Pharmaceuticals are on the cusp of a revolution, the likes of which have not been seen since their industrial inception in the 19th century. Digital technology is fundamentally changing the way we consume products and data, but for the healthcare and life sciences industry it may have come just in the nick of time, as the increasing burden of chronic disease and ageing populations threaten to overwhelm already overstretched healthcare systems. Digital could help deliver the efficiencies and cost savings that would make healthcare viable again. Not only that, it offers the prospect of a complete transformation in the way pharma companies research, produce and market their products, and how patients receive many of them.
mHealth has the ability to transform access to healthcare across the developing world. As unique subscriber penetration rises
1 (in Sub-Saharan Africa, for example, unique subscriber penetration has been predicted to reach 42.2% by 2020) the accessibility of apps such as Med Africa, which gives users in Kenya access to health information, will increase the level of patient education and improve disease outcomes. It’s also streamlining healthcare provision in more developed markets, as basics like appointment bookings go online, and people take more control of their own health through fitness and nutrition apps. This new trend towards mobile health – or ‘mHealth’ - has the potential to change almost every aspect of the ‘patient journey’, improving both the efficiency of healthcare provision, and the outcomes for those who receive it:
Let’s look at just one example – how digital can improve the lives of patients with chronic diseases like diabetes. It’s already possible for someone with this condition to upload their blood glucose reading automatically from their monitoring device to their phone and share it with their physician, using apps such as Glooko, WaveSense Diabetes Manager or GSK’s Diabetes HealthMate to help with disease management and diet. Patients can also connect with fellow patients via tools like Diabetic Connect or PatientsLikeMe, and monitor the early warning signs of complications such as diabetic foot-ulcers via home-based diagnostic systems like Podimetrics.
So what does this mean for Pharma?
The digital revolution is clearly presenting pharma companies with a host of opportunities to improve outcomes for patients, efficiency for payors, and profitability for themselves. But they need to move quickly to seize these opportunities, ahead of newer and nimbler entrants to the market.
For example, digital allows the collection and real-time analysis of vast volumes of data about the performance and potential side effects of specific drugs, which could not only help fulfil regulatory requirements in areas like pharmacovigilance, but enable pharma companies to prove the real value of the products they sell, and thereby support more evidence-based pricing models. But thus far it’s tended to be other innovative players who have exploited the potential here, by finding ways to monetise this data and sell it back to the pharma industry, as PatientsLikeMe has demonstrated.
Moreover, some of the new competitors are not smart start-ups but big established tech players, like Google, Apple and Samsung, who have the skills and the trusted brands to develop and scale digital health apps quickly. Our own PwC research has shown that consumers are willing to take healthcare services from these non-traditional providers if they offer a price advantage, which shows how vulnerable the conventional healthcare business model could prove to be
Healthcare has always been a complex sector, given the nature of what is being sold, the multiplicity of stakeholders that have to be managed, and the regulatory and reimbursement challenges that have to be addressed. Digital may help resolve some of these issues, but to take full advantage of the opportunities digital offers, pharma companies need to take a hard look at the industry’s value chain and identify where to play and – critically - who to collaborate with. We’ll be using future posts to look at how pharma businesses can capitalise on mHealth, and ensure they have the flexible revenue and operating models they need to make a success of it, and a well thought-out strategy to maximise the value of the data they collect. And looking further ahead, we’ll examine how pharma can move into the third digital wave, and make the shift from selling products to selling outcomes – how they can develop a new and more profitable business model by taking on more of the risk of healthcare provision from the payors. The tools exist to do that now, if the courage can be found to use them. In fact, pharma has a unique opportunity to improve the prognosis for its own industry by becoming not just a pill provider but a health and disease manager, and taking ownership of the whole patient journey, end to end.
Reference 1: GSMA: The mobile economy 2014
Reference 2: New Health Economy Vision for the Future