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Information Management and the Pharma Value Chain

Why effective information management is so critical to the value chain in the pharmaceutical industry – and to any organization engaged in research as part of the product development lifecycle.

Information management is certainly a strategic core competency every organization should develop. Information assets, like financial, physical, and human ones, are central to “what organizations do”: Managing them properly leads not only to increased revenue, decreased costs, and increased margins, but also reduces legal and operational risk – while managing them poorly leads to the reverse of all these.

Given the strategic importance of information management, why do so few organizations do it well (and so many organizations do it poorly)? Part of the problem is that, unlike financial, physical, and human assets, information assets are far less tangible. We all know we can’t leave bags of money or computer monitors lying around unmanaged without significant consequences; but when thinking about the consequences of unmanaged information, we’re often hard pressed to articulate them.

One of the best ways I’ve found to help articulate the consequences of managing information poorly is to highlight the link between information management and the value chain activities of an organization. Most leaders understand their value chain; that’s how they make money, after all. So if you can show how information management practices impact their value chain, you’ve got a good shot at getting them to understand its importance to the organization.

For the sake of illustration here, let’s use the value chain activities we’d expect to find at a full-service pharma firm, and explore how information management impacts it.

Pharma Value Chain

There are lots of ways to express the pharma value chain, but I typically do so with the activities in Figure 1, which are an adaptation from John Campbell’s Understanding Pharma.

Pharma Value Chain

Figure 1 – Full-service Pharma Value Chain Activities

One of the most important things to keep in mind about value chains in general is that they essentially describe the steps in the product development lifecycle, because in one way or another, organizations make money by selling products. And to some extent, all product development efforts involve research and development (R&D) on products that will never see the light of day—trial and error is part and parcel of innovation, and many more ideas are generated and tested than ever make it to become products in the marketplace. But for pharmas, this product ideation funnel is very steep. The ratio of ideas to final products can be, depending on the size of the organization, from hundreds, to hundreds of thousands, to one.

The Importance of Information Management

The enormity of the idea to product ratio (as well as the extreme cost in time and dollars to move ideas through the product development lifecycle) changes the way that information management adds value to pharmas; i.e. information has its highest value to a pharma when it’s associated with a product that can be brought to market, rather than with an untested idea that may or may not be saleable.

Because so few ideas actually make it to the end of the product development funnel, pharmas need to make the most of the ones that do—from getting primary regulatory approval as quickly as possible, to finding viable isomers for existing products to extend their patent protection.

Here’s a closer look at some activities in the pharma value chain where I’ve seen information management deliver significant results:

  • “Primary” regulatory approval: A pharma’s ability to compile and submit a new drug application to the FDA efficiently and effectively is of mission-critical importance to the company’s bottom line. The shorter the time between successful conclusion of Phase III trials and FDA approval, the longer the time under patent protection (and ultimately more revenue potential for the product). To do this, you need to understand what information is required by the FDA, of course, but, more important, you need to be able to deliver that information accurately. It can be done despite poor information management practices, but it’s far less expensive, risky, and time-consuming with good information management practices.
  • “Secondary” regulatory approval: Global pharmas capitalize on drugs that have been approved for sale in the U.S. and European Union by getting approved in markets in the rest of the world (ROW). As with primary approval, managing information well is critical, but regulatory groups in a pharma’s affiliates face additional challenges because of how documents are typically managed. For example, a U.S. regulatory team emails a scan of its 3,000-page submission to Brazil, but because the scan is a single PDF, the Brazil team must manually slice and dice the document to cull the parts they need for submission and then stitch them together into a cleaned-up document—all of which adds weeks to the process (and subtracts weeks from the time they could be selling the product)—weeks that could be eliminated almost entirely with some basic document management in place.
  • Mergers and acquisitions: Other than the revenue generated by another firm’s existing products, pharmas buy other firms to gain access to their pipeline—i.e. the products that are currently in various stages of development. But without the ability to manage the huge volumes of product information that come with an acquisition, time to value is extended significantly. And beyond realizing value from the acquisition, the acquiring firm will be unable to effectively manage the acquired firm’s business records in accordance with recordkeeping policies without strong information management in place.
  • Product extension: Finding viable isomers for existing products allows a pharma to extend patent protection while potentially improving the product, e.g. by reducing side effects. Doing so effectively relies in part on the firm’s ability to make R&D documents findable: If researchers can’t easily find key information about the development of the original product, they’ll waste time searching for documents and recreating work that already exists, but is orphaned on shared drives, hard drives, and other legacy information silos.

The Final Word

Although we’ve just scratched the surface of information management for pharma, hopefully I’ve given you a feel for how a value chain perspective helps articulate the importance of information management better than generic statements about improved findability or more effective collaboration would. Feel free to jump in and share your own perspective on how information management impacts the pharma value chain—or in other industries, for that matter. Let’s get the conversation started!

Joe Shepley
Joe Shepley
I’m VP and Practice Lead, focusing on developing Doculabs’ InfoSec practice and its applications in a wide range of industries.