Pharma 3.0: what it means for market access
Peter Mansell explores the new partnerships and new models needed to assure successful market access strategies.
By on Apr 20, 2010Peter Mansell explores the new partnerships and new models needed to assure successful market access strategies.
New partnerships and business models will define a radically different ecosystem for the pharmaceutical industry in years to come, with shifts in emphasis that promise to dwarf anything the industry has seen so far, Progressions, Pharma 3.0, a recent Ernst & Young report, suggests.
This new paradigm underlines the need for fresh thinking about market access strategies as the core value proposition in pharmaceuticals moves from developing drugs to delivering healthy outcomes.
Innovation remains the driving force, but it is no longer just about the product; it now encompasses how you do business, whom you do business with, and how you mobilize your resources to contribute to healthy outcomes for patients, say Carolyn Buck Luce, global pharmaceutical leader, and Glen Giovannetti, global biotechnology sector leader, at Ernst & Young.
The healthy outcomes system
As the consultants note, industry has already transitioned from a vertically integrated model (Pharma 1.0, in Ernst & Young parlance) into a more complex, dynamic and interdependent ecosystem (Pharma 2.0), involving diversified portfolios, more flexible R&D structures, a growing focus on specialized therapeutics, and partnerships with biotechnology companies, academia or contract research and manufacturing organisations.
Pharma 3.0, the healthy outcomes system, will take this process even further, spurred by a convergence of trends such as healthcare reform, demographic changes, health information technology (IT) and consumer power, Ernst & Young believes. This calls for new business models built around combinations of three value propositions:
- Managing patient outcomes (e.g., boosting patient compliance/adherence, targeted healthcare delivery)
- Expanding access to healthcare (tapping into underserved/emerging markets, uninsured patients in industrialized countries)
- Addressing unmet medical needs (complex indications and underserved therapeutic areas)
Data-empowered patients
The need to tackle issues such as comparative effectiveness assessments, which put the onus on industry to pre-empt payer decisions through more creative data-mining, will bring a variety of non-traditional partners like IT specialists and electronic/mobile health companies into the marketplace, predicts Ernst & Youngs report.
End-users will hasten this diversification as IT solutions enable patients to shrug off the paternalistic model of healthcare and become the data-empowered super-consumers of tomorrow.
As such, pharmaceutical companies need to be prepared to step outside their comfort zones, Ernst & Young warns. They must think about combining different business models rather than just managing collaborations that add to core capabilities; adopting a commercial trials approach to business model development; adapting to much faster product lifecycles; and embracing a fundamental shift from selling products to delivering services.
Multi-faceted relationships
The report explores in some depth the kind of multi-faceted relationships that could evolve in a Pharma 3.0 environment. It also cites a number of early examples of initiatives that address the three value propositions. In terms of managing patient outcomes, these include:
- Community-building initiatives such as MyBrainGames, a free suite of online games with cognitive challenges for MS patients launched through an alliance of Bayer HealthCare, Microsoft and the US National Multiple Sclerosis Society.
- Technological advances like the Lifescan application under development by Johnson & Johnson and Apple to enable uploading and sharing of glucometer data through an iPhone; or Novartis/Proteus sensor-embedded tablets, which will transmit data to monitor patients vital signs and aid compliance.
Expanding access and addressing unmet needs
On the expanding access front, there are product-based initiatives like Pfizers agreement to license generic drugs from Indias Aurobindo Pharma; technological innovations such as the Novartis/Vodafone/IBMs SMS for Life program, which uses mobile phones, short message service (SMS) devices and websites to manage the supply of malaria treatments; or new modes of distribution like Novartis plan to sell OTC medicines through rural post offices in India.
The most comprehensive list of initiatives comes under the heading of addressing unmet needs perhaps not surprisingly, as this value proposition is more integrated into industrys current business model and reflects the well-recognized demand for new sources of innovation and cost-efficiency in R&D.
Here Ernst & Young references issues ranging from data leverage to R&D optimization, orphan drug development, public-private partnerships, R&D risk-sharing, pre-competitive R&D collaborations, partnerships with payers, and creative financing models. Examples include:
- The Innovative Medicines Initiative set up by the European Commission and the European Federation of Pharmaceutical Industries and Associations to accelerate drug discovery and development in selected therapeutic categories.
- The R&D risk-sharing alliance under which biopharmaceutical services provider Quintiles will develop six oncology products in Eisais pipeline.
- The National Institute for Health and Clinical Excellences advisory role in designing a late-stage clinical trial to boost Novartis chances of securing reimbursement for a new drug in the UK.
Its all about the data
With healthcare IT driving many of the trends identified in the Ernst & Young report, data ownership is a key concern for industry as it moves tentatively into the Pharma 3.0 era one also bound up with advances in digitalization, electronic health records, mobile telecommunications and social media.
As Ernst & Young comments, while the process of taking a drug from research candidate to approved product has become data-rich and high-tech, the process of delivering these approved products to patients healthcare itself has remained remarkably low-tech in much of the world. That is now starting to change, with tremendous implications for pharmaceutical companies.
One implication is that the imminent expansion in health data could take comparative effectiveness to an entirely new level. It also shifts the emphasis from value based on clinical data, historically monopolized by industry, to value based on data mining or value mining. In this context, knowledge about efficacy will move into the public domain and become unbundled from the pill, the report suggests.
Collaborations with data vaults
David Norton, chairman of Johnson & Johnsons Pharmaceutical Group, acknowledged this challenge at a roundtable discussion convened by Ernst & Young to discuss the changing ecosystem for pharmaceuticals. To a great extent, we have lost control of the data and, in many ways, our traditional position as information providers, he said.
In the future, commented Kristen Peck, senior vice president, strategy and innovation for Pfizer, data will not be owned by one person but owned by many, with very different incentives We need a paradigm shift in how we think about data, how we think about outcomes.
And once again, non-traditional partnerships may point the way forward. Pharma could gain competitive advantage by moving early to forge collaborations with data vaults, Norton suggested. We could then deliver better information and value to patients. And in the end, thats what counts.