While companies everywhere adjust to the new normal, in pharma and biotech risk control is business as usual. The fundamental nature of risk in life sciences is governed by the odds. Only one in twenty drugs make it to clinical trial. More than 99% fail to make it through to production and yet despite the low chances of success, expectations of a breakthrough are high. Patients and care providers demand better, cheaper treatments for ever-increasing ailments. Investors expect a low cost of discovery and a high success ratio. An imbalance of risk and expectation can be tough to manage.
When regulators impose new standards it can create havoc for companies who rely on global supply chains to balance the cost of investment with efficiencies in production and distribution, not to mention the extra burden on compliance teams. And when governments, investors and patients ask for faster development the pressure to meet demand can invite litigation or induce errors that harm the drug’s progress. High expectations put risk control in the spotlight.
Like many complex organizations, pharma companies fragment the numerous risk controls into areas of expertise, but because risk is fundamental, operational controls cannot be separated from corporate strategy. That means small events at departmental level are connected to higher level projects further up the chain. Executives need to know, for example, that investment in digital transformation is paying for itself by helping to eliminate targets that are unlikely to make it through trial.
The journey of discovery is long. Some products take 15 years to bring to market, and much can change in that time. That means commercial and scientific experts must answer critical questions many years before market entry. What is the research investment required to provide the right drug, for the right market opportunity, at the time it’s needed? And what is the likely financial return? Risk assessment must be embedded into every decision, posing questions for strategic and operational leaders. In the lab, how much should researchers prioritize riskier breakthrough medicines, knowing the chances of success are low? Do companies with manufacturing capability make ingredients at extra cost or buy them for less, knowing that global supply chains face further disruption? How much control should manufacturing teams have – and where control is handed to partners, how can safety standards be maintained without imposing additional cost? In a period of rapid change, these questions are even harder to answer. But change also creates an opportunity for new risk controls to emerge.
The COVID-19 pandemic will accelerate the digitization of lab research and clinical development as well as automation of the production line, linking insights across the cycle to enhance decision making. As these data flows become the norm, the opportunities for enhanced risk control will increase, enabling life sciences companies to predict problems before they arise, and push harder for breakthroughs that benefit us all.