Drive or Be Driven – Pharma in a Changing Healthcare Environment
Pharma needs to change, but how the industry does it is still up in the air.
Barcelona 2016 is quickly creeping up on us. With a new year, a new agenda, new speakers, it is easy to forget that this year’s topics all come from a context, a rapidly changing healthcare environment where pharma might have to redefine its role.
Last March, Paul Simms, Chairman of eyeforpharma, opened a panel discussion between Jesus del Valle, James Barlow, Ceri James and Michel Goldman; playing devil’s advocate he stated “We’re not staring into an abyss right now; we’re not feeling the same external pressure as in other industries such as music, media, finance.”
Professor James Barlow, Chair in Technology and Innovation Management – Healthcare, Imperial College Business School, disagreed. “The abyss is beginning to loom larger,” he said. “In the developed world, the next 10-15 years is going to be dominated by the need to do more for less. That’s absolutely clear: we can’t go on spending ever-increasing amounts of GDP on health services, so finding cheaper, simpler models of care – moving away from high-tech, high-cost settings for delivering care is going to be dominant.”
This imperative adds up to a massive change for pharma. “As part of that, pharma will have to adjust – looking much more closely at the patient, building services around patients, being part of that eco-system of integrated care services which are beginning to be put in place in different countries,” he went on. “Not changing is not an option. We’re probably not going quickly enough.”
Non-pharma competition
An eyeforpharma poll found many in the industry believe that pharma’s competitors would be non-pharma companies in ten years’ time. Michel Goldman, Professor, Université Libre de Bruxelles and Past Executive Director of the European public-private Innovative Medicines Initiative (IMI) agreed with this.
“The question is the pace of the changes,” he explained. “Pharma companies now realize they are losing their monopoly in health technology – not just drugs, but medical devices and new digital tools. The question for pharma will be to see how they organize their collaborations – not only with academia but with major industries such as the IT sector.”
This is a big shift for a sector that has traditionally kept its cards close to its chest. “They will have to accept that uncertainty is part of the business,” Goldman continued. “We can manage risks.”
Slow pace of change
Step-changes, such as Apple moving into clinical trials, are already on the horizon, said Ceri James, Director of Innovation & Product Development, McCann Complete Medical – but he added that there are plenty of cultural reasons why the pace of change will be slow.
One pharma company trying to lead the way in this regard is Bayer. Jesus del Valle, Head of Bayer “Grants4Apps Accelerator”, explained that a key to this was not being bound by thinking about processes. “The world is changing and we want to change with it,” he told the audience at Barcelona. His team is talking to digital health start-ups, aiding the most promising ones with money, mentoring and coaching in order to achieve two goals: to help fund new business models, technologies and services; and to bring an entrepreneurial culture into Bayer’s business.
Benefits from entrepreneurs
Just speaking to these entrepreneurs can bring benefits, Bayer believes. “It’s a long-term commitment,” del Valle says. “Can we adapt and use some of these digital services ourselves, and can we learn simply by interacting with them? It has been working well up to now. We want them to help us change our ways of looking at things.”
Michel Goldman said there was a “lot to be learned from other industries”, and pharma’s collaboration with non-traditional partners – not just academia – could be enriching. “The problem is that we still need incentives to promote collaboration,” he went on. “It won’t happen necessarily by itself and we have to think seriously about rewarding those who are collaborating successfully. You also have to think about the impact of these new collaborative models on the organization of the companies themselves.”
Collaborative working
Ceri James at McCann Complete Medical cited the Be Healthy, Be Mobile campaign as one of the new kinds of partnerships which have started to emerge, despite these challenges. This is an mHealth initiative to provide multidisciplinary expertise, health information and mobile technology to fight chronic non-communicable diseases in low- and middle-income countries. Led by the International Telecommunication Union (ITU) and the World Health Organization (WHO), and includes partners such as BUPA and Verizon, as well as GlaxoSmithKline, Novartis and Sanofi. “This is a good example of the right stakeholders beginning to work more collaboratively towards the benefit of the overall healthcare eco-system rather than one part of it,” James insisted.
