Role of Digital Transformation in Pharmaceutical Industry: Overview

Published By: IndustryARC Published On : 29-Nov-2022

The pharmaceutical business has experienced tremendous growth in recent years and it is evident that this expansion would continue. Technological developments undoubtedly contribute to this enormous shift in the industry. Digital Transformation can aid in streamlining and integrating operations, ensuring the most effective/efficient route to market and addressing the shifting needs of a broadening customer/stakeholder base, whether in research and development, manufacturing, commercialization, market access, tendering or launch management. There is a significant gap in treating people with a variety of conditions that are often degenerative, debilitating and life-threatening in Oncology and Biopharmaceuticals, which includes Cardiovascular, Renal & Metabolism and Respiratory & Immunology. The key benefit of digital transformation in the healthcare market is to develop new business models by implementing new digital strategies. There is a significant difference between automation and digitalization. While automation uses technology to make tasks more efficient, digitalization goes a step further by collecting data and using it for advanced insight, thereby unlocking the benefits of true transformation and triggering a digital transformation in the healthcare market. 

For instance, mental health and wellness, medical imaging, AI-based diagnostic software and clinical trials technology were the most appealing to investors in 2021, raising a total of $57.2 billion in funding, a 79% increase from 2020. Europe has become a hotspot for investment, with funding significantly exceeding the global average, with a 131% increase in total investment to $6.7 billion in 2021. European digital health funding now accounts for approximately 12% of global investment, up from 9% in 2020.

Adoption of Digital Technologies in Clinical Trials

As per a global survey by Deloitte, it is estimated that more than 35% of the pharmaceutical industry has adopted digital technology. Most pharmaceutical companies have been using advanced machine learning algorithms and AI-powered technologies to accelerate the drug discovery process, enhancing digital transformation in the healthcare market. According to recent reports by Deloitte, 75% of organizations with an annual turnover of $10 billion have reported an investment of $50 million in AI technologies and on average, 95% of mid-sized organizations also invested around $50 million in 2020.
Trends of Digital Transformation in Pharma Industry

Artificial Intelligence (AI) in Pharma Industry

Application of Artificial Intelligence (AI) to Big Data in life sciences can help companies in transforming their business models, streamlining the production of biopharmaceuticals and improving everything from clinical trial data flow and cognitive molecule research to self-healing supply chain applications and product intelligence. Additionally, it can help life sciences organizations interact with patients, healthcare providers and other stakeholders in a more personalized and positive way. Deep learning using artificial intelligence in pharma is becoming increasingly important in areas ranging from drug development to cybersecurity and pharmacovigilance (PV). AI in pharma makes it easier and more cost-effective to bring new products to market. The current cost of sequencing a human genome has dropped dramatically. The cost dropped from $4000 in 2015 to less than $300 today.

According to TechTarget, 62% of healthcare organizations are considering investing in AI in the near future and 72% believe AI would be critical to how they do business in the future. For instance, biotech industries are using AI and machine learning to generate new drugs, with the potential to produce dozens of new pharmaceuticals and a $50 billion market over the following ten years.

Robotics & Automation

Automation can now be found throughout the pharmaceutical industry. In the lab, robots are used to replace repetitive, manual tasks such as pipetting and mixing. Pharmacy automation can do everything a human pharmacist does, from reading prescriptions to dispensing the correct medication with far fewer errors. The applications of robotics in pharmaceutical manufacturing are expected to rise in the coming 3-5 years. According to a report by Robotics Industries Association in 2020, compared to 2019, orders for robots from North American life sciences companies surged by 69% and the applications of robots are anticipated to increase in the areas of personalized medicines. Robotic automation is the technique of carrying out repetitive operations through an intelligent routine to maximize effectiveness, boost productivity and eradicate human error. Research and development in these related sectors were based on testing and discovery procedures like high-throughput screening, drug manufacturing and life science blood sampling. With global spending on robotic process automation (RPA) software, more than tripling from $520 million in 2017 to $1.89 billion in 2021, it is clear that the future of the pharmaceutical industry would be based on the benefits of robotic process automation.

