“Brexit means Brexit”—but what will it mean for pharmaceutical market access?

On 23 June 2016, the UK electorate stunned politicians, pundits and business communities right around the world by voting to leave the European Union (EU). While the impact will naturally be greatest for the UK, the repercussions of the vote will be felt across Europe and beyond. In the weeks since the referendum, there have been countless assessments of the potential consequences of the UK’s decision to leave the EU. This three-part analysis focuses specifically on what Brexit will mean for pharmaceutical market access. Part 1 considers the current uncertainty surrounding the UK’s departure from the EU, the importance of the life sciences industry to the UK, and the importance of the UK to the international life sciences industry. Part 2 looks ahead to the potential consequences of Brexit both before and after the UK actually leaves the EU. Part 3 reflects on how the challenges associated with Brexit could be turned into opportunities.

The vote to leave the EU has created a business climate of unprecedented uncertainty

In the wake of the UK’s vote to leave the EU, Theresa May, the new British Prime Minister, has repeatedly declared that “Brexit means Brexit.” However, this supercially straightforward statement of intent belies an extraordinarily challenging series of decisions that must be made in the coming years. When will Article 50 of the Lisbon Treaty—the trigger for exit negotiations—be invoked? How long will it take to settle the terms of the exit? What kind of relationship will the UK have with the EU after Brexit—an associated country status, membership of the European Economic Area, a customs union, bilateral agreements, trade under the terms of the World Trade Organization, or some completely novel arrangement? Above all, to what extent (if any) will the UK retain access to the Single Market, and what obligations will it have to meet in return?

Given that the manufacture of prescription drugs is arguably the most heavily regulated industry of all, life sciences companies are perhaps more uneasy than most about the possibility of exchanging the familiar EU system for a potentially very uncertain environment within the UK. The Leave campaign’s promise of a much lighter regulatory burden for businesses outside the EU would be challenging to deliver within the pharmaceutical sector. Indeed, drug manufacturers worry that they might have to satisfy onerous regulatory requirements from both the EU and the UK. However, the life sciences industry is already highly globalized—companies are very accustomed to the challenges of meeting the needs of different markets around the world. In addition, pharmaceutical companies that are doing business in the UK can take comfort from the knowledge that demand for their products is unlikely to be affected by consumer uncertainty about the economy, given that all prescriptions in Scotland, Wales and Northern Ireland are free, and that 90% of prescriptions in England are dispensed free of charge.1

How important is the Life Sciences industry to the UK

In a speech delivered just hours before she was confirmed as the new Prime Minister, May spoke of the need to develop a strong industrial strategy to “defend a sector that is as important as pharmaceuticals is to Britain.”2 

These words went some way towards reassuring an industry that had been unsettled by the vote to leave the EU. Just a week later, however, May moved George Freeman, Minister for Life Sciences, to chair the Prime Minister’s Policy Board. The UK was unique in having a dedicated Minister for Life Sciences, an office that was considered to be a formal recognition of the crucial importance of the industry to the national economy. Many life sciences executives were concerned that Freeman would not be replaced, a decision that might weaken the industry’s position. On 4 August, the government announced a new division of ministerial responsibilities for the life sciences:

  • Within the Department of Health, two ministers will share responsibility for life sciences. Lord Prior of Brampton, Parliamentary Under Secretary of State for Health, will lead on the department’s life sciences industrial strategy, the Accelerated Access Review, “making a success of leaving the European Union,” and the biopharmaceutical and medical technology industries. Nicola Blackwood, Parliamentary Under Secretary of State for Public Health and Innovation, will lead on genomics, data and digital health, and emerging health technologies.
  •  Within the newly created Department for Business, Energy, and Industrial Strategy, Jo Johnson, the Minister of State for Universities and Science, will have responsibility for the department’s life sciences industrial strategy. He will also work with Greg Clark, the Secretary of State for Business, Energy, and Industrial Strategy, to “oversee the UK’s drive to lead the world in the new age of global science.”3

These appointments reaffirm the government’s commitment to promoting the life sciences sector as a key element of the UK’s industrial strategy.

UK-EU Life Sciences Transition Steering Group

The government has also expressed continued support for the recently formed UK-EU Life Sciences Transition Steering Group. Freeman had launched this initiative on 6 July and was due to co-chair it with Sir Andrew Witty, CEO of GlaxoSmithKline, and Pascal Soriot, CEO of AstraZeneca. A statement issued by the Association of the British Pharmaceutical Industry commented:

“At a time of great uncertainty for the pharmaceutical industry we are eager to see who will take up the responsibility of progressing the good work that Freeman has started. This should include the continuation of the UK-EU Life Sciences Transition Steering Group to address regulatory and funding issues facing the pharmaceutical and biotech sectors following Britain’s decision to leave the European Union, as well as initiatives including the much- anticipated Accelerated Access Review, which was set up to make the UK the best place in the world to discover, develop and deliver innovative medicines to patients.”4 

The government has yet to clarify who will assume Freeman’s role as a co-chair of the steering group.

The timetable for the steering group’s work is ambitious: it is due to present its final recommendations to the Ministerial Industry Strategy Group by early September. Teams will cover six distinct workstreams:

Source: Adapted from the UK-EU Life Sciences Transition Program Briefing (July 2016).5

How important is the UK to the Life Sciences industry?

Punching above its weight

IMS Health reports that prescription drug sales in the UK totaled $27.7 billion in 2015, making the UK the third-largest pharmaceutical market in Europe and the sixth-largest in the world. The UK accounts for 0.2–4.5% of total global sales among the world’s top 20 life sciences companies. However, the UK is a significant market for the launch of new chemical entities (NCEs): from 2010 through 2014, only the US and Germany had more NCE launches.6 

The UK is also an important location for the global headquarters of the top 40 life sciences companies, tied with Germany in third place, behind the US and Japan. Furthermore, the UK ranks in the top five countries globally in terms of both pharmaceutical R&D investment and headcount. In addition, the UK is arguably the world leader in health technology assessment and real-world data collection.

For all of these reasons, the UK matters to the life sciences industry, and companies are anxious to minimize any adverse consequences that may result from Brexit.

In Part 2 of this article we will look ahead to the potential consequences of Brexit both before and after the UK actually leaves the EU.


1 Prescriptions Dispensed in the Community, Statistics for England (2005–2015) 

2 Theresa May—2016 speech to launch leadership campaign

3 New ministers for life sciences

4 George Freeman promoted, leaving life science minister role in doubt 

UK-EU Life Sciences Transition Program Briefing (July 2016) 6 Brexit—what now for pharma?

Brexit—what now for pharma?

“Brexit means Brexit”—but what will it mean for pharmaceutical market access?

On 23 June 2016, the UK electorate stunned politicians, pundits and business communities right around the world by voting to leave the European Union (EU). While the impact will naturally be greatest for the UK, the repercussions of the vote will be felt across Europe and beyond. In the weeks since the referendum, there have been countless assessments of the potential consequences of the UK’s decision to leave the EU. This three-part analysis focuses specifically on what Brexit will mean for pharmaceutical market access. Part 1 considers the current uncertainty surrounding the UK’s departure from the EU, the importance of the life sciences industry to the UK, and the importance of the UK to the international life sciences industry. Part 2 looks ahead to the potential consequences of Brexit both before and after the UK actually leaves the EU. Part 3 reflects on how the challenges associated with Brexit could be turned into opportunities.


