Digitalization has already made its mark in some segments of healthcare, notably consumer wearables, medical devices and evidence-based medicine. Over the past couple of years, however, major tech companies have ramped up their investments in healthcare ventures, suggesting that they will broaden their reach.“A year ago, we observed a sharp increase in technology company investments targeting healthcare inefficiencies,” says Katy Huberty, who covers the technology hardware sector. She notes that tech executives now account for around 7% of healthcare company board seats, adding: “The rise in partnerships and board cross-fertilization signals an increased interdependence that can’t be ignored.”Although the biopharma sector hasn’t adopted digitalization in a meaningful way, changes here could have significant implications for society and investors. “Technology can potentially reduce prices for individuals, while improving the efficacy of R&D and enabling more medical breakthroughs,” says Ricky Goldwasser, who covers healthcare services and co-authored the Bluepaper report. “As soaring drug prices stress the healthcare system, political and public pressure may force biopharma to seek efficiencies and lower costs.”

Faster, More, Better

One way that digital can have a clear impact: helping the drug industry develop, test and get approval to market new medicines or devices. Wearable devices or mobile apps that track a range of physical traits to gauge how patients are doing in large clinical trials can bring in real-time data and updates. These are now largely collected via periodic visits to labs or hospitals, which are time-consuming, labor-intensive and costly.

They also depend on human reliability, both in the trial patients and those collecting the data. Simply getting all of the subjects enrolled in trials to show up regularly for their check-ins can be a challenge, Goldwasser notes. Subjects must relate their experience of a drug or treatment from memory, and delayed responses don’t always make for the best data. Equipping patients with connected mobile devices attuned to collecting specific information—for example, pulse rates or blood pressure—can eliminate the guesswork and provide far greater data with more reliability.

Digital could speed analysis and diagnostics. Researchers can apply artificial intelligence to analyze large-scale trial datasets that encompass biological, chemical, behavioral, and other factors, comparing results with broader networks of existing datasets to identify patterns, outliers, or flag results that need immediate attention.

Researchers can also employ digital tools in the front-end development process. For example, large pools of research data are available on various chemical compounds and their toxicological profiles. Employing AI to comb through the records of a certain compound for known laboratory results can eliminate trial and error and reduce the time needed to identify potential leads.

In the promising field of genetic engineering using CRISPR, the breakthrough biotechnology that lets researchers edit genetic sequences with as much precision and ease as text applications allow writers crafting a sentence, digital tools could revolutionize how fast scientists can edit into existence and test cures for any number of gene-based afflictions.

“Across all therapeutic areas, we estimate that IT-driven savings could represent on average 18% of Phase 1 costs, 27% of Phase 2 costs, and 22% of Phase 3 costs,” says Vincent Meunier, who covers the European pharmaceutical sector.

Prognosis for Drug Companies