Why digitization, automation and networking are slow in the pharmaceutical industry?
There is no lack of forecasts that predict a golden future for the „Industry 4.0“ concept in medicine and the pharmaceutical industry. „In just a few years‘ time, tablets made by 3D printers will be part of everyday life, as well as virtual reality applications in hospitals,“ predicts Bertalan Meskó, a physician and specialist author in Boehringer Ingelheim’s 2016 company reports.
„Learning from science fiction“: under this headline he talks about sensors in the toilet that analyze urine, sees doctors handling data glasses in the operating theatre and expects virtual, i.e. faster test series of new drugs. A text in the magazine „Reinraum online“ about completely monitored digital cleanroom production, on which the Fraunhofer Institute IPA, among others, is working, bears the title: “ A melodious dream of the future „. All of this will soon become reality.
Reality looks different. Apart from the difficulties of introducing only individual digital elements such as an electronic medical record in Germany, digitilization in the healthcare sector is generally making slow progress. The pharmaceutical sector in particular is no exception, but a notorious straggler. An inventory.
Unlimited technological potential
Networking, virtual mapping and analysis of processes: The potential of a fusion of virtual and Real world in pharmaceutical companies results from a multitude of new possibilities along the entire value chain. These opportunities have only recently emerged. Thanks to technological progress, gene sequencing, for example, has never been so easy and inexpensive as it is today. Huge amounts of digital data, such as those collected by genetic tests or fitness tapes, have become commercially viable with cloud-based storage capacity. Companies can rent this storage capacity from the large software groups as required. The link with personal customer data, movement and social media profiles enables forecasts to be made: influenza waves can be predicted regionally by real-time evaluation. The production of vaccines and medicines could be ramped up in good time.
At the same time, 4.0 concepts increase production efficiency. Industrial processes in the pharmaceutical sector can be controlled more precisely than before, from procurement through microbiological testing methods and drug production to logistics – more and more often without human intervention. The quality of the products is ensured by the prior evaluation of the production design and sensor-supported by the mechanical monitoring of the processes up to the dressing prognosis. A key role is played by the self-learning computing power, artificial intelligence (AI). What was a dream of the future until a few years ago can actually be used today: the large cloud service providers attract companies with software that trains itself. After initially capturing the rule system, such as the rules of chess, it rapidly improves its playing style until it becomes unbeatable after a few hours. Of course, this does not only work with chess, but also with many applications and control loops. Since learning AI can accelerate itself, many experts now see mankind on the threshold of exponential growth.
Such opportunities from increased automation, improved data evaluation and digital networking – Industry 4.0 for short – exist in every industry. From a technological point of view, the pharmaceutical industry would therefore be just as suitable as any other manufacturing sector for concepts of industry 4.0.
For pharmaceutical companies, large positive effects could even be expected. Since they already have to strictly monitor and document production quality today in order to produce batches of the same active ingredient and no hazards, they have an incentive to achieve this more cost-effectively with new technologies. In addition, they produce capital-intensive, high-priced products, which makes further investment in progress attractive. Automation would be attractive for them, firstly because it removes the human from the production process, which is costly in cleanroom manufacturing and, unlike machines, prone to errors. On the other hand, new, innovative production designs would be possible, as well as higher production speeds, new blockbuster drugs and more flexible batch sizes, faster approval procedures, more cost-effective research …
Medication 4.0: Where are they?
As fantastic as the 4.0 future of the pharmaceutical industry can be described, the view of the present is sobering. „The companies that need new methods and concepts the most are those that are least concerned with them,“ says Benedikt Fischer, CTO of ITELYA GmbH & Co KG, who accompanies companies on their way into the digital future. Fischer’s customers in industry 4.0 include, for example, hotel booking portals, Fin-Tecs, machine builders with online platforms, document management and a personnel service provider that trains 4.0-capable personnel, „but not a single pharmaceutical company“.
The cleanroom planners at Dittel Engineering also have some customers with 4.0 ambitions in the industrial sector, but not a pharmaceutical company among them. Surveys show that industry 4.0 is not an outstanding topic in the pharmaceutical sector.
At least this was not the case in 2015, when the management consultancy Camelot surveyed 30 managers of pharmaceutical companies from 16 countries. At the time, managers expected that it would take 15 years before the pharmaceutical industry digitalised and networked its value chain.
„Pharma 4.0“ means a major change. This effort affects not only production, but also all areas of the company, from procurement to personnel management and logistics. „A machine with a digital interface is not Industry 4.0,“ says Fischer. „The entire value chain would have to be digitized. Attempts at consistent automation have so far only been made by drug manufacturers in isolated projects and areas, partly because there was a lack of comprehensive software to digitally map and evaluate complex processes. Although the slow DSL connections may stand in the way of corporate digitization in some parts of the country, this does not explain why even companies with sufficient connections continue to hesitate.
This means that other reasons emerge as obstacles in the pharmaceutical industry: market structure, regulatory and ethical.
Market 3.0: The lucrative next step
Firstly, it is still possible to earn good money with existing methods in the pharmaceutical sector. The industry is used to being able to sell its products with high margins. In such a comfortable situation, there is no motivation to throw previous processes overboard and try something new.
This does not mean that digitalisation in the industry is not permanently discussed, considered and evaluated. And, of course, Martin Zentgraf, Chairman of the German Pharmaceutical Industry Association (BPI), has to be agreed with when he calls on the 250 member companies of his association at the Entrepreneurs‘ Day in November 2017 not to wait for others to digitise: „We will have to do it ourselves“. Nevertheless, as a rule, the demands of the associations of the chemical and pharmaceutical industry are first and foremost directed from politicians, for example for faster broadband expansion, adapted data protection and digital training content. Should investments in industry 4.0 have a positive effect on the share price, the industry giants would probably also become more active than before. Some, however, are currently buying back shares with their high profits rather than investing in the networking of the company.