Pricing repercussions

The most immediate effect of the referendum outcome on market access has been the sharp depreciation of the pound sterling against the euro and the US dollar, as well as other currencies. As a result, imported medicines have become more expensive in the UK, while exports have become cheaper. Exchange rate movements also have potentially significant implications for parallel trade across Europe. Historically, the UK was always a substantial net parallel importer, but relatively low prices for many drugs in the UK have complicated patterns of parallel trade in recent years. The UK remains a net parallel importer of certain drug classes, but is conversely a significant source of parallel exports for some other drug classes.1 The recent sharp decline in the value of sterling is likely to boost the overall volume of parallel exports from the UK and curb demand for parallel imports. An additional concern is the risk of supply shortages of drugs that are subject to substantial parallel exportation.

Lower prices in the UK, relative to other countries, could also have significant repercussions for external reference pricing in the EU and beyond. The UK is a comparator country for more than 20 countries around the world, including 17 EU member states,2 Australia, Canada, Japan, Saudi Arabia, South Korea and Taiwan. Countries might cut their prices for certain drugs in line with the relative decline in UK prices, potentially triggering a domino effect that will also have an impact on countries that indirectly reference UK prices.

Potential for increased  financial pressure on the National Health Service (NHS)

A further consequence of the referendum outcome in the short term is an increased risk of a significant economic slowdown. The Bank of England reports “no clear evidence” of a slump in the first month following the referendum3, but the International Monetary Fund recently downgraded its forecasts for gross domestic product (GDP) growth in the UK from 1.9% to 1.7% in 2016, and from 2.2% to 1.3% in 2017.4 A recent Reuters survey of economists found a median 60% likelihood of recession in the coming year.5 A recession would inevitably increase financial pressure on all government departments, including the NHS, which recorded a £2.45 billion budget deficit in the 2015–16 financial year.6

Prescription drug spending would likely be a prime target for any economies that the government considered necessary.

Relocation of the European Medicines Agency (EMA)

Once Article 50 is triggered and the countdown to Brexit begins, the EU will almost certainly have to take a fairly urgent decision regarding the relocation of the EMA from London, which has been the organization’s home since its creation in 1995. There appears to be a clear consensus that the EMA could not remain based in a country that is no longer a member state of the EU. The loss of the EMA would arguably contribute to a perception that the UK was becoming a less attractive market for the life sciences industry.



Forecasting the consequences of Brexit in the years after the UK leaves the EU is fraught with uncertainty at this very early stage in the process. However, it is possible to identify some appreciable risks.

Promise of increased funding for the NHS

The campaign to leave the EU argued that the UK’s contributions to the EU could be better used to fund essential services at home: most notably, the official campaign bus was emblazoned with the slogan, “We send the EU £350 million a week—let’s fund our NHS instead.”7 The Remain campaign robustly and repeatedly challenged this figure, and warned that a likely contraction of the economy might actually lead to an overall reduction in spending on the NHS. It remains unclear how much of the money saved from EU contributions will be allocated to healthcare, and whether spending on prescription drugs might grow as a result of increased investment in the NHS.

Future regulatory environment

The long-term shape of the UK market access environment will depend, to a significant degree, on whether, or to what extent, the country retains access to the Single Market. If the UK negotiates a deal similar to the Norwegian model, based on membership of the European Economic Area (EEA), the degree of change that will be required of the life sciences industry could be relatively modest. Although the EMA would have relocated to an EU member state, the regulatory status quo might otherwise remain largely unchallenged.

If, however, the UK ends up outside the EEA, the future shape of the country’s market access environment will be much more uncertain – a prospect that worries the life sciences industry. In the worst-case scenario, the UK would have to establish a completely independent regulatory system, a development that could substantially increase the workload and costs for drug manufacturers. The industry is also concerned that the UK might not be covered by the EU Clinical Trials Regulation, which is expected to streamline access to trials across the EU when it begins operation in 2018. Furthermore, London is currently due to become the home of the new European Unified Patent Court’s pharmaceutical unit in autumn 2016. If the UK were to be excluded from all of these arrangements, it would probably become a significantly less attractive market for the international life sciences industry. As a result, the country might no longer be a priority market for multinationals: manufacturers might delay the introduction of new medicines in the UK, or even decide to forgo a UK launch of certain drugs altogether. Companies have already shown their willingness to avoid marketing their products in major markets that they consider are offering them unfavorable terms: 25 medicines have been withdrawn in Germany in response to pricing reforms introduced in that country in 2011.

Diminished international influence in health technology assessment

As noted earlier, the UK is generally considered a world leader in the field of health technology assessment, largely on account of the international reputation and influence of the National Institute for Health and Care Excellence and the Scottish Medicines Consortium. It remains to be seen, however, whether the UK will be in a position in the long term to play an active role in the work of the European Network for Health Technology Assessment (EUnetHTA), and whatever body succeeds it after 2020. In the absence of a UK contribution to international HTA collaboration, agencies from other EU member states would need to fill the breach.

Implications for parallel trade and external reference pricing

In the event that the UK leaves the Single Market, the legal basis for parallel trade with EU member states would presumably cease to apply. It would be interesting to see if EU countries that take account of UK prices for external reference pricing would continue to include the UK in their baskets of comparator countries.

In Part 3 of this article we will reflect on how the challenges associated with Brexit could be turned into opportunities.


1 Parallel trade: Which factors determine the flow of goods in Europe?

2 Study on enhanced cross-country coordination in the area of pharmaceutical product pricing

3 Business as usual: Bank reports no slump

4 Uncertainty in the aftermath of the UK referendum

5 British slide into recession to force BoE’s hand next month – Reuters poll

6 Deficits in the NHS 2016

7 EU referendum: Statistics regulator loses patience with Leave campaign over ‘£350m a week’ EU cost figure


a-connect addresses Pharma Stakeholders at the World Pharma Pricing & Market Access Congress 2016


a-connect attended the World Pharma Pricing and Market Access Congress 2016, held in London on 24–25th February. Representing a-connect were Claire Hempshall (P&MA Lead), Zornitsa Petrova (P&MA Director), Aunia Grogan (Global Head of Life Sciences) and Romjan Ali (Independent Professional). The conference was well attended by global industry stakeholders, including payers, pharmaceutical companies and pharmaceutical consultancies, many of whom visited the a-connect booth. On the first day of the conference, Aunia Grogan presented a paper entitled ‘Establishing and Maintaining Access in an Evolving Environment’.

Summary of Aunia Grogan’s paper

In order to achieve continued growth in a changing environment, the pharmaceutical industry must tackle a number of core questions and challenges.

What are the key challenges the pharma industry is facing?

Over the last decade, we have seen a number of important evolutions in the industry:

  • Market dynamics: increasing importance of emerging markets, increased use of stacked or combination therapies, increased use of generics and biosimilars, shift to personalised medicine.
  • Industry structure: greater regulatory hurdles, increased role of the payer, emergence of risk sharing/patient access schemes.
  • Product mix and provision of care: move from primary to secondary care, focus on orphan indications, focus on new technologies (e.g. gene therapies), standardisation of treatment pathways.
  • New science and technologies: increased capture of patient data, availability of the cloud, proliferation of social media, growth of mobile applications for smartphones.

How is the industry responding?

The end of the blockbuster era has created tremendous pressure on the industry to maximise value from its assets, and this requires a launch model which delivers both speed and quality of execution. The industry is exploring numerous avenues to achieving this: i) enhancing launch planning, ii) implementing launch academies, iii) introducing a project management office (PMO), iv) developing personalised healthcare capabilities, and v) expanding evidence generation (health economics and real-world evidence).

What does this mean for P&MA?

The evolving operating model has had a huge impact on the P&MA team. More is expected of the P&MA team—greater knowledge, increased technical expertise and enhanced business skills—despite there being fewer resources overall and a need to ‘do more for less’.

What do you mean by ‘knowledge’?

The P&MA team are now expected to know about a greater number of emerging markets, all lifecycle stages and funding routes that would not have been explored in the past.