Digital Transformation in Precision Medicine

The COVID-19 pandemic continues to increase the potential of digital services and products, which is affecting every aspect of science and society. However, the need for digital transformation in the diagnostics and personalized medicine fields is more pressing. Digital transformation is poised to accelerate personalized/precision medicine and systems science on multiple fronts, including deep real-time phenotyping with patient-reported outcomes, high-throughput association studies between omics and highly granular phenotypic variation and digital clinical trials, among others. Oncology, cardiovascular diseases, neurodegenerative diseases, diabetes, pain and Alzheimer's disease - all have great potential for personalized medicine.

Cloud Technology

The cloud is at the forefront of the technology driving the pharmaceutical segment of digital transformation in the healthcare market. Along with efficiency, cost savings and security, cloud infrastructure is inaugurating a new era of creativity and automation of corporate transformation. Over the next year or two, almost 65% of healthcare firms would boost their spending on public cloud infrastructure services, with 20% of pharma organizations investing in hybrid cloud management software. Cloud computing technology has accelerated and simplified the biotech FDA approval process by standardizing and integrating information flow to create an efficient and streamlined collaboration platform. According to a report by McKinsey on cloud migrations in Fortune 500 pharma and MedTech companies, companies stood to gain about $10 billion to $15 billion in improved 2030 EBITDA run rates from IT rejuvenation, but roughly twice as much about $25 billion to $30 billion from business innovation. The estimated potential value for the pharma companies ranged from $20 billion to $40 billion, representing a 9 to 19 percent increase. Cloud computing technology in the pharma industry has addressed significant data storage solutions and has created new market opportunities in the low-cost development of drugs and their approval process.

Big Data Analytics

The rise of wearable medical technology, telemedicine, automated medication dispensers that work like ATMs and mobile health apps promise a smart, digitally-driven future. Additionally, there is an industry-wide focus on healthcare compliance owing to stringent regulatory requirements. With the sudden impact of COVID-19, big data analytics played a major role in vaccine and drug development. In recent years, pharma companies invested around $5 billion in big data. For example, pharmaceutical industries have already begun to share data to speed up big data and analytics. Project Data Sphere, for example, is a data-sharing scheme developed by AstraZeneca, Bayer, Celgene, Janssen Research and Development, Memorial Sloan Kettering Cancer Center and Sanofi. These companies are sharing their previous cancer research data to assist researchers in discovering better medicines

Digital Therapeutics

The term "digital therapeutics (DTx)” refers to digital health interventions that have been created with a focus on clinical results. Clinical trials are used to validate DTx solutions, which provide results in the real world. With evidence-based innovations that focus on tolerant outcomes, digital therapeutics are transforming the medical services and medication system framework. Digital therapeutics aids in the direct delivery of clinical treatments or therapies to patients through the use of logical reports, clinically tested programming used to treat patients, their administration and for the prevention of chronic illnesses or problems. Investments in digital therapeutics have doubled during the past 3 years. According to Rock Health, more funding has been raised in the first three quarters of 2021 than in the entire year of 2020. This equated to $21.3 billion in venture funding provided to companies working on digital therapeutics, up from $14.7 billion in all of 2020. As the digital therapeutics industry expands, traditional life science players seek partnerships with DTx startups. Companies like AstraZeneca, Otsuka Pharmaceuticals, Eli Lilly, Biogene, Roche Diagnostics and Kaiku health have entered into a partnership with digital therapeutic companies. 

Augmented and Virtual Reality

Augmented Reality (AR) and Virtual Reality (VR) have a wide range of applications in the pharmaceutical industry, including HCP education, drug design and discovery, patient counseling and behavior modification. These technologies have the potential to bring complex pharmaceutical materials to life. They have also transformed pharmaceutical manufacturing by assisting in a variety of ways, such as visualizing production and remotely monitoring the process. There is growing interest in the potential for VR and AR to increase productivity and lower production costs as a result of the pharmaceutical sector's general push toward industry 4.0 for manufacturing, which aims to streamline and enable increased automation through the adoption of digital technologies. Total spending on AR and VR was around US$12 billion in 2020, with a projected increase to US$72.8 billion by 2024. As global spending on medicine was expected to reach $1.5 trillion by 2021, the industry would turn to technology-enabled processes to meet the growing demand. Moreover, the consumption of AR-related investments in business is expected to increase to 80% in the next few years, up from around 60% currently. In the Asia Pacific region, India is expected to dominate AR & VR in healthcare at a CAGR of 26.1% by 2027.

