Five Steps for Seizing Opportunity
As the changing information environment opens up new opportunities, biopharma companies are eager to exploit them, but often
unclear on the best way of doing so. Here are five broad actions to take.
1. Harness new data sources Payers, providers, patients, and suppliers have historically suffered information deficits. Increasingly, however, they are
finding ways around this. As more diagnostics become digitized, physicians and even patients can make clinical decisions more
easily and accurately. In fact, patients are taking a vastly more active role in their own healthcare, thanks to Internet
search engines and the growth of Web 2.0 communities.
Providers and payers, for their part, are gaining access to clinical information from other care settings. And they are now
able to monitor patients remotely for chronic conditions such as hypertension and diabetes, and track compliance. Treatment
patterns will undergo some adjustments; so might biopharma's top line.
Meanwhile, the most prominent leaders in the "connectivity" space, notably Microsoft and Google, are becoming healthcare stakeholders
in their own right. Tens of billions of dollars are going into refining IT infrastructure, and one effect will be to put patients
in charge of their own health by pinpointing the relevant medical information for them. The impact on biopharma is on the
customer model and how to develop new approaches to engaging with key stakeholders.
2. Blow open the boundaries Accessing information is a competitive necessity; it is also becoming easier and cheaper. New networks are being developed,
both within companies and across organizational boundaries. One result is to further erode the rationale for biopharma's traditional
vertically integrated structure. Some companies are already opting for diversity in allocating their fixed costs by externalizing
selected activities within R&D, manufacturing, and the commercial space. Eli Lilly's PD2 initiative (Phenotypic Drug Discovery,
pronounced "PD-squared") offers disease-state assays and a secure web portal that allow the company to evaluate compounds
synthesized in university and biotech labs, in exchange for first rights to negotiate a collaboration deal.
3. Personalize and segment Personalized medicine is a product of the information explosion, which has made it possible to stratify the patient population
for any disease, and fine-tune treatments for individual patients. The art of prescribing requires subtle combinations, substitutions,
or variants of drugs. And these trends will only deepen as the human genome is investigated further and better understood,
and as more biomarkers are discovered. For biopharma companies, this means an increase in challenges, such as less chance
of developing mega-blockbusters. But it could also offer benefits, such as upgrading existing drugs by adding indications,
or improving compliance and availability.
The future will see scenarios such as Web-based self-diagnosis, automatic drug dispensing, micro-segmenting of prices, and
broader sets of OTC drugs. "Pharmacovigilance" will come of age: today's spontaneous system of adverse-event reporting—relying
on individual physicians to notice rare events—will yield to a more reliable observational system based on the total data
drawn from all sources. Biopharma companies once again have much to fear and much to hope to take from such developments,
yet as a group they are responding too hesitantly, only just starting to invest in some of the new "connected" platforms.
4. Use data to demonstrate value. Relevant data is growing in volume, visibility, and accessibility. Data on clinical research and outcomes is now increasingly
available thanks to new databases and information exchanges. The EudraCT database, for example, details all clinical trials
conducted in the EU since 2004, and allows authorized stakeholders to access them. In the US, the National Cancer Institute
is expanding CA-BIG, the Cancer Bioinformatics Grid, whose goal is to include all oncology trials online. Eventually oncologists
should be able to upload their own patients' data and search for similar patterns and outcomes from other physicians.
The implication is that biopharma companies will have to make a reassessment of how they create and demonstrate value. The
rules have changed, with pricing pressure intensifying from all sides (patients, media, health plans, and governments) now
that more stakeholders have their hands on sophisticated outcomes and cost data. For example, United Health has a $1 billion
subsidiary, Ingenix, that is dedicated to managing data and enabling real-time comparative effectiveness and postmarket drug
surveillance. Other factors that biopharma companies will have to reassess are how to engage with regulators and payers; how
to address privacy concerns; and how to optimize trial design, pricing, and commercialization.
5. Help reshape the information landscape. Biopharma companies are losing their information advantage. Other stakeholders are taking over various aspects of the information
landscape in efforts to manage costs and shape outcomes, using a "best treatment" paradigm. Of course, "best treatment" depends
on how "best" is measured, but it seems clear that biopharma is losing command of the definition. Companies not only have
to create superior products, they must find new ways to demonstrate this superiority. They have to assess what investments
they should make in infrastructure or capability, analyze and synthesize the data, and launch it into the information realm—and
participate in setting standards.
For further information, contact the following representatives of the Boston Consulting Group: Peter Tollman (Senior Partner,
Boston) and Alan Iny (Principal, New York), Philip Evans (Senior Partner, Boston), Simon Goodall (Partner, Los Angeles), Simon
Kennedy (Partner, Boston), Dave Matheson (Senior Partner, Boston), Valery Panier (Partner, Boston), and Martin Reeves (Senior
Partner, New York).