What do you mean by ‘technical expertise’?

The P&MA team must understand complicated science and complex evidence, develop sophisticated argumentation and tools, and create and execute intricate agreements.

What do you mean by ‘business skills’?

The P&MA team needs strong problem-solving and time-management skills and the ability to work within multi-disciplinary teams in order to effectively support the business.

Are we ready to meet these challenges?

The following questions will help you determine whether your team is ready:

  • How well integrated is your P&MA team with other teams across the business?
  • Are you involved early enough in commercial decision making?
  • How effective is the team in influencing internal and external stakeholders? Are you able to ‘manage up’ and effect necessary changes in the organisation?
  • Do you have skills gaps around specific markets, technologies or services?
  • How well equipped are you to deal with spikes in demand?

Key learnings from the conference

There is no end in sight to the pressure on the pharmaceutical industry to justify prices in an environment of constrained public healthcare budgets and a patient- and media-driven backlash against perceived unjustifiably high prices. The industry must communicate value in terms that are understandable and relevant to all stakeholders, regardless of their role and drivers. The challenge is that there continues to be no common approach to assessing and determining the value of drugs. This is unlikely to change in the near future, despite ongoing efforts to develop a consistent approach by the European Network for Health Technology Assessment (EUnetHTA), among others.

Disruptive healthcare technologies (such as ‘cures’) create huge challenges for payers who are constrained by short-term budget pressures. Adaptive pathways and early access schemes mean there is limited evidence on which to assess value. Affordability is a big challenge because there is often a change in payment terms (i.e. costs previously spread over many years are now condensed into weeks or months). In addition, current P&MA systems limit the opportunity to move away from a ‘price per pill’ mind-set—a move that could help improve affordability for payers.


About a-connect, the human resourcefulness enterprise

At a-connect, we help leading global businesses confront the future by increasing the pace and impact of their critical projects. With our unrivalled global network of experienced independent professionals, we create winning teams with the perfect combination of skills, experiences and qualities, to supplement your internal team and to provide you with a consulting service that is more thoughtful, individual, imaginative and enterprising. This is what we call human resourcefulness.

For more information on how our team of Life Sciences and P&MA experts can help you prepare to confront key industry challenges, please email us at info@a-connect.com or visit www.a-connect.com.

Personalised healthcare – a new age in drug development

Personalised healthcare (PHC), a tailored approach to treatment based on the molecular analysis of genes, proteins and metabolites, has been a hot topic for many years, having been heralded by early successes with drugs like Herceptin for breast cancer (Roche, 1998) and Xalkori for non-small cell lung cancer (Pfizer, 2012). Scientists now have a greater understanding of disease heterogeneity; we know that breast cancer is not one, but many different diseases, and that HER2-positive breast cancer is an aggressive form caused by the overly active HER2 protein in cells.

While oncology is by far the most advanced area of PHC, breakthroughs in other areas, such as immunology, central nervous system, infectious and cardiovascular diseases have also been seen. We believe that PHC is now poised to become a mainstream activity as four big trends converge:

  1. Advances in genomic science and next-generation gene sequencing, resulting in a better understanding of disease pathways and heterogeneity. We can now identify many genetic mutations and their associated diseases at a much lower cost and with greater speed.
  2. Increasingly sophisticated diagnostics for screening and risk identification, as well as drug toxicity/safety profiling. Diagnostic tests and biomarker information are key components of PHC, as they are used to identify and predict how well a patient will respond to a particular medication. This enables physicians to determine the best dosage and treatment regimen. Tests can also identify patients who will not benefit from a treatment, thus reducing drug wastage,[1] non-compliance (which leads to adverse health effects, especially for chronic conditions), and healthcare costs. Pharmaceutical companies will be able to identify and eliminate that ‘one in a million’ serious adverse event that can knock an approved product off the market.
  3. Convergence of digital technology and healthcare, creating greater precision and transparency in modern medicine. Many patients are actively using health apps to measure basic functions such as heart rate and physical activity. Similar technologies have the potential to collect more sophisticated clinical information that could help patients and physicians manage diseases like diabetes or assist pharma in running clinical trials.
  4. Cost containment pressures within the healthcare system, forcing regulators and payers to demand that all novel treatments are cost-effective. PHC promises optimized use of resources in healthcare through better compliance and fewer unnecessary treatments/side effects and associated costs.


Implications for life sciences companies


Literature shows that one third of FDA drug approvals in 2013 were already linked to a companion diagnostic approach and ca. 600 industry-sponsored trials with a companion diagnostic element are currently taking place. This is testament to the fact that targeted drugs can, in theory, command premium prices through superior clinical outcomes and a faster time to market.

However, PHC has significant implications for the pharma business model; while new drug stratification regimes will reduce the market size of some drugs, biomarker testing will identify new patients for other drugs (e.g. gefitinib was originally prescribed for non-small cell lung cancer, but has now been shown to be effective against many cancers). This approach has the potential to improve sales and profits through a new business model, yielding differentiated products for segmented populations.


Key challenges in personalised medicine


Not surprisingly, this new model presents challenges for the traditional pharma model, both commercially and in R&D. R&D teams must now:

  • Understand disease pathways for complex conditions such as cancer and dementia;
  • Identify the correct patient cohort, obtaining the right tissue samples and accurately monitoring these samples throughout the clinical trial duration; and
  • Understand how to use advanced analytics for data analysis so that population-wide disease patterns and trends can be determined and utilized in personalised treatments.

Commercially, teams have to:

  • Understand the regulatory and reimbursement environment, which is complex, poorly defined for drugs versus diagnostics, and lacking in standardization across geographies; and
  • Educate physicians on new technologies, approaches and therapies to adopt and remain abreast of these as they continue to advance.


Harnessing potential


Many are already taking significant steps to address these challenges and harness the potential of PHC.

Diuretics, a UK-based research firm, analysed the PHC efforts of numerous pharmaceutical companies to determine which ones are best positioned for the new biomarker-driven world. It is evident that the industry is very active in this area, but it is less clear who will succeed in the long term.

FiercePharmaMarketing [1] reported the results of Diuretics’ study. The key industry players and their latest achievements are summarized below:

Roche has been very active in developing medicines specifically for the patient subgroup with a high amount of HER2. Their treatments target HER2, kill these cancer cells and decrease the risk of recurrence. Roche has the advantages of an integrated diagnostics division and a strong pipeline; approximately 60% of their late-stage compounds are being co-developed with a companion diagnostic test to help personalise treatment. In 2015, Roche acquired a majority stake in Cambridge, MA-based Foundation Medicine (FMI), which provides genomic analysis to pair cancer patients with appropriate treatments and trials.

Novartis has a molecular diagnostics unit integrated within the Novartis Pharma Division, which focuses on innovative companion diagnostics and biomarker tests. So, while many international pharmaceutical companies are working to bring companion diagnostics to the market alongside targeted therapies, Novartis aspires to be a world leader in molecular diagnostics, which is a key element of PHC.

AstraZeneca (AZ) is now a major contender in this space, despite having started out as a ‘dark horse’. Having successfully fended off Pfizer’s advances, AZ is delivering on its claims of a strong product pipeline. In November 2015, the FDA approved Tagrisso, a new lung cancer treatment, in record time. Tagrisso is aimed at a subset of lung cancer patients whose tumours have spread and developed a treatment-resistant mutation (AZ worked with Roche Diagnostics to develop the test for the mutant genes). This represents a very small but well-defined group of patients, which helped AZ speed up clinical trial completion.

Tagrisso is the second targeted oncology drug launched by AZ with a companion diagnostic in less than one year following the approval of Lynparza for ovarian cancer.