Wearable Technology

The incorporation of wearable technology allows pharmaceutical companies to do more than just manufacture, market and sell drugs. The technology empowers patients to manage their conditions and make critical decisions. Wearables are already common in the sports and fitness industries, where they are used to track a variety of physiological indicators. Wearable technology utilization in healthcare and clinical trial settings has increased recently as a result of wearable technology innovation and growth. Additionally, the use of health monitoring tools in clinical research is proving to be a crucial component in enabling some trials to proceed in the middle of the current global epidemic. As of 2019, over 1,400 clinical trials had been carried out utilizing wearable technology. As the healthcare sector increasingly conducts studies online and collects data remotely in response to COVID-19, that number is projected to rise.

Digital technology and diagnostics devices could help cancer patients manage their disease and allow for earlier diagnosis using a simple blood test.
Early findings from a snapshot of 1,627 patients from a much larger 15,000-patient trial suggest that the approach could lead to a screening system based on a blood test.

Wearable Device Technology

Internet of Things (IoT)

The Internet of Things (IoT) has exceptional potential in transforming pharma companies, as it can lower costs, increase output quality and even change how prescribers obtain medications. IoT significantly affects the administration and production of drugs in the pharma industry. It efficiently connects networks, systems and equipment throughout the whole manufacturing facility, enabling standardization. The incorporation of IoT into existing processes can significantly increase the agility, quality, patient and worker safety and cost-efficiency of any pharmaceutical company. This can be accomplished in a structured, effective and efficient manner by employing the Digital Transformation methodology.  According to Mckinsey’s recent studies, IoT would have an $11.1 trillion cross-industry impact by 2025.


Since the pharmaceutical industry is based on innovation and involves major investments in R&D, intellectual property (IP) on drugs and novel substances, clinical patient data and trade secrets, it is a prominent target for cyberattacks. If this data is taken, it could have a devastating effect on the business. Even before COVID-19, the pharmaceutical industry was a profitable target for criminals. Cyberattacks against the biotech and pharmaceutical industries rose by an astounding 50% between 2019 and 2020. The average cost of a pharma breach in 2021 is $5.04 million, according to Ponemon Institute’s Cost of a Data Breach Report. In 2020, ransomware attacks cost the American pharmaceutical and healthcare sectors $20.8 billion. The pharmaceutical industry in particular and process manufacturing in general, are both experiencing an increase in cybersecurity threats. Companies must adapt their business practices to protect themselves by addressing cybersecurity threats and developing effective solutions. The average cost for a pharma breach in the pharmaceutical industry is reported to be around US$5 million.

Pharma Sector Exposures: Fortune Global 500 Companies


The impact of blockchain can be evaluated by the fact that it would save the healthcare industry $100-$150 billion per year. These estimates are anticipated to be implemented by 2025. Counterfeit medications are not only dangerous, but they are also an expensive problem for the pharmaceutical industry. Every year, approximately $200 billion in counterfeit drugs are sold. Pharmaceutical companies, on the other hand, can prevent counterfeiting by recording product histories and changes on a blockchain. Savings can be seen in operational costs, personnel costs, support function costs, counterfeit and other areas. Blockchain has the potential to break down barriers between stakeholders by providing all parties with the same, real-time, accurate view of the supply chain. This is an important factor in ensuring the robustness of the manufacturing and supply chain. Clinical trials, for example, would benefit greatly from increased transparency and accurate information. According to industry estimates, blockchain technology could provide a $3 billion opportunity in the life sciences by 2025.

