Pharmaceutical Industry Why the „Internet Of Things“ Won't Come –At Least, Not Until 2030...
Big Pharma is thinking „beyond the pill“: While product and process innovation are in high demand with pharmaceutical players, one technology seems to be unable to live up to the hype. Although many Life Science companies have implemented or planned „Internet of Things“ (IoT) projects, the real breakthrough of IoT is not expected to happen until 2030.
“Business climate and revenue expectations have even improved: Only seven percent of respondents expect their global sales performance to deteriorate“, explains Dr. Josef Packowski, Managing Partner at Camelot Management Consultants. When it comes to where the pharmaceutical companies expect future growth, China and North America hold the top positions. Russia, on the other hand, shows clear signs of recovery: While the country suffered one of the highest rates of negative demand expectations in the study conducted six months ago, two thirds of respondents are more optimistic now.
Most Important Markets for Investment: North America and China
These expectations are also reflected in many of the Life Sciences industry’s regional investment plans for the next twelve months. North America has caught up with China as the most important market for investments. In contrast to past developments, the will to invest and the general economic optimism are now accompanied by an expected growth in employment figures. More than three in four participants expect to keep their employment figures constant or to even increase staff.
The fear of revenue decrease due to patent expiry remains the major topic (48%) when it comes to the respondents’ risk assessment. Further gaining relevance since the last survey (44%), political risks in growth markets are now sharing the top position with price decrease. Cost reduction is considered the most important industry trend by three quarters of respondents. Product innovation through research collaboration has also gained relevance among the respondents (1/2015: 26% vs. 2/2015: 44%). Another major trend reflected in the survey are offerings beyond the pill including e-connected devices (1/2015: 13% vs. 2/2015: 44%)
“Internet of Things” Gaining Relevance – Slowly but Surely
The „Internet of Things“ (IoT) is gradually gaining relevance in all functional areas in the pharma industry“, summarizes Peter Holland, co-author of the study and Partner at Camelot, the survey finding for the focus topic “Internet of Things”. When asking for the functional area most strongly impacted by IoT within the next five years, most executives (60%) name supply chain & logistics. Sales & marketing comes second (45%), while figures are surprisingly low with regard to research. However, respondents are much more positive about IoT in all areas when extending the timeframe to 15 years.
Despite their rather distinct belief in progress, executives are also aware that an extensive range of hurdles and challenges will have to be overcome before IoT’s complete breakthrough. “Technological maturity and the question of the business case are seen as the major hurdles especially in supply chain management and logistics”, describes Andreas Gmür, co-author of the study and Partner at Camelot, the current mindset of the industry. Other hurdles require a lot of effort from the global Life Sciences industry and legislators: Immaturity of standards and lack of global legislation are considered particularly challenging when it comes to implementing IoT solutions.