PHC is key to AZ’s turn-around efforts, as many of its blockbusters approach LOE (e.g. Nexium, Crestor). Half of the drugs they expect to launch by 2020 will come from companion diagnostics and 80% of the current drugs in its R&D pipeline are personalised.

AZ recently acquired (for $150 million) Definiens, a German company specializing in tissue-based biomarker tests. AZ does not intend to build a diagnostics business in house to match that of Roche, but will ‘cherry pick’ different ‘best in class’ diagnostic partners for different drugs. Many may be surprised that AZ is so well advanced in this space.

The remaining companies are best described as ‘ followers‘ – they have demonstrated solid work in PHC, but are less prepared for a transformational shift.

Pfizer is focusing on targeted lung cancer treatments for UK patients through its partnership with Cancer Research UK and AZ.

GlaxoSmithKline has partnered with GE Healthcare to improve treatment for metastatic melanoma, the most deadly form of skin cancer. Clarient Diagnostic Services, an affiliate of GE Healthcare, will support diagnostic laboratories to develop a standardized and uniform approach to testing cancer patients. This is very important, as there is currently no standard in diagnostic testing.

Merck secured approval for Keytruda to treat non-small cell lung cancer in October 2015. The drug treats only 20% of the patient population, which is a very small market. However, its cost effectiveness has earned it a huge $12,500/month price tag.

Shire has recently acquired Baxalta to consolidate its position in the orphan drugs market across multiple therapeutic segments, including gastroenterology. Orphan drug clinical trials are now adopting genetic biomarkers and clinical endpoints, which is a major step towards PHC.[2]

PHC is a rapidly evolving space. In forthcoming articles, we will look more closely at the clinical and commercial challenges and debate and discuss the potential solutions facing the various stakeholders.

For more information on how to harness the benefits of PHC at your organisation, contact us at a-connect.


[1] FiercePharmaMarketing, November 26, 2014, “Who are the stars of personalised medicine?”


[1] Many of today’s available drugs are effective in only 30–60% of treated individuals.

[2] The orphan drugs market is very attractive, being worth $100+ billion and having a CAGR of 12%, which is almost twice that of the general drugs market. Of the top 10 projected best-selling drugs worldwide in 2015, almost seven had orphan status. The regulatory environment is more favourable and 2014 was a record year for FDA/EU/Japan orphan designations.

Pricing and Market Access – People Skills

Amongst tremendous pressure on the healthcare system – from squeezed budgets and shifting market trends to new therapy areas – establishing and maintaining access to drugs in this evolving environment is critical. Seismic change is underway across the board.

The pharmaceutical industry has faced a prolonged period of disruption. Market dynamics have radically altered, with emerging markets accounting for a growing share of revenues – generic players are now an important part of the competitive mix. There has also been a shift from small molecules to biologics and then to biosimilars; and last, but not least, changes in the role of the patient as costs rise, and a focus on convenience and personalised care develops.

The industry structure is also rapidly evolving – in part as a response to the market dynamics, and in part as a driver of them. Heightened regulatory standards have been accompanied by changes in the stakeholders who influence prescription decision-making, not least the very different role that payers are now playing. One consequence of this increased influence has been more innovation in payment mechanisms, with the emergence of shared saving and risk models.

This has also affected the product mix and provision of care landscape. As understanding of diseases and optimal treatment has evolved, there has been a transition from single drugs to various combinations and to more integrated treatments across a wider range of points of care. New sciences and technologies are constantly expanding the knowledge of disease progression. Disease management and treatment options are, in many therapy areas, in an unparalleled state of change.

Future Outlook

As these disruptive influences continue to play out, healthcare systems look significantly different today to how they appeared in 2000. How might they look in 2030?

Healthcare systems built around infectious diseases are re-engineering to deal with the chronic care tsunami
The economic basis for many systems continues to move from activity to value, and from input to output. This is being accompanied by a significant system reform
The role of the patient is fundamentally changing from passive recipient to active participant
There is a real and meaningful opportunity for ‘connected health’ across the system and, at a patient level, an opportunity that may well transition to a requirement
New commercial models are emerging, from traditional players to new entrants – both in anticipation of and in response to the change

Maximising Current Asset Value

Notwithstanding all these changes and the fundamental impact they have on the traditional pharma model, shareholder expectations need to be managed and continued growth secured during this challenging time. In light of this, pharma companies must strive to optimise performance both during and post-launch, as part of efforts across the board to maximise the value of every asset.

The established launch business model still holds good – shape the product; shape the market; shape the organisation. There is, however, enormous pressure to improve the speed and quality of execution. At the same time, evolutions in science and technology mean a drug is increasingly not ‘just a pill’, but a ‘healthcare solution’ that must be launched and marketed. As a consequence of heightened competition, shortened timelines and a greater demand for evidence in all its various forms, we have seen increasingly complex launches, with multiple moving parts to coordinate within and across assets. New competencies and functional capabilities are required to meet the internal and external demands of these launches – but all this occurs in the context of fewer resources overall, as margin pressures and a greater number of launches result in teams being told to ‘do more with less’.

Improving Launches

The industry has responded to this by pursuing a number of refinements to the established launch model, with the aim of improving performance before and after a launch. Four of these approaches have taken hold:

Enhanced Launch Planning 
Focusing on systematically identifying and capturing learnings from previous launches, and building the people and processes needed to enhance capabilities for future ones, this refinement places emphasis on the manoeuvrability of the organisation and makes heavy use of war gaming and scenario planning.

Centres of Excellence 
Similarly, companies are investing in ‘centres of excellence’ or ‘launch academies’ to instil launch capabilities within the organisation and codify learnings. This is a pragmatic response to an all too common situation: the launch team will try to recruit people with experience in the therapeutic area and launch activity, but in practice, then end up having to work with people who have an understanding of the therapeutic area but have not yet conducted a launch, or vice versa. Introducing ‘centres of excellence’ facilitates knowledge-sharing and ensures you have a better prepared, higher impact team.

Creating a Project Management Office 
Recognising the increasing complexity of a launch, clients are either building or buying in professional project management expertise to run an office. This is not intended to be a box-ticking exercise, but rather a way of navigating the complexity by improving execution, and addressing any miscommunications or breakdowns that commonly occur at critical interfaces.

Building New Capabilities
In response to payer demand for robust demonstrations of value, pharma companies have expanded teams beyond the traditional pricing and market access (P&MA) skillsets to build the broader capabilities required to demonstrate value in a more holistic way. The industry has seen a huge growth in real world evidence capabilities, either internally or outside the business in the form of an external work bench. Personalised healthcare is also driving significant change, from R&D through to commercial teams. In response, clients are taking steps to prepare by starting to build capabilities to create value stories beyond pill offerings.

Implications For P&MA Teams

The evolving operating model has had a huge impact on the P&MA team. More is expected of them – greater knowledge, increased technical expertise and enhanced business skills – despite there being tremendous resource constraints.

The breadth of knowledge P&MA teams are now expected to provide to support launches is much wider than before, as these involve a greater number of emerging markets, lifecycle stages and funding routes that would not have been explored in the past. Unsurprisingly, there is often less in-house knowledge and the information is not easily accessible. Furthermore, greater variation in market scope, stage and funding routes across assets result in a lack of standard approaches, greater uncertainty and fewer cross-product learnings and synergies. Despite this, such knowledge unlocks the potential for closer payer collaboration, more creative P&MA strategies and the opportunity to secure revenues that would previously have been ‘left on the shelf’.

