Pharmaceutical companies are leveraging information technology (IT) to reduce the cost and time to discover, manufacture, and market their products. The industry faces significant pressures to bring low-cost, high-quality products and therapies to market despite rising development costs, including rising costs to comply with complex regulations. Remediation of IT systems as a result of nonconformances to quality and compliance requirements has significantly contributed to this cost escalation.

Outsourcing IT-related work across the value chain is proving to be an effective strategy for reducing costs. Increasing regulatory pressures are driving companies to focus more on quality and compliance, which are becoming the key business drivers for necessary investments in the right technologies. Companies are investing more in IT to improve operational efficiency, enable business innovation and transformation, and at the same time reduce compliance costs and effort. Improving efficiency and productivity thus have become the supreme drivers for outsourcing and offshoring IT work to vendors and external service providers.

As a result of investments in new tools and technologies, pharmaceutical companies are bound to see the cost of meeting regulatory compliance requirements increase. Emerging trends suggest strong investments in bioinformatics, clinical trial management systems, application development and maintenance, upgrades from legacy to modern systems, electronic regulatory submissions, sales force automation, content and document management, and scientific and technical communications. Validation and qualification thus become critical to quality requirements. Regulatory compliance then becomes a top-management propriority, and pharmaceutical companies are increasingly aligning their IT strategy with regulatory compliance needs.

To meet the challenging demands in IT, pharmaceutical companies are engaging IT vendors and service providers to benefit from offshore services and end-to-end solutions. For example, Six Sigma improves productivity, digitized processes help reduce cycle time, and outsourced network and infrastructure management and application maintenance can boost efficiency and enable business innovation. With safety and quality as the prime imperatives, companies are required to adhere to various regulations that govern the manner in which IT is used in product development and manufacturing. Good clinical practices, good laboratory practices, and current good manufacturing practices (collectively known as GxP) such as Computerized Systems used in Clinical Trials, General Principles of Software Validation, 21 CFR Part 11 Rule on Electronic Records and Signatures, Computerized Drug Processing, and CGMP Applicability to Hardware and Software are legally binding (1–4). In addition, the International Conference on Harmonization (ICH) combines the regulatory authorities of United States, Europe, and Japan in efforts to achieve greater harmonization in the interpretation and application of technical guidelines and requirements for product registration.

Positive strategies include devising best practices to avoid noncompliance in IT systems, standardization, streamlining business processes and a risk-based approach toward validation of information systems. Mature pharmaceutical companies view regulatory compliance as not only a legal requirement but also an ethical requirement and a part of good business practice. A culture of quality and continued compliance essentially ensures that risks are minimized and quality is not compromised, which in turn yields lasting business value and builds up investor loyalty and faith.

Given the complex regulatory pressures, pharmaceutical companies are expected to spend more on regulatory compliance needs in the future. Chief information officers and chief financial officers are being asked to demonstrate business value to justify IT investments. It is difficult to measure the return on investment from regulatory compliance activities because it is almost impossible to prove the consequences of noncompliance when they have been successfully averted. Nonetheless, one of the major challenges for the industry is to adopt cost-effective processes and methodologies to achieve and sustain compliance.

Challenges for IT vendors

The pharmaceutical industry has started to accelerate the outsourcing and offshoring of IT work such as application development and maintenance to vendor companies. By outsourcing, companies expect to reap substantial cost savings in business areas such as IT-enabled drug discovery; clinical data management; IT infrastructure support, application development, and management; and scientific communications. Besides benefiting from cost savings as a result of the so called labor arbitrage, such companies expect their resources to focus more on innovation-led core business operations by having IT vendors look after and worry about IT-related needs.

Pharmaceutical companies expect IT vendors to help them achieve their regulatory compliance–related goals at low costs. An ability to deliver cost-effective and efficient IT services that meet regulatory-compliance requirements is the key for vendors and external service providers to win IT outsourcing contracts from companies.