This article, from RGA's ReFlections newsletter, discusses how the pharmaceutical industry is experiencing a technological revolution as AI transforms every stage of drug development, from predictive maintenance in manufacturing facilities to accelerating clinical trial timelines through advanced molecular behavior prediction.
Artificial intelligence (AI) is transforming pharmaceutical manufacturing by enhancing efficiency, reducing costs, and accelerating the delivery of life-saving medications. AI technologies are now integral across the drug development pipeline, spanning discovery to production.
Pharmaceutical companies are leveraging AI for predictive maintenance, real-time process optimization, and anomaly detection. For example, Pfizer’s generative AI platform, Vox, detects anomalies and recommends actions in real time, while Moderna uses AI to automate quality control and streamline logistics.
AI also plays a critical role in drug discovery. Organizations like the University of California San Francisco (UCSF) and Absci are using machine learning to predict molecular behavior, design novel drugs, and reduce the time to reach clinical trials from years to months. These advancements are supported by cloud platforms like Amazon Web Services (AWS) and hardware accelerators from Advanced Micro Devices (AMD), enabling scalable, high-performance AI applications. As AI continues to evolve, it also holds the potential to address previously “undruggable” targets.
The rapid acceleration of AI-driven drug development presents a mixed financial outlook for insurers. For health insurers, the surge in new drug approvals, especially for high-cost biologics or gene therapies, could significantly increase reimbursement burdens. While these treatments may offer better outcomes, the sheer volume and price of new drugs could strain premiums, raising questions about cost-benefit balance and the need for more dynamic pricing or value-based care models.
On the other hand, life insurers stand to benefit from these advancements. Improved treatment efficacy and the increasing number of treatment options are likely to enhance patient longevity and quality of life, potentially reducing mortality rates and extending policyholders’ lifespan. This could lead to more stable actuarial predictions and improved profitability over time.
Ultimately, the insurance industry will need to adapt its models and strategies to navigate the evolving landscape of AI-enhanced drug development.
RGA experts are eager to engage with clients to better understand and tackle the industry’s most pressing challenges together. Contact us to learn more about RGA's capabilities, resources, and solutions.