Technical Expertise 
P&MA team members are called upon to understand increasingly complex science and evidence, develop sophisticated argumentation and tools, and create and execute arguably more intricate agreements. This can place pressure on the team as few individuals traditionally would have had the opportunity to build the technical knowledge to meet these demands. Heightened communication skills are often needed to effectively explain complex concepts within and outside the organisation. Those individuals that are able to meet these needs are in huge demand, and so the P&MA team faces the additional challenge of brain drain into other functions, companies and industries. For the individual, however, it allows them to expand beyond traditional skill sets and provides wider opportunities for career progression.

Business Skills 
As the role of P&MA in launch teams has steadily become more important, team members that reinforce their business skills to complement this technically demanding work have more impact and value. Specifically, there is a greater emphasis on problem-solving abilities, and as international, multi-disciplinary teams (sometimes with external organisations) become the norm, first-class collaboration and interpersonal skills are increasingly in demand. Team members must also be able to work within a context of progressively greater time pressures and workloads. The individual that meets these demands can develop transferable skills that are highly valued by the business, and can thus quickly progress through the organisation.

Addressing Demands

Building and integrating the right P&MA team is critical for the pharma industry to address many of the demands it faces. Individuals must have the necessary knowledge, technical expertise and business skills to cope with changes in customers, competitors, science and technology. P&MA leaders are looking outside of the traditional talent pool to find the right people. Additionally, they must be prepared for these individuals to develop their skill sets before moving into new roles in order to continue their professional development and career progression.

The team must also integrate with other functions in the business, and provide the necessary input to ensure P&MA needs are met at key decision points throughout the development process, during and after launch. P&MA should be involved in these teams early on in product development to ensure clinical development programmes address the requirements of the payer, and commercial decisions reflect the critical role that P&MA potential will play in determining the ultimate value of the asset. These multi-functional teams should be prepared to halt and/or divest assets, which are not considered commercially attractive on the basis of P&MA input.

Finally, the team must be equipped to deal with spikes in demand, as the industry increasingly looks externally to augment their pipeline. New products must be assessed urgently for commercial attractiveness and then, if acquired, must be subject to the same rigorous development, launch and post-launch processes as inhouse assets. It may be necessary to seek support outside of the business to do this.

On the Road to Success 

The need for talent acquisition, development and retention is not a new item on the pharma leadership agenda. For P&MA leads, a higher bar for impact – and the changes in the profile of people required as a result – has pushed this higher up their list of priorities. Building a highly qualified, flexible and agile group is now a cornerstone for success.

This article is taken from European Pharmaceutical Contractor May 2016, pages 17-19. © Samedan Ltd

Transitioning to Personalised Healthcare: Understanding the key scientific and practical challenges

In the previous article, we discussed four key trends shaping the Personalised Healthcare (PHC) model and how the profile of a patient’s genetic variation could be used to tailor drug treatments.

We already know that many conditions such as heart disease, cancer and Alzheimer’s are heterogeneous diseases that come in several clinical and histological forms. They are caused by a combination of genetic, lifestyle and environmental factors.

These complex diseases are often chronic and impose a huge cost burden on our healthcare system. While PHC, more accurately known as precision medicine (PMx), aspires to provide tools to better manage them, the scientific and practical hurdles that researchers, healthcare professionals and patients must overcome to “get there” is no mean feat. For many pharmaceutical companies, PMx means changing established practices in all aspects of the business—from the earliest stages of target identification and drug discovery, through to clinical development, regulatory approval, commercial development and operations, and sales and marketing.

However, many experts believe that we have now “reached a critical time to invest in innovation due to new technologies reaching an intersection of speed and precision and our unprecedented ability to target incurable diseases” [1]. This has been exemplified by the US National Institute for Health’s $2-billion budget increase for 2016—a sign of the growing importance of R&D [1].

This article will focus on some of the R&D challenges as organisations transition from the traditional blockbuster business model to the newer, PMx-based approach.

Finding the key factors of disease progression

At the earliest stage of drug discovery, scientists must identify genetically based drivers of the disease and determine “which target molecules to test for”. Consider cancer: solid tumours may contain tens, even hundreds of different genetic mutations. However, only some of these driver mutations are actually responsible for tumour growth and disease progression. The others, secondary mutations, are not directly associated with disease progression, but are abnormalities that accumulate with tumour growth. Scientists are interested in finding the drivers and then developing drugs that block these targets. Genomic tests can then identify and treat patients with those driver mutations.

However, at the moment, PMx is not quite as precise as that. Cancer cells have many different mutations; to decipher driver mutations from secondary mutations on a patient-by-patient basis is very complex. So far, scientists have only identified about 50 genetic mutations known to drive cancer [2]. There are thought to be hundreds of unidentified mutations, though. Consequently, genetic tests of tumours incorrectly show that there is no mutation known to cause the cancer. Worse still, even if a cancer-driving mutation is found, doctors cannot treat it because a drug does not exist or may only be approved for a different kind of cancer.

Although there are hundreds of experimental drugs in clinical trials that are designed to target specific driver mutations, we cannot be totally sure that the experimental treatment in question will even work in a particular patient. There are success cases like Vemurafenib, designed to target cancers linked to the faulty BRAF gene, but in other cases, such as BRAF mutant bowel cancer, treatments may only work in the laboratory or in only a minority of patients.

Therefore, different genetic mutations offer different levels of certainty when offering targeted therapy, indicating the need for an internationally agreed categorisation system. It would be helpful to know that, for a given genetic mutation, sufficient evidence exists that a specific experimental treatment will work and therefore merits clinical trials. This would save precious time, resources and money.

Biomarkers and Companion Diagnostics

However, before clinical trials can even commence, scientists must discover and develop biomarkers early in the drug discovery process (ideally at lead identification stage) and effectively translate pre-clinical models into clinical ones. The development of biomarkers to stratify diseases into better-understood, molecularly characterised subtypes requires access to well-defined patient populations and biological samples, together with longitudinal clinical data and medical and treatment histories.

Nowadays, scientists are trying to develop new drugs concurrently with biomarkers and Companion Diagnostics (CDx). Historically, CDx was a very different business from pharmaceuticals, with far lower profit margins, rendering it unattractive to drug companies. Diagnostic tests were only being used after drug development to rescue or increase drug value.

Under the current R&D model, researchers identify target patient subgroups using genetic tests and biomarkers in advance and then design drugs for these specific populations*.

The pairing of diagnosis and therapy will deliver improved R&D productivity, since the patient subgroups that will benefit from the drug will have been pre-selected before clinical trials. We would expect a better average response rate for drugs, currently 50% across all categories and just 22% in oncology [2]. This improvement, in cancer alone, would more than compensate for the cost of diagnostic technology, as shown in the case study below.

Changes to the clinical trial process

The clinical trial process is also changing to accommodate the new PMx era. In the past, clinical trials of cancer drugs were conducted by grouping patients according to cancer location, e.g. breast, lung or colon. Today, we know that cancers with the same driver mutation(s), irrespective of where they are in the body, share commonalities. Therefore, treatments are now being conducted on patients with the same cancerous mutations in different parts of the body. This means physicians need to take account of both the location and the mutation when selecting a treatment.

New types of clinical trials, such as adaptive clinical trials, have also been developed to reduce trial cost and shorten drug approval times. Adaptive clinical trials allow researchers to modify study parameters (e.g. dosing, sample size and schedule) according to accumulated data at prospective interim time points. This provides the best clinical outcomes.

Although the benefits of a more flexible, adaptive clinical trial are obvious, there are also practical challenges; for example, the number of treatment doses in the adaptive dose-finding stage can be significantly more than traditional clinical trials. This scenario, with its potential treatment variability and immediate response to the adaptive changes, can inherently increase the quantities of study drug needed.

