How digitization of pharma R&D can decrease supply chain costs

Sourcing comparator drugs for pharma research and development process is expensive and there is high risk of receiving a counterfeited drug from a third-party supplier. To reduce these adverse effects, TransCelerate Biopharma started Comparator Network Initiative to introduce a digital platform where companies can source drugs for each other in a safe a quick way.

When you get sick, you head to the pharmacy, buy medication, and feel better a few days later. But how do you know the drug(s) you are taking will actually help you, or that they’re actually safe?

Drug R&D and clinical trial process is heavily regulated around the world to ensure safety and efficacy of drugs. The regulatory bodies (e.g., FDA in the USA) are demanding increasing number of data, analysis, and comparisons from pharma companies to ensure safety of drugs. To receive regulatory approval, companies are required to compare efficacy and safety of a new drug with established therapies as well as prove the benefits of the new therapy. [1]

This requirement sounds simple and logical, right? However, clinical trials are usually conducted in multiple locations worldwide, and the results are stored in different databases in an inconsistent manner. Therefore, it’s difficult to understand current therapies’ efficiencies, safety levels, and costs. [1]

Pharma companies first need to identify the comparator drugs, and then rely on supply chain intermediaries to deliver the commercially marketed “comparable” drugs. However, the third parties occasionally experience decreased security, delays, and limited access to key drug documentation. The sourcing process is expensive, inefficient and difficult. Thus, pharma companies face the risk of counterfeits emerging onto the market, as the decreasing supply, increasing demand, and cost of “comparators” create an incentive for inappropriate conduct. [2]

Exibit 1: A Drug Supply Chain Example. FDA. Available:

Push for transparency

It is expected that the supply chain costs will decrease when companies gain additional data on demand and purchasing behavior. They will be able to improve the forecast quality up to over 90 percent in the relevant level, e.g., SKU. [3]

Thus, ten pharma companies founded TransCelerate BioPharma, a non-profit focused on simplifying and accelerating the R&D process of therapies. [4] To solve the issue of sourcing comparator drugs, the Comparator Network Initiative introduced a digital platform where companies can “reliably and rapidly source quality comparator products from each other for use in clinical trials” [2].  The participating pharma companies use the platform to source drugs directly from each other and readily share information. [1] By facilitating the transparency regarding supply and demand, the initiative accelerated timeline of the R&D process and improved patients’ safety. This initiative also simplified the supply chain and drove costs down. [5]

TransCelerate understands that driving transparency on a global level needs to cover additional aspects of the R&D and influence additional players to join the network. Therefore, TransCelerate is working to integrate more members in the network. For example, Novartis joined the non-profit in September 2017. [6] However, getting all members to join TransCelerate and accept its approach to the R&D process is a long-term game.

TransCelerate is working to expand its initiatives to enhance data sharing to drive further efficiencies in the supply chain and patients’ safety.[8] For instance, the non-profit has already introduced Clinical Data Standards Initiative to provide aggregation of data and gain efficiency in data collection in the short term. In the longer term, this initiative would aim at gaining interoperability between research sites, pharma companies, and Electronic Health Records to drive transparency of different R&D processes. Additionally, the company is working on eConsent initiative that will in the long term consolidate patients’ information to get insights into patients’ understanding, increase regulatory compliance, and reduce quality risks. [5]

How to become the industry standard worldwide

To meet both short and long-term goals, TransCelerate should focus on integrating the regulatory bodies data and processes into the digital R&D infrastructure. By having organizations such as FDA on their digital platform, it will gain credibility among pharmaceutical and biotech companies. If more members join TransCelerate, there will be more transparency, and ultimately more efficiencies achieved in the supply chain. Wining Supply Chain Innovation Award at the Council of Supply Chain Management Professionals EDGE Conference shows that TransCelerate can bring value, but will it be enough to encourage other players to join the network? [4]

Setting up a non-profit organization to improve the efficiency of the R&D process through digitization of information storage and standardization of the R&D approach is important; however, the integration of multiple data sources holds a significant risk of data leakage. For example, a patient’s information could be hacked and sensitive data on their illnesses could be compromised. Companies’ competitive information could be released, risking loss of R&D secrets. Will patients, pharmaceutical companies, and regulatory bodies trust TransCelerate to protect their data?

