The New War in Pharma: He Who Owns Patient Data Wins
Nov 02, 2015 08:20
CST Updated
08:20
Recently, the PwC Health Research Institute released a research report on the pharmaceutical market, outlining the challenges facing the traditional pharmaceutical industry, as well as the advantages and challenges of the emerging pharmaceutical sector, and offering recommendations based on its findings. So, as an emerging force in the pharmaceutical industry, how can companies seize global pharmaceutical market trends and rapidly establish their market position? The report provides detailed insights. Below, VCBeat has compiled and translated the key highlights from the report:
Consumer Data Is Catalyzing Cross-Sector Collaboration
As market forces drive the pharmaceutical industry, life sciences companies grow closer to patients, emerging technologies rise, and increasingly accessible consumer data catalyze cross-sector collaborations.
In the past, different operational units within health departments made decisions based solely on their own business priorities. However, with the renewed prosperity of product pipelines in the pharmaceutical and life sciences sectors, consumer choices and incentives for cost savings are reshaping the industry’s business model. As spending on specialty drugs in the United States reaches record highs, payers, physicians, and patients are increasingly considering price as a key component of a drug’s expected health benefits.
In 2014, the United States spent $373.9 billion on medicine, representing a 13.1% increase from 2013 among identifiable purchasers alone. Meanwhile, the U.S. reduced drug costs through mandatory price protections and pharmaceutical expenses stipulated under price protection clauses.
Patients are bearing higher medication costs as they shift toward high-deductible healthcare systems, where a significant proportion of specialty drug purchases is paid out-of-pocket. Physician groups and governments are increasingly concerned about the fiscal impact of expensive new therapies. The healthcare system is undergoing a transformation, moving from payment models based on the size of the covered population to new value-based models tied to health outcomes.
Meanwhile, patient advocacy organizations are publicly evaluating drug efficacy and providing funding and data to help pharmaceutical developers discover and develop future new therapies. Public and private payers are opening their datasets for collaboration and research. Congress is considering legislation that would allow commercial teams to promote the cost-effectiveness of new products. Technology is improving the continuity of clinical care.
Consequently, the divide between biopharmaceutical R&D, U.S. Food and Drug Administration (FDA) approval, and commercialization is gradually blurring. Patients are the ultimate arbiters of which drugs deliver value. Researchers are considering the impact of treatment decisions on the total cost of care. Meanwhile, patient data largely informs insurers’ decisions regarding when, how, and at what price points to adopt new medications.
Biopharmaceutical companies cannot stand by and watch as patients and health plans negotiate for their products. Instead, they must leverage patient data to clarify the drivers of drug costs by linking medication interventions to patient health outcomes. In a system that rewards outcomes and prioritizes quality, collaboration is key for all parties to realize value and ultimately increase revenue—this is the new health economy.
Survey results from the PwC Health Research Institute (HRI) show:
1. Payer groups and biopharmaceutical companies conduct population studies by linking administrative claims data with electronic health records—to better understand their key target populations, such as patients with multiple chronic conditions.
2. Healthcare providers are implementing new payment incentives and collaborating with the pharmaceutical industry to assess the effectiveness of therapeutic interventions for their patients. Prescribing practices are increasingly reflecting complex cost-benefit analyses.
3. New entrants are introducing biosensor technologies and digital health tools to help biopharmaceutical companies better understand patients’ lives and how they change in response to therapeutic interventions.
4. To facilitate research, patient advocacy organizations are establishing disease-specific registries and consulting with clinical trial protocol designers.
5. Enacting legislation, such as the 21st Century Cures Act, will encourage pharmaceutical companies to treat cost-effectiveness data as an additional product attribute.
Business Transformation in Pharmaceutical Companies
1. To link patient health outcomes with the cost and value of new therapies, biopharmaceutical companies must transcend the traditional boundaries between drug development and commercialization. Data on drug efficacy should continue to be collected after FDA approval. Ultimate patient treatment outcomes are more important than the specific clinical trial methodologies employed.
2. New Investment Pilot Projects. New competitors are flooding into the healthcare industry. Advances in digital monitoring and biosensor technologies can be combined with patient experience insights to identify potential unmet needs.
3. From the payer’s perspective. Insurance groups collaborate with health systems, leveraging patient data provided by these systems to make more informed underwriting decisions.
4. Embrace patients as partners. When it comes to data ownership, consumers will staunchly defend their rights. However, if they are made aware of the benefits of sharing research data, some will be willing to contribute their information. The U.S. National Institutes of Health (NIH) has currently made patient records for 39 diseases accessible to researchers.