As PMx advances in the oncology space, one of the most significant challenges arising is the lack of high-volume tissue samples. It is important to study tissue samples as a starting point for disease diagnosis, but also to understand what changes occur in the patient’s tissues during the course of a treatment. Scientists need to analyse individual’s tissue samples before, during and after treatment in order to plot treatment response and reaction variations across patients with the same disease type. This requires multiple samples from a given patient (which are large enough to understand the disease) and samples from many patients. Therefore, a better access protocol to well-characterised tissue samples of high quality is paramount.

Next steps and combination therapy

In oncology, patients are more likely to benefit from combination therapy—the treatment of multiple mutations simultaneously in order to stop tumour progression from the start of treatment. Ideally, if we know that a patient will benefit from combination therapy as opposed to monotherapy, the patient can avoid trying out various drugs unsuccessfully while the cancer continues to progress. However, identifying and validating combination drug therapies is very complex and the current clinical trial process is not set up for such testing, but rather for studying drugs individually and in comparison. Therefore, the current regulatory and drug approval system must adapt to support simultaneous testing of multiple drugs.

Finally, PMx is only possible because of the speed with which we can now sequence the human genome. The plethora of data generated from genetic tests and clinical trials requires sophisticated technology platforms to store and intelligently analyse the data to draw meaningful real world conclusions.

Education is also critical. Most physicians are unable to interpret genetic test results and, therefore, do not request that patients have these conducted in the first place. Patients need to understand how genes play a role in disease and the benefits of genetic testing. Pharmaceutical companies, payers and insurance companies need to acknowledge the importance of biomarkers and diagnostics so that they can support discovery of treatments that work.

In the next article, we will focus on the business challenges associated with PMx, in particular, the changes in the regulatory and reimbursement landscape to enable advancement of PMx.

Case study: PMx creates value

Better targeting allows physicians to begin effective treatment earlier while avoiding costly treatments that offer little value, and often come with side effects.

Today’s targeted approach to cancer care is redefining traditional treatment patterns; we no longer want to do everything that might help a patient, but rather, we should do exactly what the patient needs, based on the unique molecular profile of his/her disease.

By pairing diagnostics with specific drugs, pharma companies can offer more value to all parties; patients receive the “correct” treatment, hospital costs are reduced, clinical trials show greater success, and the reduction in adverse events decreases nasty lawsuits. The potential savings to the system are huge.

Consider Herceptin: the drug costs $79,181 per patient when a diagnostic is not used. But when it is used only with patients who will respond, the cost drops to $53,738—a difference of $25,443. Consider all the drugs that failed approval after clinical trials because they did not show efficacy in enough patients. If it were possible to find the gene expression and molecular pathway of the subgroup of patients that responded, those “failed” drugs could potentially be resurrected and even save many lives. This approach of testing for precision with diagnostics costs more initially—which is probably why it is not already being used widely. But pharma companies need to stop thinking about the short term, and begin considering how they can better pair a diagnostic with a drug in order to succeed in the long term.


[1] Joe Jimenez, CEO, Novartis, 22 March 2016, “A Critical Time to Invest in Innovation”.
[2] Popular Science, 27 August 2015, “Everything You Need to Know About Precision Medicine”.

 *This process has been held back somewhat by cost; the first human genome sequence cost $3 billion and took many years to completely map. Today, costs are decreasing and the effectiveness is rising exponentially. Several companies offer personal genome sequencing for a few thousand dollars or less; within 10 years, there is an expectation that sequencing a personal genome will take only an hour and cost a few hundred dollars, or less than an MRI.



“Brexit means Brexit”—but what will it mean for pharmaceutical market access?

On 23 June 2016, the UK electorate stunned politicians, pundits and business communities right around the world by voting to leave the European Union (EU). While the impact will naturally be greatest for the UK, the repercussions of the vote will be felt across Europe and beyond. In the weeks since the referendum, there have been countless assessments of the potential consequences of the UK’s decision to leave the EU. This three-part analysis focuses specifically on what Brexit will mean for pharmaceutical market access. Part 1 considers the current uncertainty surrounding the UK’s departure from the EU, the importance of the life sciences industry to the UK, and the importance of the UK to the international life sciences industry. Part 2 looks ahead to the potential consequences of Brexit both before and after the UK actually leaves the EU. Part 3 reflects on how the challenges associated with Brexit could be turned into opportunities.


An uncertain outlook, even without Brexit

Even if the outcome of the referendum had been to remain in the EU, the UK pharmaceutical market would have faced exceptionally challenging times in the coming years. This is because:

  • The NHS is struggling to meet growing demand for its services: the House of Commons Select Committee on Health recently described the scale of the funding challenge as “colossal.”1
  • The Accelerated Access Review, which is scheduled to publish its final report in September, is expected to recommend new, flexible methods of pricing and reimbursement, including price–volume agreements, multi-year outcomes-related agreements, patient cost caps and free or discounted treatment initiation, as well as measures to encourage local drug and therapeutics committees to pursue medicine optimization and cost reduction.2
  • NHS England is implementing a prioritization framework for specialized services to review the status of approximately 80 drugs over the next year.3
  • The reformed Cancer Drugs Fund will require all new oncology drugs to undergo a pre-launch assessment by the National Institute for Health and Care Excellence (NICE); manufacturers of drugs covered by the £340 million fund will have two years to gather real-world evidence of effectiveness and cost-effectiveness as a condition of general NHS reimbursement in England.4
  • To minimize the amount of HTA activity at a local level, drugs that are not appraised by NICE will in future be evaluated by one of four new regional medicines optimization committees on behalf of the NHS in England.5
  • Fifty vanguard sites have been established to explore the potential of new models of care, including integrated primary and acute care, multi-specialty community providers and acute care collaborations.6

These reforms, alongside the changes that may accompany Brexit, could deter companies from doing business in the UK. Alternatively, the life sciences industry could see the forthcoming period of unprecedented change as an opportunity to engage with the government to help shape the future evolution of the NHS in general, and the UK pharmaceutical market in particular.

Urgent need for the life sciences industry to set out its stall

One of the highest priorities will surely be to make a strong case to the government for the regulatory environment life sciences companies will need in the UK, not just for the benefit of their own businesses and the national economy, but also to ensure that patients are not denied timely access to innovative medicines. The UK-EU Life Sciences Transition Steering Group will play a crucial role in communicating the industry’s needs and aspirations.

The negotiations with the EU will be central to defining how medicines are regulated in the UK in the coming decades, but national policy will also be a major factor in shaping the regulatory environment. Sir Andrew Witty, CEO of GlaxoSmithKline, has posed the following question: “To what extent are we prepared to give up being a rule shaper in a space that we’ve dominated historically as a country? … If we remain engaged, it really needs to be on the terms of us having a strong voice at the table on the rule set.”7

Faced with an uncertain future, this may be an opportune time to undertake a publicity campaign to highlight the life sciences industry’s importance to the economy and to the healthcare system.

Capitalize on the Accelerated Access Review

The expected publication of the final report of the Accelerated Access Review this autumn will require the industry to respond promptly, in order to ensure that recommendations intended to improve access to medicines are widely disseminated and, most importantly, effectively implemented. Drug manufacturers might also have to embrace new pricing and reimbursement arrangements for some new medicines.

Manage the impact of the Pharmaceutical Price Regulation Scheme (PPRS)

It is likely that the vast majority of branded drugs on the UK market will continue to be priced under the terms of the PPRS, until at least the end of 2018, when the current contract expires. Given that the government will be preoccupied with Brexit negotiations for at least the next couple of years, a radical overhaul of the UK pricing system for branded medicines in 2019 seems unlikely. Nevertheless, the industry needs to begin planning now—taking full account of the implications of Brexit—for negotiations with the government regarding the arrangements that will replace the existing PPRS.

