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Regulation-Related IT Spending and Services Coupled with Products Increase Demand for IT in the Life Sciences Industry

    Online News published in DMReview.com
December 15, 2005

Big Pharma Companies' Covigilance Due to Drug Withdrawals Heightens Focus on Regulatory Compliance

With data growth rates fast outpacing the growth in the infrastructure capabilities of life science companies, it has become a necessity to outsource key activities related to storing, accessing, securing, and managing of data. This, coupled with the regulatory compliance, are driving the IT spends amongst the life science companies.

Surging volumes of data in the life sciences industry (comprising segments such as servers and desktops, storage, application software and services), touching petabytes (quadrillion bytes), has created a challenge for scientists to collect and analyze this data.

Also, life science companies still have large repositories of paper-based data and paper process. With regulatory authorities pushing towards electronic data formats, there is high market potential for IT vendors in digitizing, storing and managing this data throughout its lifecycle. Companies have realized the importance of combining data from various locations and storing it in a central warehouse, which would enable easier access to their globally dispersed R&D capabilities.

Combining and consolidating data will serve many purposes for the life sciences companies. For example, comparison of genomes in the same conceptual space can greatly magnify the value of a particular sequenced genome. Enterprise-wide IT systems aid in generating value by gaining knowledge from the various subsidiaries of life science companies. They also keep track of the various research projects and resource allocations and allow easier knowledge management.

"The life sciences industry is now in a period of transition, as it seeks to use IT in resolving the process inefficiencies that cause a lot of dollars to be wasted across the spectrum — from R&D to post-marketing," notes Frost & Sullivan Industry Analyst Raghavendra Chitta. "These companies are now witnessing a sharp uptake of IT tools, which is not limited to the drug discovery process in the life sciences industry."

For instance, IT is one of the key tools that helps organizations communicate regulatory requirements across business areas and helps companies achieve them.

Regulatory requirements are now one of the main drivers of IT spending in the life sciences industry. Companies, which had to deal with regulatory requirements during the last phase of drug discovery, are now facing strict regulatory norms across all business areas. The recent drug withdrawals have also brought about an increased focus on pharmacovigilance and related regulatory compliance. There have also been huge investments to achieve 21 CFR Part 11 and other related compliance.

"There is a tremendous rush towards compliance-related IT spending, something similar to what was witnessed during the Y2K days which has been garnering greater proportions of IT budgets," notes Mr. Chitta.

Buoyed by these trends, IT spending in the life sciences industry, which totaled $17.10 billion in 2004, is likely to reach $49.30 billion in 2011, registering a compound annual growth rate (CAGR) of 16.3 per cent.

While big pharma companies hold potential for IT vendors owing to their more mature, predictable and large IT budgets, they are also more complex customers. The recent drug recalls and pricing pressures have triggered rationalization of operational costs. The larger pharmaceutical companies have already replaced legacy systems or are replacing them, thus leaving little chance for increased IT spending.

As a result, the entire selling structure in life sciences is moving towards value-based selling and how tools in this particular industry generate value. IT companies, therefore, have to develop these return on investment (ROI) models and provide proof for these values.
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For more information on related topics visit the following related portals...
Compliance, Data Management and Outsourcing.

This piece has been brought to you by the DM Review Editorial staff.



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