How Cyber and Data Resilience Support Growth in Life Sciences

How Cyber and Data Resilience Support Growth in Life Sciences
September 4, 2024 8 mins

How Cyber and Data Resilience Support Growth in Life Sciences

How Cyber and Data Resilience Support Growth in Life Sciences

As digitalization presents new risks and opportunities for life sciences organizations, implementing cyber and data resilience ensures that innovation doesn’t result in business interruption.

Key Takeaways
  1. Digital infrastructure is transforming supply chain efficiency, climate risk management and the pace and cost of drug development.
  2. Data and cyber measures must be robust enough to protect large amounts of valuable data held by life sciences organizations, such as patient records, clinical trial data and intellectual property.
  3. Businesses must plan and prepare for evolving exposures to ensure they can optimize growth opportunities.

As businesses embrace rapid digital transformation, they become increasingly reliant on technology and automation. Embracing innovation is fundamental for life sciences organizations to better support employees and improve patient health. However, with the adoption of new technology, data and cyber risks increase throughout business operations.

Business Operations Increasingly Depend on Digital Infrastructure

Cyber attacks and data breaches are set to be the number one future risk for the life sciences industry, according to Aon’s Global Risk Management Survey.

  • Supply Chain

    Life sciences organizations rely on complex, global supply chains, typically involving several third-party suppliers, to produce medicine and medical devices. To provide for patients, they must ensure their supply chain is as secure as possible through strong governance. This includes the supplier selection process, contracting, risk management, insurance and digitalization of supply chain operations.

    Although many innovative products are produced within geographical clusters in the U.S. and Europe, most active pharmaceutical ingredients (APIs) are produced in India and China. This increasingly presents sourcing and pricing challenges in the context of geopolitical tensions, energy shortages and climate-related interruptions.

  • Environmental Events

    Extreme weather events related to climate change make the safe delivery of medicines and therapies to patients more challenging. Raw materials, production and distribution can all be impacted. With many drugs requiring temperature-controlled conditions in logistics, any road blockages or shipping delays due to extreme weather events can severely disrupt deliveries.

    Businesses can get ahead by incorporating climate risk management and using climate data to map potential environmentally related exposures. However, to implement this, organizations must equip themselves with the digital skills and insights to leverage effective climate data and modeling.

  • Implementing Technology to Build Product Pipelines

    The fragility associated with building and maintaining a strong pipeline puts a huge strain on the financial resilience of life sciences organizations. To bring a new product to market, pharmaceutical businesses must invest an average of $1 billion and up to 10 – 15 years, with nine in 10 drug candidates failing to reach the approval stage.1

    Innovations in artificial intelligence (AI) and machine learning (ML) have the potential to expedite huge start-up costs by bringing new compounds to market. With innovative technology efficiently analyzing compounds and ruling in or out their potential for therapeutic impact, the involvement of AI in drug production will likely progress at a rapid pace.

    However, implementing AI in drug development also brings a new level of digital risk — any data breaches or cyber infiltration could incur significant costs from a time, financial and intellectual property (IP) perspective.

#1

Cyber attack or data breach will be the number one risk to life sciences organizations in 2026, moving up from the number two top risk in 2023.

Source: Aon’s Top Risks Facing Life Sciences Organizations

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Business Interruption from Cyber Attacks

Businesses must carefully assess and mitigate risks with valuable organizational information held in digital forms, such as research and development strategies, IP data and commercial terms. The knock-on impact of a cyber attack event can cause large business interruption losses and increased Food and Drug Administration (FDA) scrutiny.

Attacks create a short-term impact while production is shut down, as well as a longer-term impact. This is caused by delays in restarting production, which cannot be done immediately upon the system control being reestablished by the attacked party. FDA approval is also required before production can begin again.

With 53 percent of digital medical devices in the U.S. at risk of cyber attacks, the FDA has published new approval guidance that will reject applications for any cyber medical device that does not include a cyber attack protection plan.2 Business interruptions from digital attacks on third parties and supply chains impact both suppliers and partner organizations, while other time-sensitive life sciences projects, such as clinical trials, are also jeopardized.

53%

53 percent of digital medical devices in the U.S. are at risk of cyber attacks.

Source: The FDA will no longer approve digital medical devices that are vulnerable to cyber attacks, Quartz, 2023

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We anticipate this to be a transformative year for the life sciences industry, as digitalization and innovation unlock the next wave of industry growth and propel businesses that grasp the opportunities before them.

Meaghan Piscitelli
Partner, Global Life Sciences Industry Leader, Enterprise Client Group, Aon

Preparing for Growth with Cyber and Data Resilience

More than one-third of life sciences companies do not have a plan to deal with the risk of a cyber attack.3

Life sciences companies must understand how to use data effectively in their business plans to mitigate risk exposures — whether safeguarding supply chains or protecting themselves from external threats, such as climate-related events. Adopting new technology, fostering cyber resilience and assessing data measures will ultimately provide the way forward to ensure therapeutic advancements, IP and supply chains are well-positioned for future growth.

Discover more about managing human capital challenges to drive innovation and growth with Aon’s Better Decisions on Risk Capital and Human Capital for Life Sciences report.

Aon’s Thought Leader
  • Meaghan Piscitelli
    Partner, Global Life Sciences Industry Leader, Enterprise Client Group, Aon

1 Why 90% of clinical drug development fails and how to improve it?, Acta Pharmaceutica Sinica B, 2022
2 The FDA will no longer approve digital medical devices that are vulnerable to cyber attacks, Quartz, 2023
3 Aon’s Cyber Risk Report: Life Sciences

General Disclaimer

This document is not intended to address any specific situation or to provide legal, regulatory, financial, or other advice. While care has been taken in the production of this document, Aon does not warrant, represent or guarantee the accuracy, adequacy, completeness or fitness for any purpose of the document or any part of it and can accept no liability for any loss incurred in any way by any person who may rely on it. Any recipient shall be responsible for the use to which it puts this document. This document has been compiled using information available to us up to its date of publication and is subject to any qualifications made in the document.

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