatory agencies. Audit trails allow for the mapping of any weaknesses, showing where the document management process needs to be improved.

An example of this is the case of União Química, one of the largest pharmaceutical companies in Brazil with 100% national capital. The company implemented SoftExpert Excellence Suite (SE Suite) to increase the efficiency of its operations. According to the coordinator of quality systems, Roberta Rodrigues, today all electronic approvals, indexing and traceability of the documents are carried out with the tool. The head of the Technological Governance division of União Química, Leonardo Pereira Pedrozo, says that the platform has optimized resources and improved process management. “One of the biggest advantages is document control and security, traceability and the incredible ease in searching for records and documents, which was a requirement in all areas of the company,” says Pedrozo.

Thus, it is possible to guarantee compliance with the standards, regulations and legislation widely applied in the sector, such as ISO 9001 or FDA, making processes faster and more transparent.

Improve asset availability and reliability

When people use a drug, they expect the results to be positive and improve their health. There is no tolerance for errors or fraud in this process. Even so, a study by PricewaterhouseCoopers revealed that, in 2011, the pharmaceutical industry paid out more than US$ 7 billion in damages.

Poorly calibrated and maintained equipment can often extend the timeframe and, consequently, the costs of drug research steps, laboratory experiments and clinical trials, among others.

Enterprise Asset Management (EAM) solutions, which address maintenance and calibration, increase reliability and optimize equipment performance.

Ophthalmos is another case of a company that has invested in asset management and has garnered good results. The company, a pioneer in the manufacturing of intra-ocular viscoelastic in Brazil, also implemented SE Suite. As a result, it was able to eliminate delays in calibrations, optimize preventive maintenance and improve the control of assets and inputs. “We have less expensive and more robust maintenance. We are able to meet all quality standards while generating economic indicators,” concludes Roberto da Silva Gusmão, Supervisor of Pharmaceutical Engineering.

This impacts directly on reducing unnecessary costs for pharmaceutical companies and ensures that they can continue to promote well-being and launch new drugs for the benefit of those who need them most.

Risk management

The slump in growth results in a decrease in the cash flow of companies. Scarcity of resources limits investment capacity for innovation and the development of new products.

Given this situation, pharmaceutical companies have adopted several strategies to optimize the available budget. One of the most common is the outsourcing of research and development processes, whether for reducing costs, making processes more agile or increasing productivity. In this way, the industry can take on a larger number of projects. This also improves the chances of launching new and lucrative drugs.

With Enterprise Risk Management (ERM), it is possible to manage all the risks inherent in R&D processes. The tools help identify, analyze, evaluate, monitor and manage risks, using an integrated approach.

These are just a few examples of how technology in the practices of BPM, ECM, ERM, and EAM can help raise productivity in R&D processes and accelerate the delivery of new drugs. R&D processes are the foundation of a pharmaceutical company, so eliminating inefficiencies that generate unnecessary costs are crucial initiatives in this segment. Thus, it is possible to benefit thousands of patients who seek to improve their health and their quality of life.