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Deloitte's Life Sciences & Health Care Blog

Unlocking the untapped potential of intelligent automation in life sciences

Intelligent Automation (IA)—the combination of artificial intelligence and automation—is rapidly becoming mainstream in nearly every sector of our economy. Companies are using IA to improve operational efficiencies by performing repetitive tasks far more quickly and accurately. Beyond improvements in productivity, IA also can enable higher levels of business value through innovation and strategic growth.

While industries such as financial services and retail have tapped into the potential of IA, its use across the life sciences sector has been nascent. There are efforts underway within corporate functions such as finance and human resources, and there has been some experimentation within research and development (R&D), regulatory, and manufacturing areas. However, we see untapped potential in applying these same technologies to the heart of the business: the commercial function.

Commercial decision-makers typically want to see tangible business value, but clearly articulating the value of IA to commercial functions can be a challenge. During a recent client engagement, we identified more than 250 business areas where automation can be leveraged to deliver broader strategic value such as increased revenue, enhanced business intelligence insights, and effective compliance.

To take advantage of the IA opportunities in the commercial function, biopharmaceutical companies and medical device manufacturers might consider our formulary validation solution. This solution uses process automation and cognitive analytics to address critical process gaps in the market-access function. Conducting this validation comprehensively can help life sciences companies potentially realize significant business value.

Using IA for Formulary validation

Many biopharmaceutical manufacturers pay millions (in some cases billions) of dollars in rebates each year to pharmacy benefit managers (PBMs) and plan sponsors to have their products placed on preferred formulary tiers. An exclusive product in a preferred tier, for example, might require higher rebate payments than a drug that shares a tier with competing products.

Pharmaceutical products are sometimes incorrectly listed on the wrong tiers, which can happen when the formulary is not up to date, or if the formulary does not reflect changes to all approved indications for a product. Incorrect placement on a tier can lead to significant revenue loss for the manufacturers because they don’t receive the maximum benefit of the rebates from PBMs and plan sponsors. Moreover, a PBM or plan sponsor might still erroneously request the full rebate amount from the manufacturer.

Due to the volume of transactions, and increasingly complex contractual arrangements, manufacturers can face an insurmountable operational challenge when attempting to manually check formulary positions for their entire product portfolio.

An IA-driven approach can collect relevant documents (e.g., contracts, claims data, and formulary listings from multiple sources) and use them to validate the correct rebate amounts for each claim. Furthermore, IA can be used to help interpret complex prior authorization (PA) language to determine if a product is being disadvantaged against competing products. Fixing errors identified through this comprehensive formulary-validation process could translate to millions in revenue for the manufacturer. Moreover, this technology could help ensure that patients have timely access to needed therapies.

We estimate that automating formulary validation could result in a savings of between 3 to 5 percent of rebates paid. It can also reduce the manual workload for people who currently perform this task. As a result, those employees could focus their attention on more strategic activities.

Additional examples of using IA in market-access functions include monitoring 340B eligibility, proactively monitoring and updating GPO rosters, and managing pricing administration processes.

How to get started

Before diving head-on into new platforms and solutions, biopharma and medical device companies might need to demonstrate that IA can lead to a significant return on investment. To achieve this, we have found success by implementing pilots or proof-of-concept programs that have limited scope and brief timelines. Such pilots could, in a short period, demonstrate significant quantifiable value. The pilots can then be scaled up to incorporate a broader portfolio of products and functions, along with the adoption of advanced technologies.

We believe that incorporating IA into the commercial functions has tremendous potential for life sciences companies. By applying an iterative process of moving from initial pilots to expanding the scope in subsequent phases, commercial teams should be able to demonstrate the value of IA. As a result, we anticipate IA capabilities will quickly gain traction and take hold in the industry.

In subsequent blogs, we will explore the use of IA in other commercial functions such as sales, marketing, and patient services.

Author bio

Shirish is an experienced senior manager in Deloitte Consulting LLP’s Life Sciences practice. He has over 14 years of business transformation experience within commercial sales, marketing and market access groups at major biopharma and med device companies. Shirish co-leads Deloitte’s offerings applying intelligent automation solutions to the life sciences commercial model.

Muna has over 18 years of experience working in the life sciences industry improving margin and business performance through commercial insights into plan, provider, and pharmacy businesses. She defines strategy, operating model and stands up value-based capabilities required to win in the evolving ecosystem. Muna co-leads Deloitte’s offerings applying intelligent automation solutions to the life sciences commercial model.