Challenges for corporate governance: Artificial intelligence disrupts pharmaceutical companies

Michael Kuss Partner and Leader Governance, Risk and Compliance, PwC Switzerland 04 Dec 2019

Technological and market-related breakthroughs make it necessary for pharma companies to make strategic decisions on how to benefit from AI in the future. The transformation of a traditional pharmaceutical company to a “digital pharma player” will affect the nature, scale and complexity of its R&D and the respective corporate governance.

PwC has developed a framework to leverage AI responsibly

Tech companies such as Alphabet (Google) and various start-up companies that are more rooted in data analytics and artificial intelligence (AI) than in the highly regulated healthcare sector are entering the pharmaceutical market. They make easy use of the opportunities available and will disrupt the pharma sector, as pharmaceutical companies usually lack digital and AI competencies on a larger scale. As a consequence, pharmaceutical companies need to develop more data science competencies and to transform their R&D model to become “digital pharma players” if they do not want to lose speed in innovation and lose ground in the race for better, safer and affordable drugs. So today’s questions for pharma companies are:

  1. Who can develop and implement an AI-driven R&D strategy fastest and to the greatest effect?
  2. Who can become a “digital pharma player” to fully leverage the potential of data science and AI?
  3. How can pharmaceutical executives manage the necessary fundamental transformation?
  4. What is the suitable and transparent organisational and operational structure of a pharmaceutical R&D organisation of the future?
  5. How can pharmaceutical executives achieve responsible AI governance? 

Pharmaceutical companies may underestimate the disruption that will result from tech companies entering the pharma market

Pharmaceutical companies have generally realised the potential of AI in pharma R&D, but only some companies (“digital pharma players”) have started to grasp its full potential by using AI-based analytics along their entire value chains. The more traditional research-based pharma companies (“conservative pharma players”) and the ones that use AI on a project-specific basis (“selective AI explorers”) may underestimate the potential of data analytics and AI.

The editorial on the impact of AI on pharma R&D (Schuhmacher, A., Gassmann, O., Kuss, M., Hinder, M., The Art of Virtualizing Pharma R&D. Drug Discovery Today. 2019; 24: 2105-2107) describes how AI is entering the pharma market, how pharma companies can make AI part of their strategies and what kind of future pharma archetypes can be expected in the coming years.


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Dr. Alexander Schuhmacher

Dr. Alexander Schuhmacher

Governance, Risk and Compliance, PwC Switzerland

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Markus Perdrizat

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