Top ERP Trends that will Shape the Pharmaceutical Industry in 2023
In the backdrop of the COVID-19 pandemic, the pharmaceutical industry has shifted its focus to new product development. With rising demand for a cheaper & effective vaccine, several companies have increased their research expenditure. Companies are concentrating not just on a COVID-19 vaccine, but on the non-COVID segments, and other mRNA and gene-based vaccines too. While challenges like cost-benefit, supply chain, cybersecurity and counterfeiting remain intact, ERP presents a solution to streamline pharmaceutical operations.
Table of contents:
- Challenges for pharmaceutical manufacturers
- Pharmaceutical ERP trends in 2023
As of January 2022, over 640 treatment therapies and around 380 vaccines are under development for COVID-19. These numbers prove that pharmaceutical manufacturers are viewing this pandemic as an opportunity to establish a global presence.
The pandemic has also fueled the demand for over-the-counter antibiotics and anti-viral medicines. Moreover, consumer behaviour towards pharma products has seen a major overhaul, due to the advent of online pharmacies.
With the pharma production projects going on full throttle mode around the globe, more and more manufacturers are realizing that getting ERP software is no more just an option, but an absolute necessity.
Challenges for pharmaceutical manufacturers
With a revenue of $1.27 billion in 2021, the pharmaceutical industry is expected to grow by 11% in the coming year. During the pandemic, demand wasn’t an issue for pharmaceutical manufacturers but supply was. With strict COVID-19 regulations in place, pharma production took a massive hit.
Companies couldn’t run their manufacturing facilities at full capacity which resulted in a total disruption of the pharmaceutical supply chain. The companies struggled to obtain adequate raw materials and also lost a sizeable chunk of their market share to substitute formulae.
In such a situation, companies with a capable pharmaceutical manufacturing ERP were able to regulate their supply chain and categorize their production to meet the demands of the market. Such companies protected themselves against counterfeit products and increased their presence in markets where they had little or no existence.
Pharma ERP also helped companies cut costs and increase margins on their products. With a tailor-made ERP solution, pharmaceutical companies were able to categorize products to be sold on sales maximization i.e. selling more quantity with a lesser margin, and products to be sold on profit maximization i.e. selling lesser quantity with a higher margin.
Race for the vaccine
In addition to their existing products, pharma companies also rushed to develop a vaccine for COVID-19. Furthermore, manufacturers tried to incorporate their existing drugs into the COVID-19 treatment regimen. This led to the setup of a new research infrastructure or expansion of the already existing research facilities. This new opportunity cost brought a new approach to the pharmaceutical industry’s cost-benefit analysis. They had to include the elevated research costs in their profit and loss statement and this was made easy by customized pharmaceutical ERP software.
With continued emphasis on research, constantly evolving technologies like AI – Artificial intelligence and ML – Machine Learning has changed the pharma landscape forever. More and more companies are moving towards remote research and outcomes are being studied at a centralized location. Such activities and processes are the future of the pharma industry as a whole.
While Pharmaceutical companies are spending heavily on R&D, the return on investment still remains considerably low. Currently, the rate of return with respect to research stands at a meager 1.8%. Therefore, it is imperative that companies cut down on other costs also, while balancing their research spending.
Pharmaceutical ERP trends in 2023
Supply Chain Diversification – Having borne the brunt of raw material shortages in the past two years, pharma companies are now shifting towards a multi-vendor supply chain. This approach will diversify their procurement portfolio and present them with options in case of inventory exigencies. This functionality of pharmaceutical ERP software will come into the spotlight as companies look to change the way they manage their inventories.
R&D Capabilities – Research is and will be the buzzword for the pharmaceutical industry for many years to come. As companies gear up to create new vaccines and drugs, many formulae will be tried before arriving at the magic potion. Cataloging and comparing these formulae with each other is a core functionality in pharmaceutical ERP software. It will not be surprising to see this feature come to the center stage of the ERP landscape in 2022.
Regulatory Framework – During the coming year, governments will have a plethora of drugs to look into. In such situations, the smallest of oversights can prove to be the undoing of months and years of research work. By feeding the data into an ERP for the pharmaceutical industry, the results of the study and the regulatory compliances can be checked to sidestep any loopholes in the final report. This would help companies get their vaccines into the market as early as possible.
Big Data Management – A COVID-19 vaccine has to be global in scope. Therefore, the sample size for testing the vaccine will also be huge. Samples from different locations will be recorded on the cloud and the data will be compiled on a central server. This data should be flexible enough to be interpreted in multiple ways for multi-faceted results. Pharmaceutical ERP software can offer insights into the data and help the organization in the process of Big Data Management.
Cyber Security infrastructure – With humongous chunks of data being uploaded and accessed on the company’s servers, data security can be a real threat. A data leak can render a company’s entire research into disarray. Therefore, an ERP for pharmaceuticals offers a layered authorization model. Usage logs are kept diligently to ascertain which part of the data is being accessed and by whom.
A changing landscape demands a change in mindset. Although a certain part of pharma research still calls for manual processing, companies are keen on adopting an ERP infrastructure. With the urgency with which a miracle drug is being anticipated, companies are looking to cut through redundancies and arrive at a conclusion as early as possible. By streamlining the entire supply chain, pharmaceutical ERP software can help corporations save a lot of human and financial resources.