Pharma moving to novel digital business models
Several technology trends are creating a new ecosystem: the life sciences digital ecosystem, with senior pharma executives believing that the next generation of platforms will be led by industry and not tech companies.
Several life science companies are taking the customer experience and their operations digital. However, though improving individual business processes will garner a small portion of digital's full value, they must embrace technology holistically to help patients and capture an estimated $100 billion of commercial value in the US over the next 5 years.1
Over 100 senior life science executives gave their views as part of a survey of more than 1,000 C-suite and D-suite executives across various industries. Key digital trends and their likely impact were analysed.
Impact of digital
Nine out of 10 of the life sciences respondents believed that industry boundaries would dramatically blur as (digital) platforms reshaped industries into interconnected ecosystems. Indeed, 70 per cent of respondents believed that the next generation of platforms would not be led by tech companies, but by industry players and leaders.
A full 60 per cent planned to engage with new digital partners in the next two years, while 45 per cent of those in developed markets said they were already using industry platforms to integrate data with digital business partners and 26 per cent reported that they were experimenting with these platforms.
Five trends illustrate how digital technology is influencing the industry today, and how it will continue to impact in the future:
1. Personalised healthcare
This is the era of highly personalised care, monitoring and treatment, which will help build trust between physician and patient through meaningful patient experiences. In the US branded pharmaceutical market, digitising the customer experience could drive $4.6 billion in incremental revenue.1
There is a huge opportunity to digitally engage in disease prevention, monitoring and treatment through the use of apps and wearable devices. The nature of access points is changing as the focus shifts to the patient, helped by digital personalised experiences. Yet, to succeed in creating highly personalised experiences companies must create trust between themselves and the patient.
2. Health results from hardware
According to 86 per cent of life sciences respondents, embedded intelligence would deliver better outcomes for customers. New intelligence from embedded hardware and sensors is generating improved health outcomes. Using sensitive, highly connected hardware, it is becoming easier to personalise care, measure value and target desired outcomes.
Cloud-based, real-world big data and real-time patient monitoring will drive value analytics, providing insights into patient outcomes that will drive successful value-based pricing.
In addition, by using diagnostic apps, smart pills and remote patient wearables, almost every aspect of R&D can focus on outcomes. Care coordination through collaboration and data exchange is receiving increased emphasis, providing opportunities for life sciences companies.
3. Business platform revolution
Healthcare IT platforms capture data from a variety of sources – phones, wearables, and glucometers – and connect them, creating a new era of personalised treatment.
Platform businesses are changing the world. According to the Massachusetts Institute of Technology, 'In 2013, 14 of the top 30 global brands by market capitalisation were platform-orientated companies – companies that created and now dominate arenas in which buyers, sellers, and a variety of third parties are connected in real time.' 2 Of the life science respondents, 80 per cent said they were strengthening digital capabilities by taking part in open innovation, exchanging data and technology to deliver better outcomes to partners and customers.
There is potential for disruptors to emerge in four key areas:
• The Provider: Allowing two-way external and internal collaboration that enables the control of access points and supports functions within clinical and commercial operations.
• The Patient: Providing comprehensive patient support, including trial recruitment, pre-market awareness, enhanced physician touchpoints, intelligent patient services, and smart population management to direct outcomes.
• The Product: Using open innovation to bring about the right combination of pills, services, diagnostics and stakeholders to deliver patient services that can be monetised.
• Regulatory and Reimbursement: Developing quality-compliant content for approvals, pricing and risk management; and supporting current functions, such as regulatory affairs, health economics and outcomes research, medical affairs and academic partnerships.
4. Intelligent enterprise
More than 40 per cent of the life sciences companies surveyed expected to see data volumes increase at least 50 per cent in the coming year. This is testament to how a data explosion, accompanied by advances in processing power, health analytics and cognitive technology, is fuelling software intelligence. Medical devices and wearables now recognise, 'think' and respond to make rapid, informed decisions.
The life sciences industry should establish a data supply chain. This would provide payers with real-world evidence of drug value, improve predictive models that evaluate patient risks and optimise patient safety by rapidly detecting adverse events.
To gain early insights, companies should invest in software to improve big-data analytical capabilities and incorporate a growing volume of data, including laboratory results and remote wearables data. The FDA is collaborating with online patient network PatientsLikeMe to determine how patient-reported data can give new insights into drug safety.
5. Digitally-focused workforce
Smart glasses, wearables and immersive technologies are providing more portability, insights and unprecedented contextual information for research, drug development and clinical trials. Pharma companies must determine how to train and certify human and machine interfaces for R&D, manufacturing and sales. A total of 74 per cent of life sciences survey respondents believed that companies must focus as much on training their machines as training people, using intelligent software, algorithms and machine learning.
Survey results suggest that industry executives recognise the urgency to capitalise on digital. This means they must design and build entirely new business models, embracing digital. They must take a fresh look at their capabilities and business models and find entirely new ways to meet customer needs.
Read more: Accenture Technology Vision 2015 for Life Sciences
References
1 Capturing the $100 billion opportunity for Life Sciences: are you a digital transformer or follower? Accenture 2015.
2 The Ups and Downs of Dynamic Pricing, Innovation@Work blog, 31 October 2014.
About the author:
Brags Srinivasan is a managing director in Accenture's Life Sciences practice and leads Accenture's Life Sciences Enterprise Technology practice globally.
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