HEALTHCARE AND LIFE SCIENCES From supporting an aging population in developed markets to serving a growing middle class in emerging markets to harnessing scientific and technology advances, the life sciences industry is undergoing a significant transformation. Life sciences companies have many reasons to be optimistic about their future. But this confidence is tempered by pressures to deliver shareholder returns in the short term. Life sciences companies operate in an environment characterized by shrinking pipelines, heightened regulatory risk aversion, loss of product exclusivity, and other market issues. While difficult to contend with, these challenges also present new opportunities, as companies need to balance the enabling of better health outcomes with reducing costs. Innovation is the lifeblood of the industry. To stay competitive, life sciences companies must innovate in a more capitalefficient way across the enterprise, including research and development (R&D), regulatory compliance, supply chain and commercial — which we call “capital-efficient innovation.” Companies must develop innovation strategies that address key areas such as optimizing R&D for greater productivity and better leveraging regulatory information across the organization, to bring therapies to patients across the globe faster. And it is imperative that these innovation strategies be complemented with cost-transformation strategies. Innovating supply chain One area of particular interest to CSC is what we call the “next-generation supply chain.” The life sciences supply chain will transition to an order-based model, from a stock-based model, in response to personalized medicine paradigms made possible by scientific breakthroughs. The next-generation supply chain will be more flexible, more reliable, more responsive, more transparent and more secure. Capital-Efficient Innovation: A TRANSFORMATIVE Path Forward in Life Sciences by Steve Andrade 4 CSC WORLD | APRIL 2015 The next-generation supply chain will go a long way toward adapting to shifts in provision of care models and protecting brands. CSC views the following areas — driven by regulatory, legislative and business needs — as near-term opportunities for implementing the initial building blocks of a nextgeneration supply chain: Track and Trace/Serialization: For life sciences companies, delivering products to customers in a timely and accurate manner is imperative. Yet product coding and serialization laws for pharmaceutical products across different countries are notoriously disparate and incongruous. Companies can use advanced technology not only to achieve regulatory compliance, but also to create value beyond compliance. We believe that traceability has to be part of a broader and more strategic supply chain perspective. This means taking into consideration customers, orders, inventory, systems and partners. Most of the traceability data a company needs resides on partner systems, so efficient data orchestration is also critical to success. Traceability and serialization compliance requires an orchestrated program approach that involves pertinent stakeholders such as partners in manufacturing, packaging, transportation and logistics. Companies must also partner with firms that can provide resources and capabilities on a global scale. Real-Time Supply Chain Transparency and Visibility: The good news is that effective serialization gives you better logistics transparency across the supply chain. And transparency is more important than ever, especially in life sciences, as consumers increasingly want to be assured of the origin of products and services. A good example of an advanced real-time supply chain visibility solution is CSC’s OmniLocation® suite of safety location systems for tracking people, vehicles, materials and assets. OmniLocation can be used by pharmaceutical companies, for example, as part of their serialization strategy, to monitor stock, as well for risk-management purposes. Embracing emerging technology As life sciences companies strike a balance between innovating to grow and achieving cost efficiencies, their business strategies must incorporate technologies such as cloud, big data and the “Internet of Things.” This means embracing technologies such as social and mobile that help digitize new commercial models and processes, and that engage the changing mix of healthcare stakeholders, including the growing influence of patients. For some, it may involve integrating emerging healthcare innovations such as wearable technology into product life cycles. The transformative challenges and opportunities in the healthcare market are enormous for life sciences companies. Next-generation technologies will play a critical role in the industry’s transformation. Choosing the right ecosystem of business technology partners will be key for life sciences executives to successfully navigate this transformative era in the industry and execute on capital-efficient innovation strategies to achieve their desired business objectives. STEVE ANDRADE is the general manager of CSC’s Global Life Sciences group. CSC IN LIFE SCIENCES With depth of industry knowledge and expertise that few can rival, CSC provides life sciences companies with unique access to best-in-class technology, consulting services and insights from industry insiders. Learn more at csc.com/life_sciences. APRIL 2015 | CSC WORLD 5