Authorities 1.0: Competition not foreseen
Secondly, in the pharmaceutical market – unlike other markets – small and new start-ups are not to be expected to roll up the industries as a result of digitisation and to teach the established top dogs to fear. This is due to the high level of regulatory standardization. In the pharmaceutical sector, it acts as a barrier to market entry for new, technologically daring competitors. The guarantee of high quality and protection against product counterfeiting are only one side of the strict regulatory level. The downside is that the regulated market protects pharmaceutical companies from competition and guarantees them the maintenance of market power. This can be observed not only in Europe, but also in Japan and the USA: The countries, especially Japan, demand the highest standards that define the market and promote their own production.
The strict regulatory regime in Germany regulates down to the last detail how medicine must be produced. In the meantime, aspirin could be produced by robots in a garage. However, trying to do this does not occur to any start-up company, as the law explicitly prescribes production in a clean room. This distinguishes the pharmaceutical sector from other industries that do not have to comply with such strict production regulations. Industrial products, such as gear shifts for bicycles, are already being manufactured without ever touching a human hand – unthinkable in the pharmaceutical industry. For a long time now, cytostatic drugs for cancer treatment, which were previously mixed by hand, could be produced more efficiently by robots in an enclosed environment. Technologically, this is possible – but not legally. The authorities are sceptical about the delegation of vital decisions – including the compilation of medicines – to machines.
The unresolved question of product liability is also slowing down further automation. This concerns both autonomous production and autonomous driving, except that the latter can be read much more frequently. As with a self-steering car, all the sensor values in the world cannot prevent a crash in the workshop. Product liability law does not yet provide an answer to the question of who is to blame for errors: the manufacturer of the robot? Or its operator? Or the software manufacturer, the certifying authority, or the supervising operating personnel?
The employee: is not 4.0-ready
Thirdly, industry 4.0 represents both a threat and an opportunity for pharmaceutical workers. While it is quite clear that many jobs are done by robots instead of people – this exchange is the goal of the digital factory – new job profiles are emerging on the other hand. These are not industrial skilled jobs or so-called jobs for everyone, but jobs for digital specialists. In times of big data, data scientists are in demand to find the patterns that can be used in the flood of data. Software engineers who can handle AI are also needed in the new world of work. In 2016, more than half of the 77 managers in the pharmaceutical industry surveyed by personnel service provider Hays were planning to hire more employees with a digital affinity.
Those who keep their job in industry 4.0 will have to change. The question is whether the staff is prepared to do so – and from an ethical point of view. This question sounds irrelevant at first, but ethics plays an important role in the world 4.0. People will be expected to subordinate themselves to machines. Employees have neither been trained for this nor are they willing to do it on their own.
An example: The modern factory works with automatic optimizations of processes, such as walkways. Data goggles show the employee how the ideal path is for him. Cleaning staff clean and clean, guided by evaluated camera images, heat maps and particle counters, specifically to places as required. As practical as this may sound, the conditions are just as stark. 4.0 means maximum employee monitoring. The employees have to be prepared for this. They must be accustomed to their environment being monitored, including the toilet. „The fact that a camera is permanently in the room is frightening for many“, says IT expert Fischer. That’s why the implementation of Industry 4.0 also requires the help of psychologists.
Permanent monitoring can also be linked to evaluation procedures such as those tested for social welfare in China. „These methods will not stop at the companies,“ says Fischer. The cloud software, which is fed by camera images, already recognizes with which leg a colleague has stood up when the employee gets out of the car park and approaches the building. Depending on the analysis of gait, facial expressions and temperature, access can be granted or denied. This is all the more true for external users. If their behavior has already been analyzed in advance, the iris scan does not reveal whether they have anything to do on the company premises. Verifying the identity of all those present is particularly important in pharmaceutical companies. If substances fall into the wrong hands there, there are the highest risks. When dangerous goods are handed over, people are increasingly controlled or displaced by machines, as is already the case with nuclear warheads.
The fact that industry 4.0 is ethically problematic is also shown by the setting of priorities in the event of fire, which amounts to a reversal of rank. When a fire breaks out in expensive data centres, people are still asked to leave the building quickly. After a short time, however, nothing can stop the automatic extinguishing system from flooding the hall with nitrogen to save the machinery. Machines first – Men second.
Scenarios for the pharmaceutical industry
Industry 4.0 concepts in the pharmaceutical industry therefore meet with reservations and persistence above all – but not on all continents. The slowing influence of standards and ethics is lacking in some other countries. The discrepancy between what is allowed and what is not is already attracting capable personnel to work far away, for example in the USA. Anyone who wants to test the freedoms of the pharmaceutical industry 4.0 is going abroad. New production processes and forms of work that cannot (yet) be approved by us or are not considered ethically acceptable will be used elsewhere.
This should give cause for rethinking. If this does not happen, domestic research and production will either shift completely to countries like China. Or the vertical range of manufacture of local manufacturers will decrease to a certain extent and will be supplemented by purchased, GMP-compliant components. Our high-quality but low-innovation pharmaceutical manufacturers will then be confronted with innovative companies that are subject to less regulation. Despite all obstacles, industry 4.0 in the medical and pharmaceutical sector will not be able to be stopped in the long term. „IT will try everything it can,“ says Benedikt Fischer.
„Maximum digitisation will come.“ If not here, then elsewhere“.