Building these relationships with all parts of the value chain, delivering a particular healthcare service around a particular condition, around individual patients with payers, is far more complex, far more risky. How you share risk and reward is very unclear and that’s a problem pharma has been struggling with.
Such programs certainly point the way. But James Barlow of Imperial College Business School warned that there are still huge gaps in how true partnership is going to work if pharma companies really are going to become healthcare providers. “Collaboration on development of new drugs is one thing and the pharma industry is beginning to get its act together – but collaboration around the delivery of healthcare services, moving much more into the provision of actual healthcare, is a wholly different matter,” he suggested. “Building these relationships with all parts of the value chain, delivering a particular healthcare service around a particular condition, around individual patients with payers, is far more complex, far more risky. How you share risk and reward is very unclear and that’s a problem pharma has been struggling with.”
Moving beyond the pill
In other words, it is all very well saying that pharma should move ‘beyond the pill’. “But how to get from where we are now to that particular model, is opaque,” Barlow concluded.
It may be that the regulatory processes of tomorrow will have to be fundamentally different to those we have now to help facilitate disruptive change – not least, for example, in terms of how much patent protection pharma companies can expect. Michel Goldman from the Université Libre de Bruxelles is in no doubt that the role of regulators will alter. “In the past they were thought of as being mainly there to protect patients, but they are now really partners in promoting therapeutic innovation,” he began. “Clinical trials will change rather dramatically in years to come, primarily through the actions of regulators: particularly in Europe, they are promoting adaptive licensing so that companies will get approval for a specific indication quite early in the process, with the condition that you will continue to explore other indications and safety questions. You can immediately see the value to stakeholders, including patients.”
Sharing data
Goldman highlighted one IMI project on schizophrenia that had included five competing pharma companies sharing all their data on trials, with the benefit that they had to enrol 40% fewer patients to demonstrate efficacy. “Collaboration might increase pharma’s productivity,” he pointed out.
At this point Paul Simms, eyeforpharma Chairman, posed a more general question to the panel. From his discussions with various delegates at Barcelona, he said that the one thing people wanted to change in pharma was the “fear inside our companies”. Many people in pharma believe that a culture of experimentation simply does not exist.
Feeling the fear
Michel Goldman suggested another area where pharma must look at its processes – in the gap between what is said by companies, and what they do. “What must change is the sense of disconnect between CEOs – who will tell you that innovation and open collaboration is the way to go – and those inside the company who have to implement this,” he said. “That’s where you feel the fear. But I’m optimistic because, at the top of companies, the willingness is there.”
Ceri James at McCann Complete Medical said this was also a challenge for agencies, where there was a great deal of expertise from people with scientific backgrounds in areas such as real-world evidence, regulatory writing, market access and medical communications. “But getting them to think about how we can combine our expertise to create new services for our clients and value for their customers is a challenge and leadership is definitely important,” he said. “You also need resources, processes and success measures alongside the softer measures like values, team behaviors and so on. People in pharma are comfortable with processes but are somewhat surprised when these can be applied to innovation thinking as well.”
Conservatism versus experimentation
However, pharma is not the only area which is bound by conservativism: experimentation also does not sit particularly well with the mindsets of doctors, health services and others in the health system, thinks James Barlow at Imperial College Business School. “You see that in the constant demand for more evidence around particular innovations,” he explained. “When you’re talking about eHealth innovation, tele-healthcare, remote monitoring, use of social media and so on, it’s totally inappropriate to do randomized controlled trials. But we see regulators and health providers not accepting the fact that there are 12,000 published studies in journals on tele-health – they still want more and more evidence. So this conservatism is on both sides.”
Jesus del Valle at Bayer concluded the panel discussion by saying that there was movement on this, with evidence of reimbursement for some digital health tools in Germany. “The more people understand what is out there in digital health, the easier it is going to be reimbursed,” he said. “Pharmaceutical companies should get in there. We should be involved in the conversation.”