The Future of Pharma: Moving Beyond the Pill?

In a recent discussion about the next generation of Pharma innovation, Novartis CEO Joseph Jimenez stated, “I really believe that in the future, companies like Novartis are going to be paid on patient outcomes as opposed to selling the pill.”  With the rise of generic competitors, impending patent cliffs, influence of the Affordable Care act and scarcity of blockbusters, pharma companies must do something to differentiate themselves and generate profits.  And that something, according to Jimenez, is to create a range of value-added services that go beyond producing traditional medicines. “Beyond-the-pill is a logical and inevitable path forward for all,” he said, with the goal of “creating value by embedding products into a holistic offering with the aim to improve patient outcomes and provide tangible competitive advantages.”

So, what exactly does this mean?

With the industry shifting its commercial efforts from a transactional to an economic/value based model, it means pharma should develop a more patient-centric viewpoint. The following insights elaborate on the commercial aspects of the pharma industry’s readiness to adopt a patient-centric view:

1.       One industry objective should be to get its arms around all of the new, patient level data that is emerging in the marketplace.   From APLD (anonymized patient level data) to PGHD (patient generated health data), much big data is out there that can be analyzed to determine patient needs and help them manage their disease state.

Getting access to patient data from things like wearables, diagnostic equipment or treatment data will help analytics teams start to develop insights into what their patients need (both from a treatment and a support perspective), which ultimately could lead to improved outcomes.  In practicality, services could include ideas like telehealth support, digital platforms, wellness programs or other mechanisms to improve disease state management.

2.       Interestingly, pharma executives realize that while all of this big data is a boon to the industry, competition may not necessarily come from within.  In fact, 59 % believe that pharma’s greatest competition will come from outside the industry, such as big data analytics companies that have the experience to assimilate all of this data and find insights.  Pharma has yet another reason to step up its game in moving beyond the pill into non-traditional areas, including big data analysis.

3.       Ultimately, the entire commercial organization may need to shift away from the traditional silos towards a new, agile organizational model focused on service-oriented support systems.  This reorganization could be a radical shift to those commercial teams used to solely marketing a pill.  Teams may need to think differently about how to engage with their patients over the long-term.   This means building trust, delivering value and providing the consumer a much higher level of service than pharma has traditionally provided to them.   And, it also means thinking about the relationship between HCP, payer, patient and pharma – and how interconnected the participants are these days; payers may be more willing to contract favorably for overall improved outcomes.

4.       While a recent survey of pharma professionals revealed that 80% believe that focusing on patient-centricity is the best route to profitability, not all is as rosy as it seems.  It’s one thing to agree with this statement, but actions speak louder than words; many companies have yet to fully-embrace the concept internally nor develop strategies and programs around it.  Pfizer tried it for two years with its now closed “Integrated Health Division” and learned the hard way a few important lessons.

Selling a service is much different than selling a pill.  Physicians aren’t used to this concept nor have allocated learning time.   In addition, the regulatory environment is very much a factor in success.  From what information can be collected and shared, to how software product updates are deployed – these items are still being addressed by the FDA and are on the edge of pharma marketing practices.  It can take years to build a true service offering.  While Pfizer’s two year experiment did increase revenue, it did not meet short-term earnings goals.  Having the patience and culture to build and support these service offerings does not happen overnight.

5.       Last but not least, of course, is the factor of the patients themselves.  Will they give their personal data over to pharma, even if anonymously?   As new platforms emerge, like Apple’s soon-to-be-launched  HealthKit, it remains to be seen if HIPAA requirements can be met and patients can be convinced to share their health data in exchange for value-added support.

Regardless, the industry seems to be shifting its views by focusing on patient engagement, value over competitors and improved outcomes.  This trend is nascent and it remains to be seen who will be commercially successful going “beyond the pill.”