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Chris Moore looks at how a more interconnected and dynamic healthcare ecosystem will lead to safer and better outcomes.
In the first article in a series of 2020 predictions for the life sciences industry by Veeva Systems, Chris Moore discusses how a more interconnected and dynamic healthcare ecosystem will lead to safer and better outcomes.
Healthcare spend is rising at an alarming rate, representing a striking 17% of total gross domestic product (GDP). Total US medical spend as of early 2018 was $2.4 trillion1 with estimated preventable spending of $500 billion.2 As the population ages and the incidence of age-related and chronic diseases rise, the spending curve will eventually become unsustainable for societies around the world. Next year we’ll see a more dynamic healthcare environment take root with greater collaboration among biopharmaceutical companies, providers, and payers to drive greater efficiency throughout the industry and meet this growing challenge.
With the rising costs of healthcare, payers are only reimbursing premium prices for innovative treatments such as precision medicines that demonstrate higher efficacy among targeted patient populations. Precision medicines require the ability to identify patients with rare and individualized diseases. As a result, companies are becoming more agile and integrated within the healthcare ecosystems in which they operate to get the treatments to the patients that need them.
This is driving new pricing models such as financial risk-based contracts, health outcomes contracts, and indication-specific pricing that are aligned with the unique characteristics of innovative products coming to market and, of course, the care needs of patients.3
Moving forward to operate in this more interconnected and dynamic environment, companies will reduce siloed processes and systems both internally and across the healthcare ecosystem to drive new levels of operational efficiency and collaboration. This will not only enable life sciences companies to compete more effectively, but also to work better with healthcare providers and payers in delivering the right care.
For example, we’ll begin to see a data flow from the patient or a healthcare professional directly through every part of the drug development and commercialization process, from regulatory and manufacturing, to commercial and payment approval packages. This information will also flow to patients, payers, and providers as industry silos break down, giving the industry faster visibility into data so that treatment decisions can be made. Data will also be entered once but used many times, cutting half of today’s redundant processes and most duplicated systems. Companies ultimately will become more efficient and agile in delivering treatments to the right patients.
Once this new operating model within the industry is in place, artificial intelligence will be applied to monitor patterns, connect scientific discovery across teams, identify the best clinical trial sites, and match trial populations to treatment populations. This new model will lead to safer, better outcomes, and reduced waste throughout the industry.
Chris Moore is President, Veeva Europe.
1. CMS, National Health Expenditures (figures as of 12/5/2019). Total medical spending equals health consumption expenditures minus retail sales of medical products, https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2019.01451?journalCode=hlthaff.
2. “Targeting High Cost Patients and their Needs, “Ashish K. Jha, MD, MPH, Harvard Global Health Institute, January 19, 2016.
3. PriceWaterhouseCoopers, “Six drug pricing models have emerged to improve product access and affordability,” Sept. 23, 2019, https://www.pwc.com/us/en/industries/health-industries/library/6-drug-pricing-models.html