In the meantime, the PPRS will require manufacturers to pay rebates if NHS spending on branded medicines exceeds specified growth limits each quarter: as of March 2016, the cumulative total for these payments amounted to £1.296 billion.8 The industry might consider lobbying for the government to allocate the money from rebates to a fund to cover the reimbursement of innovative drugs.

Seek opportunities for closer collaboration with the NHS 

Forthcoming changes to the organization of the NHS present opportunities for life sciences companies to forge new partnerships within the healthcare system. The move towards accountable care, the integration of healthcare and social care, and the increased focus on outcomes all call for drug manufacturers to reinvent themselves—focusing on delivering healthcare solutions, rather than simply selling pills. Pharmaceutical companies can play a valuable role in providing a range of support services to the NHS. Experience gained in the UK could be exported to other countries.

Promote the value of innovative medicines and a successful life sciences sector

In the long term, the life sciences industry in the UK will need to address what ‘value’ really means within a changing healthcare environment. A key element of this challenge will be to promote a wider societal perspective on the evaluation of medicines. Pharmaceutical companies must also work with the NHS to recognize long-term value—looking beyond the horizon of the current financial year. Above all, the industry must broaden the debate around value, moving from a narrow focus on cost to take full account of the benefits innovative medicines—as well as a flourishing research-based life sciences sector—will bring the UK in the coming decades.


Spending review does not meet funding commitment for NHS’s vision

Accelerated Access Review: Interim report

Investing in specialized services

NHS England approves Cancer Drugs Fund plans

5 Regional medicines optimization committees—workshop outputs from 20 April 2016

New care models—vanguard sites

GSK says Britain is still an attractive place to invest

UK pharma contributes £1.3bn to NHS meds bill


Insights from Supporting Clients with their Innovation Agenda

At a-connect, we work with clients across a range of industries on their innovation agendas. We are always intrigued by the diverse challenges clients face when driving innovation – such as driving impact, achieving cross-company traction and collaboration, and finding the right balance between ideation and processes. Here, we highlight a couple of recent innovation-related projects we have been involved in, and the important takeaways.

Case Study 1: Helping a client revisit their innovation processes to develop strategic foresight

One of our clients – a leading global flavors and fragrances manufacturer – asked a-connect for support in revisiting their regional innovation process. The goal was to optimize the process so as to allow the organization to leverage market insights, sparking innovation that could respond to upcoming consumer trends.

With this goal in mind, a-connect prepared and facilitated a workshop with the regional Innovation Council, which was structured into sessions that triggered the team’s thinking around consumer trends and helped the group bring critical issues around the existing innovation process to the table. During the workshop, the team worked on best practice proposals that would allow the organization to develop strategic foresight around key market trends, with a clear protocol for how to leverage this foresight for new product development and commercialization. In parallel, the group revisited roles and responsibilities within the innovation process, so as to optimize the organizational setup.

Based on the workshop results, the client was able to form task force teams and create roadmaps to formalize and roll out the improved innovation process. Roles and governance were clarified, and the Innovation Council developed a mission statement to drive the innovation efforts going forward.

Case Study 2: Supporting a biopharma client in driving innovation 

We supported one of our biopharma clients in their objective to fuel innovation around their core product portfolio by leveraging services and technology. While they had a sound portfolio, a couple of their flagship products were facing loss-of-exclusivity, and they were therefore looking for new avenues through which to strengthen their market position.

The client had good success in pockets with some of their drug device combinations and innovations, but believed a systematic approach was lacking in proactively driving innovation by leveraging services and technology. As a consequence, they wished to conduct a more structured and deep review of potential ‘beyond the pill’ type opportunities.

a-connect deployed a small team and helped structure and scope the engagement in different phases, working with a cross-functional stakeholder team to deliver this project. We supported the identification of key unmet needs in stakeholder journeys for one of their therapeutic areas, and used a combination of analysis and workshops to generate and flesh out ideas to address challenges, prioritize ideas into key opportunity areas, and recommend a selection of pilots. The project was highly successful in the implementation of pilots in this therapeutic area, and we also helped develop a playbook of this process that the client could use to roll out to other therapeutic areas.

Key takeaways:

  • It is critical to showcase impact and value: We observed that, in order to ensure the implementation of ideas, you need to demonstrate tangible value. While the ideation process itself can be very exciting, the ‘rubber meets the road’ when you ask for funding from senior management to support these ideas. A lot of these efforts lose traction at this stage. It is therefore key to keep this end in mind, in order to ensure impact while engaging in this process. It is important to align on the level and rigor of the expected business case early on in the process.
  • Clarity on the innovation process is key: No matter how many high-quality ideas are generated within and outside the organization, you need a clear process in order to successfully leverage them. Market insights need to be captured on an ongoing basis, and prioritized based on strategic relevance and revenue potential. The company should not only encourage a culture of innovation, but should also provide clear channels through which ideas can be collected (from within as well as from outside the organization).
  • Innovation needs to be supported by an effective commercialization/go-to-market strategy: In today’s ever-evolving market environment, speed to market is key for a company to stay relevant. As such, there has to be a clear focus on rapid commercialization following the collection, prioritization and use of innovative ideas in new product development.

Opportunities and Challenges in Digital Health 2017: The New Frontier in Healthcare

Digital Health is one of the hottest terms of this decade. This should come as no surprise when you combine the increasing power and affordability of computing and communication technology on one hand, and the rising expectations of and pressures on health systems on the other. The healthcare industry has consistently underinvested in the appropriate use of information technology and it lags behind comparable knowledge-intensive industries by about 15 years. Digital Health could well be the next big growth area for many companies.

Global technology giants have signaled a strong interest in the health sector, with companies like IBM and Google in particular making bets measured in the billions. But consider this for a moment: is this just hype created by the tech companies to stimulate their client industries, particularly life sciences and healthcare, to buy their branded picks and shovels for the 21st century gold rush of big data mining? Like many disruptive technological changes of recent times, I feel we might be overestimating the short-term benefits and underestimating the long-term ones.

What exactly is Digital Health?

It is difficult to find a concise definition of Digital Health. Its scope is very wide. I think the Wikipedia definition comes closest to embracing its complexity. I’d like to bravely/foolishly simplify it. Digital Health refers to the information and processes, and technologies and systems, that enable a person to make informed choices about their own health, take action to improve it, and monitor their progress to realize what works for them and what doesn’t. By contributing their own biological and behavioral data to the health system, people can give permission to carefully selected organizations and people in the system to anticipate and respond to their health and care needs, help good things happen and, where possible, prevent bad things from happening.

Why is it important now? 

We are seeing the last of the ‘accidentally well’ people, the pre-war generation that didn’t have to do anything in particular to stay healthy. Today, there are many more people whose ill health can be attributed to rapid changes in lifestyle in our modern society. We have easier access to energy (food) and less opportunity to expend it. Staying healthy now requires some effort that is not directly related to that involved in working or acquiring our food. We need to make conscious choices about food, work, play and rest in order to stay healthy.

The burden of lifestyle-related illness consumes around 70% of healthcare budgets in western economies, and the absolute value of these budgets is set to rise rapidly because of the ageing population in many of these countries. With healthcare budgets at breaking point already, clearly there is a need for a different way. The promise of Digital Health to enable better self-care and prevent or postpone the development of serious disease seems to offer a way out of a difficult situation.

What are the exciting developments?

IBM and Memorial Sloan Kettering (MSK) have collaborated to create IBM Watson for Oncology. IBM Watson is an artificial intelligence (AI) appliance that is available to large and small companies as a service. Just as IBM trained Watson to win the game show Jeopardy by feeding it all the prior questions and answers so it could learn how to answer future questions, MSK trained Watson using all the data they had available on cancer diagnoses and treatments provided to their patients, and the outcomes experienced. As a result of over two years of training Watson, oncologists around the world now have access to the best oncology brain in the world in the palm of their hand. The service continues to improve with all the data and outcomes it is still gathering.