Research on blockchain in the healthcare sector

Decoding The Digital Impact on the Pharma Space:

Digital technologies are altering how patients interact with pharma and purchase therapeutics at an accelerated pace. As per statistics on, since the beginning of the pandemic, online traffic to pharmaceutical websites has observed a 35% addition. In France, online pharmaceutical sales have expanded by almost 60% with traffic to pharmaceutical websites increasing by 85% since the beginning of the pandemic. Digital transformation is vital to act in response to the expedition of consumer trends and future-proof organizations from interruption. By redetecting the consumers and their pain points, pharma firms can get nearer to their customers and open up novel Direct-to-consumer (D2C) communication and sales channels. A progression to a B2B2C authorizes sales and marketing to build flawless purchasing campaigns for both businesses and consumers.

Digital Engagement with Pharmaceutical Firms:

Emails could be the most typical point of communication with a pharma firm. However, the website of the firm is favored. Mobile apps, social media and online forums are also preferred due to the effortless accessibility to information and the closure of the gap in digital experience.

Source – Carenity CXQ Survey

Financing Technology and Digitalization

The pharma space would witness the biggest alteration from digital transformation in the coming years. Technologies like artificial intelligence (AI), big data analytics and machine learning are at present assisting pharma firms to enhance effectiveness, speed up processors and make data-driven decisions. The capability to process a massive amount of data and extract actionable insights can profit areas from R&D to marketing and sales.  Automated workflows authorize pharma firms with greater control and decreased risk. In an industry as closely-regulated as pharma, being able to envision data processes can considerably boost regulatory compliance effectiveness.  Considering marketing, AI and automation can be utilized to build and scale personalized messaging and interactions that are greatly appropriate for the patient. Marketing teams may automate repeated tasks, accurately target customers and scale-up operations across diversified channels. The pharmaceutical industry is influenced by the identical digital and retail trends as other industries. Therefore, pharma firms are presently required to study how to not only introduce and advance their products but also build and handle digital and hybrid experiences. 

Shifting from a Product Focus to a Focus on Customer Experience

The forward-thinking pharma firms are starting to realize that it is not just about the product. Directing attention to the customer journey is progressively critical to creating a “loyal base of recurring customers”. Focusing on the clinical value can result in pharmaceutical firms disregarding the all-powerful driver of business success: the customer experience. One example, quoted by McKinsey, is a pharma firm that introduced an app to supplement their medical product. The app performs as a digital companion for patients, backing medicine and a healthy lifestyle. This app assisted in boosting revenue for the same medication by 8%. Pharma firms that accomplish the goal of personalizing the customer experience would acquire the market share fast.

Establishing Data Infrastructure for Process Enhancement

Instituting a dynamic data infrastructure is an important segment of digital transformation in the pharmaceutical industry. It is necessary to bridge the digital gap, fit consumer requirements and set up a powerful digital presence. 

Industry 4.0 and the Future of the Pharmaceutical Industry

The present trend toward intelligent automation technologies is known as industry 4.0. The combination of cutting-edge information technologies and modern production techniques is crucial for maintaining economic competitiveness in this new era. With the introduction of the new cyber-physical system design paradigm, the number of systems that must collaborate in future enterprises has increased significantly. Industry 4.0 is a business strategy that addresses all aspects of an industrial operational model, such as culture, management accountability and interactions with regulators. Industry 4.0 and digital transformation have the potential to improve pharmaceutical manufacturing processes and increase efficiency. The Pharma Industry is anticipated to spend around $4.5 billion on digital transformation by 2030. This is the primary driver for digital transformation in the healthcare market. 


The pharmaceutical industry provides numerous opportunities for utilizing IT solutions. The collaboration of IT companies and pharmaceutical companies helps to organize processes at all stages of drug discovery, from identifying drug candidates to managing production and supply chains. With the adoption of digital transformation in the pharmaceutical industry, there has been a huge transformation in research and development. The industry is utilizing advanced technologies to develop promising treatments for life-threatening diseases like cancer, AIDS, rare diseases and other rare diseases and conditions.

The healthcare and pharmaceutical industries have altered as a result of the digital revolution. As a result, businesses are now concentrating on improving customer experiences by becoming closer to their clients and patients and therefore providing new avenues to digital transformation in the healthcare market.