E-health throws the struggling pharmaceutical industry a lifeline
CMS Cameron McKenna
Sarah Hanson discusses the need for change in the pharma industry, especially when it comes to finding cost-effective solutions, which is where e-health comes in. Sarah also explores the challenges in e-health, with regards to data protection and medical device regulatory systems, and how best to overcome them.
The pharmaceutical industry is going through a time of dramatic change. Once confident in the long-standing blockbuster business model, the tough economic climate and the looming patent cliffs are causing traditional pharmaceutical companies to explore new areas of business. The fast-growing e-health sector, in particular, is proving attractive to businesses in need of a new lease of life.
A change in approach is vital. In times of austerity, even the “recession proof” lifesciences sector is suffering from the pervading economic gloom. With drugs typically taking 12 to 15 years to develop and costing millions of pounds – with no guarantee of success – a squeeze on finances has resulted in low R&,D productivity and dwindling drug pipelines.
The impact of the patent cliff and its devastating impact on revenues has also left the pharmaceutical sector exposed, a trend set to continue this year with the patent expiration of Seroquel. With some of the biggest earning drugs now losing out to competitive generics businesses, pharmaceutical companies must look to diversify and develop new kinds of products in order to survive.
“In times of austerity, even the “recession proof” lifesciences sector is suffering from the pervading economic gloom.”
E-health, by contrast, is an area of high-growth potential. With everyone feeling the pinch, the demand for more cost-effective healthcare that can be delivered remotely at home is huge, and new technology is making it possible to develop new and lucrative medical solutions. In Britain alone, the government has pledged to roll out telemedicine services to 3 million homes to improve quality of life for patients and alleviate the pressure on long term NHS costs.
The benefit for patients is clear, but businesses are also starting to recognise this as a growth opportunity.
There are a number of challenges for companies wanting to dip their toe into the lucrative e-health pond. Technology and healthcare are both heavily regulated industries and meeting the demands of both can be complicated. Traditional pharmaceutical companies will have to get to grips with an entirely new set of regulations and be aware that products that meet the required medical standards might not do the same for technical standards, and vice versa.
“Traditional pharmaceutical companies will have to get to grips with an entirely new set of regulations…”
Data protection is a particularly important issue to consider because e-health systems usually involve the processing, collecting or storing of confidential patient information. Healthcare professionals worldwide operate under patient confidentiality rules which must be followed just as strictly in the case of computerised medical records as for face to face meetings between a doctor and their patient. In fact, a recent directive on patients’ rights in cross-border healthcare expressly mentions e-health, making it clear that providers must comply with the EU’s Data Protection Directive.
The medical devices regulatory system is also undergoing a major revision. When the proposals are published this autumn, we expect a particular focus on the integration of medical devices in e-health systems, especially personal and mobile health systems. This regulation is increasing in terms of scope. In the past, the European Commission did not apply its ‘Medical Devices Directive’ to certain kinds of software, such as computerised medical records, but in recent years a number of national regulatory bodies have revisited the issue, placing greater emphasis on the use of software.
“…we expect a particular focus on the integration of medical devices in e-health systems…”
Whilst diversifying into the e-health sector presents challenges, it could breathe new life into a somewhat beleaguered pharmaceutical industry. Success will depend on negotiating the complex regulatory demands of both industries, but the potential rewards companies may reap could be huge: a renaissance for the pharmaceutical and a new generation of healthcare solutions for patients worldwide.
About the author:
Sarah Hanson is a Partner in the Technology team and Deputy Head of the Lifesciences group. Sarah has extensive experience in advising on a broad range of commercial arrangements, including outsourcing, in and out licensing, agency agreements, supply and distribution agreements and co-marketing and co-promotion agreements. She advises across a wide range of industry sectors including lifesciences, consumer products and information technology.
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