The creation of AI infrastructures like Watson is spawning a new ecosystem of startups in Digital Health. Consider Talkspace, which provides psychological therapy through instant messaging. Although right now most of the therapy is being provided by a network of human therapists, all the interactions and outcomes are being ingested by Watson. The goal is to create an AI chat bot that will consistently provide high-quality psychological therapy. Babylon Health is attempting something similar in general practice (primary care or family medicine). These are ambitious goals. If they are successful, these ventures will dramatically change how healthcare is delivered in their markets.

There are scores of new ideas and businesses that are emerging every day, and Twitter is a useful tool for keeping up with new developments. Following people like @EricTopol (eminent cardiologist and author of The Creative Destruction of Medicine), @ManeeshJuneja, @Paul_Sonnier, @vgul, and others like them, will help you scan the Digital Health horizon.

What are the challenges?

There isn’t a clear regulatory framework for Digital Health. In the UK, the Care Quality Commission (CQC) and the Medicines and Healthcare Products Regulatory Agency (MHRA) are working hard alongside industry to bring the regulatory framework closer to the emergent technology frontier. There is a clear recognition of the potential of Digital Health to transform public (and private) health and care services. The regulator is keen to see that services are improved and people aren’t exposed to any new harm as a consequence of these innovations. The General Data Protection Regulation (GDPR) is also being updated with clearer guidance for all digital technologies, and particularly for healthcare, where personal and sensitive data is frequently processed.

One of the key challenges in most markets is finding a suitable business model for these great new innovations. Healthcare has a peculiar problem. In other industries, we see that technological innovation increases choices and tends to drive performance up and prices down. In healthcare, innovations increase choice and demand, but generally tend to increase prices. Consequently, healthcare budgets have been rising faster than inflation around the world. Secondly, most healthcare payment or reimbursement tends to be based on activity rather than outcomes (results). So there is usually no incentive to focus on prevention, and it is frequently not in the interest of most people and organizations in the healthcare business anyway. This is a toxic problem for healthcare for which strategic solutions need to be found.

What questions should we be asking our clients?

There is no doubt that healthcare needs to change in order to remain sustainable. An industry cannot remain viable if its customers cannot afford its services. Unless we see dramatic change in the next 10 years, there could be quite shocking economic and social consequences for the entire healthcare ecosystem (which includes life science and medical technology), and for society as a whole. If your clients are in any of these sectors, they are likely to be alive to these seemingly intractable issues. However, it may be worth your while to probe. Has your client considered how their businesses might get disrupted by digital technology? Where do they see the disruption coming from? What are they doing to mitigate the potential damage, quell it, or embrace it? Finally, how are they engaging with customers, regulators and innovators to ensure that their business will have a meaningful role to play in the emergent digital future?

Comments and questions are welcome via Twitter: @4LoyLobo and #ac-digihealth.

Seizing the Opportunity: Developing Personalized Medicine Technologies

Traditional medications have long struggled to deliver a desirable level of effectiveness for patients. The Personalized Medicine Coalition suggests that efficacy rates for drugs can vary from 25% to 60%. Drug compliance is also a major concern – a number of studies have shown that compliance is often only around 50%, a figure in part driven by negative side effects. While drug treatments often deliver significant improvements in quality of life, many patients continue to struggle with the compromises that come with taking a drug designed to be one-size-fits-all.

To address these deficiencies, medical technology is turning to personalized medicine: medications designed to work for the individual. The US federal government has shown recent support for technological innovations in healthcare, as demonstrated by its commitment to the 21st Century Cures Act, the Precision Medicine Initiative and the Cancer Moonshot.

About a quarter of novel drugs approved from 2014 to 2017 were personalized medicines, which has provided unique opportunities for innovative therapeutic and diagnostic companies. There are now 32 approved companion diagnostics (not including other FDA-cleared, pharmacogenetic assays) that can identify individual differences in drug metabolism and pave the way forward for personalized medical interventions.

As shown by results over the past half-dozen years, sorting patients based on their genome using evolving technologies (such as DNA sequencing and other biomarkers, as well as patient demographics/history) has the potential to overcome a number of problems – including efficacy and safety concerns. These technologies may also reduce unnecessary treatments and prevent spiraling treatment costs, as well as save on R&D expenses for developers and manufacturers.

Acknowledging the challenge of personalizing medicine

While many believe that personalized medicine (along with the companion diagnostics to implement it) will be the best way to achieve better and cheaper healthcare, there are still a number of (real or perceived) barriers (see Figure 1). These barriers drive drug research and development back towards the one-size-fits-all approach, rather than encourage the development of personalizable treatments. For companies already investing heavily in traditional drug development approaches, it may be difficult to imagine taking on these new challenges.

The dynamics of personalized drugs and companion diagnostics

Figure 1: The dynamics of personalized drugs and companion diagnostics

The Tufts Center for the Study of Drug Development estimates that the R&D cost for developing a new drug is between $1.4 billion and $2.9 billion – a huge investment for any organization. In addition, Health Affairs has highlighted the growth of ‘step therapy’ (trying one lower-cost drug before another more expensive drug, also sometimes called ‘fail first’) – an approach that indirectly reins in innovation and encourages the status quo. Step therapy grew to 73% in 2013 (up from 27% in 2005) among employer-sponsored healthcare plans, despite studies showing that, in a number of cases, delaying treatment can increase mortality or worsen other outcomes. So, how can medical technology businesses overcome these challenges to achieve the promise of personalized medicine?

Targeting future research efforts and collaborating strategically for success

Medical technology companies need to focus their energies on developing and utilizing tools that can match patients to the right drug (or other intervention) at the right time. To do this, they need to harness the potential of diagnostic and prognostic tools and resources, such as genome sequencing, novel protein and metabolic biomarkers, and, in the future, machine learning and artificial intelligence. They also need to identify the next research capacity bottleneck (rather than chasing their current competitors) so that they can lead the way with these evolving technologies.

Targeted investment in developing technologies, such as genome-based therapeutic technologies, may help with screening for compounds that have broader uses for targets with low genetic variation. Using state-of-the-art tools to target novel biomarkers may also be pivotal to success (to find out more about novel biomarkers, take a look at my White Paper on the topic here). Other valuable investments might explore blood-testing technologies to replace invasive biopsies (so-called liquid biopsies). Accumulating data on other biomarker types, such as immunoassays and metabolomics, could also provide an invaluable data bank for future research.

Medical technology companies will need to work with pharma and biotech firms early to identify, validate and gain approval for companion diagnostics. In addition, identifying companion diagnostics early in the drug development process may prove useful for selecting patients during clinical studies and getting timely co-approval during the regulatory process. Ultimately, creating the infrastructure for efficient trials will enable organizations to adjust their approach and work towards nichebusters rather than blockbusters.

Finally, medical technology companies will also need to develop the conversation with medical device companies to identify additional areas where a personalized approach may be effective. Medical device trials could also benefit from better patient selection. By pursuing complex health economic analyses in partnership with a range of therapeutic, diagnostic and medical device firms, as well as potential competitors, medical technology companies can drive and take charge of innovations in personalized medicine.

The application of personalized medicine may not only improve patient outcomes and lower healthcare costs, but also provide valuable business opportunities for perceptive medical technology firms. Organizations utilizing machine learning, artificial intelligence and other big-data technology can also contribute to personalized medicine, and benefit commercially as well. If your organization is looking to position itself at the forefront of developing medical technologies, contact a-connect today to find out how we can support your work.