Pharmaceutical companies are well aware of the revolution being facilitated by digital technology with urgency around the current pandemic only accelerating the need for more digital orientated solutions.
The questions around speed and accelerating digital adoption can be attributed to many reasons, a key one being the regulatory environment and hurdles in which digital transformation operate unique the pharma sector.
In this article we examine three alternative solutions from other regulated industries who have faced seemingly insurmountable challenges towards digitalisations within their own industries:
Open Banking, PSD2 and the UK financial services:
European and UK regulatory initiatives launched Open Banking, aka Payment Services Directive or PSD2, in 2018 requiring the nine major banks in the UK to open their payments infrastructure and customer data assets to third parties that could then develop payments and information services to the customers of these major UK banks.
Once the PSD2 initiative is fully implemented by March 2021, the Open Banking opens up consumers’ banking data to licensed third-party providers to encourage innovative and digital solutions.
The early indicators point to great success in encouraging innovation with a very strong take-up with new startups unleashing a new wave of digital solutions and data innovations.
In the UK, the OBIE, the body which oversees the domestic open banking initiative, reported that there were 80.7 million successful API (application programming interfaces) calls in July 2019; an increase of 21% on the June total, and a significant uplift from the 23.1 million in January.
This new open banking initiative has the potential to unleash a new ecosystem of startups and innovators, as the former chancellor Phillip Hammond stated in June 2019: “Our Open Banking initiative is already dramatically changing the way consumers and small businesses engage with banking”
Learnings for the pharma industry: opening up customer data though assessing APIs can bring huge improvements to existing processes and workflows, and address pain points that could bring material improvement to the customer experience of both HCPs and patients
The Financial Conduct Authority sandbox
The sandbox was an initiative launched by the FCA in 2015 in direct response to unauthorised firms and technology businesses that required authorisation that were seeking to deliver new innovations directly into the UK financial services market which could be tested within a suitable regulatory framework.
In summary it was created as a safe space where financial services firms could test out new products and services. The idea behind this was to reduce the usual regulatory restraints while ensuring customers, critical to success are protected.
In practice this enabled financial services businesses to trial innovative new approaches, solutions and delivery methods without the risk of steep fines.
The FCA sandbox project has been an unrivalled success not just in its originally purpose of testing new innovative technology but also a key contributor to attracted tech talent to London and the enabling London to become the fastest growing Fintech eco system in Europe, arguably the envy of the World.
The evidence of further investment into London Fintech ecosystem further proves the point London fintech companies attracted over £38.4 billion of investments in 2019, an increase of 91% from 2018. Across Europe, the UK accounted for half of the top 10 deals and currently holds pole position as the top destination for European fintech investment.
Learnings for the pharma industry: many observers believe the key pharma regulatory body the Prescription Medicines Code of Practice Authority code (PMCPA), while being well intentioned for pharma, is too stringent to encourage digital solutions and innovation. Creating some kind of Sandbox could encourage alternative solutions.
Start-up accelerators provide an excellent platform for early stage tech start-ups in pharma and healthcare to get up to speed quickly, identifying their best growth strategy and a reasonable plan to achieve it.
This is especially important for a regulated pharma companies in particularly because you need evidence and proof of your business proposition and that the solution you are proposing solves a clear problem.
Using accelerators enables entrepreneurs and start-up owners to finesse the proposition in front of real customers so that innovation can be properly moulded into a viable and potential attractive business. This pressure is arguably much more critical where the stakes, peoples lives are higher.
One of the most visible and successful start up accelerators for Insurance has been the Startupbootcamp, the first truly global insurance accelerator working alongside a large portfolio of leading insurance players to foster disruptive and collaborative insurance innovation from early stage small companies.
This particular accelerator enables start-ups to not only to validate their business propositions but make the right connections in front of the right people.
In summary, accelerators bring many benefits for pharma start-ups in particular expert advice, evidence and qualified validity around the digital solution and access to investors
Learnings for the pharma industry: encouraging more collaboration with third party accelerators to harness and develop their proposition and capture the evidence needed to validate their solutions
The pandemic has showcased how fragile our incumbent health infrastructure is and the need for more viable remote digital solutions to solve the current urgent challenges unleashed through the pandemic. The above three strategies demonstrate how other regulated industries have addressed the challenges of digital transformation.
David Reilly is the chief executive of Let’s learn Digital, specialists in designing quality training solutions in digital and emerging technologies for the UK Pharma Industry