Additionally, global interoperability among systems is a problem that has yet to be resolved. [7] Will TransCelerate be able to create an end-to-end healthcare system worldwide despite high switching costs? Or will it become a US/ Europe centered program with limited coverage in emerging and smaller markets?

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[1] Pega, “Outcomes 48 stories of success”. [Online]. Available:

[2] TransCelerate Biopharma, “Comparator Network”. [Online]. Available:

[3]. Alicke, K., D. Rexhausen, and A. Seyfert, “Supply Chain 4.0 in consumer goods,” McKinsey & Company. [Online]. Available:

 [4] Council of Supply Chain Management Professionals, News release “TransCelerate Wins Supply Chain Innovation Award at CSCMP’s EDGE Conference”. [Online]. Available: 

[5] TransCelerate Biopharma, “What we do: Evolution of a TransCelerate Initiative”. [Online]. Available:

[6] BusinessWire, “TransCelerate BioPharma Grows Industry Collaboration”. [Factiva]

[7] Ed Kellar; Brett Wilson, Susan Bornstein, Aleny Caban, Michelle Crouthamel, Catherine Celingant, Patricia A McIntire, Chrissy Johnson, Prasann Mehta, and Vanja Sikirica. “Optimizing the Use of Electronic Data Sources in Clinical Trials: The Technology Landscape”. Therapeutic Innovation & Regulatory Science, Volume 51; Issue 5, September 2017. [Factiva]

[8] Transcelerate Biopharma, “Information Sharing and Harmonization Subcommittee QuickDraw”. [Online]. Available:

[9] Cover photo. [Online]. Available:


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Student comments on How digitization of pharma R&D can decrease supply chain costs

  1. The pharmaceutical supply chain is one of the most convoluted and opaque supply systems in the world. Part of this is due to regulation, product complexity, and an obsessive focus on safety. A system like TranCelerate will allow these companies to reliably source competitors products for use in their own clinical trials, which will benefit the speed of R&D in the industry. One concern would be the reluctance of certain companies to join such a network in an effort to actively prevent competitors from using their drugs in the R&D process. For example, a generic drug maker must have a steady supply of the brand name drug in order to prove comparability. But what if that brand name company (Valeant or Turing) brings their pharmacy in-house and refuses to fulfill orders to generic manufacturers? TransCelerate should work closely with global regulatory and legislative bodies to stop this backward behavior and allow industry R&D to move forward.

  2. Thank you for sharing your analysis and insights, Monika! To me, it is easy to overlook how much impact digitalization can add to a traditional industry like pharma and medical supplies, and I think that you accurately raised the positive effect of the digital and the factors at risk for TransCelerate to scale its initiative. TransCelerate’s project makes sense very well, as more data they have, more acceptable the clinical trial becomes by the regulatory rules.

    To your question about how patients, pharmaceutical companies, and regulatory bodies to trust TransCelerate to protect their data, I think that this is a challenge. One suggestion I have to combat this is to get several prestigious pharmaceutical companies and their supplying hospitals to be on the board for the project, and create a successful case study of the faster R&D cycle with increased safety for patients and transparency. I also think that the speed of the R&D cycle that the digitalization will add is going to be a key success factor for TransCelerate. As you suggest, I agree that having FDA on board adds a credibility of the platform and technology, and moving a traditional entity to trust in the project will be another area to tackle. Also, involving the government to invest in the project is another way for TransCelerate to gain trust. On the organization side, TransCelerate must hire skilled engineers and security teams. It will be critical that TransCelerate learns the operating model as a sophisticated software company to emphasize on the security of the data collected.

    To your point about about how TransCelerate can create an end-to-end healthcare system worldwide despite high switching costs, I think that current model is tailored toward US & Europe market. One issue is that regulations around pharma/medicals differ tremendously depending on regions and countries, and localization is needed in order for TransCelerate to digitalize the aggregation, analysis, and compare between data. However, the need for shorter R&D cycle, easiness to compare and analyze data, and transparency/safety for drugs is absolutely a hot topic in other regions such as Asia. In my opinion, TransCelerate should focus creating successful cases in US/Europe for now, and as these markets are the leaders in medicine worldwide, if they can scale the project in these regions, this will become an industry practice for other regions.

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