5. Anticipated Regulatory Changes. Regulatory agencies are exploring new approaches to incorporate patient case data into drug review decisions. Leveraging patient data to drive normative development will offer a competitive advantage over waiting for legal frameworks to evolve.
Collaboration for Better Patient Care
New partnership pairings between traditional pharmaceutical manufacturers and insurance companies, healthcare systems, patient organizations, and technology companies are reconfiguring three key business operations: drug research and development, drug approval, and product commercialization.
All these collaborations share a common objective: to leverage newly acquired consumer health data to uncover insights into drug value and its relationship with health outcomes. The growing recognition that drug development has failed to adequately address patient needs and clinical medication adherence constitutes the fundamental driver behind these multi-stakeholder partnerships.
As new drugs enter the market and compete with established medications for elderly patients, the differentiation of efficacy and value will increasingly depend on patients and payers. Available outcomes data will support stepwise decision-making. New capabilities and evidence are required to understand how patients respond to medications over time. It is crucial to prescribe the right medication for individual patients based on robust evidence, as consumers may face substantial out-of-pocket costs.
Rising prices of specialized pharmaceuticals are further complicating buyers’ cost-effectiveness calculations in determining which medications to use. New payment models, such as Accountable Care Organizations (ACOs) aimed at reducing healthcare costs, are also prompting physicians to consider their own financial implications.
However, physicians also take their patients’ financial circumstances into account. The cost burden for patients is rising in conditions such as cancer, multiple sclerosis, and arthritis. According to a 2014 HRI survey, 92% of physicians reported that they consider costs before deciding whether to prescribe medication.
Collaboration to Maximize Data Value
HRI’s survey of managers, directors, and executives at 100 insurance companies found that purchasers want pharmaceutical companies to demonstrate the value of their drugs, even as skepticism surrounding the data persists.
5% — Highly confident in the economic data provided by the pharmaceutical industry.
60%—Agreed that pharmaceutical companies must demonstrate a significant clinical benefit.
45%—Unanimously agree that reaching a clear consensus on cost savings is necessary.
Although there is currently no one-stop solution for acquiring patient data and information, various organizations have successfully pieced together disparate data sources. Vivid and representative model outcomes are gradually being established, driven by the need for individuals to manage their health and access medical resources.
Strategic collaborations can maximize the utilization of funds invested in drug development, bridging evidence gaps regarding costs and comparative effectiveness for specific patient populations.
In drug development, companies must first assess what information they already possess, identify what additional data is required, and determine which service partners can supplement their internal knowledge and capabilities. This understanding constitutes the first step in deciding how best to provide evidence to buyers and suppliers.
Leveraging the strengths of patient advocacy organizations and networks can accelerate recruitment and facilitate clinical research. Patient organizations formed around specific disease areas possess a deep understanding of key issues and can provide valuable insights to inform clinical trial design and protocols.
Biopharmaceutical companies should also consider the various roles played by new entrants in supporting patient organizations and driving consumer engagement. Before initiating Phase III clinical trials, drug manufacturers should also understand the competitive landscape from the perspective of health insurance companies.
Summary: The Value of New Drugs Will Depend on Consumers
Collaboration is key to accessing and analyzing the data required for increasingly personalized product portfolios and pricing structures. The current distinction lies in the availability of vast amounts of consumer and quality data, which fosters new partnerships and helps pharmaceutical companies capture and interpret product value. New technologies are accelerating innovation in biopharmaceuticals by democratizing data access and empowering consumers to manage their own health.
Therefore, the rapidly evolving healthcare market necessitates a redefinition of innovation and value. Price competition will only bring more drugs to market. In the real world, demonstrating a drug’s value based on real-world patient outcomes can serve as a pressure release valve. Oncology drug development is pioneering new approaches that leverage shared data from individual tissues to build clinical trial models. In today’s new health economy, the value of scientific discoveries and newly developed drugs will increasingly depend on consumers over time.
Compiled by Chen Kun
Edited by: Bu Yan
Consumer Data Is Catalyzing Cross-Sector Collaboration
As market forces drive the pharmaceutical industry, life sciences companies grow closer to patients, emerging technologies rise, and increasingly accessible consumer data catalyze cross-sector collaborations.
In the past, different operational units within health departments made decisions based solely on their own business priorities. However, with the renewed prosperity of product pipelines in the pharmaceutical and life sciences sectors, consumer choices and incentives for cost savings are reshaping the industry’s business model. As spending on specialty drugs in the United States reaches record highs, payers, physicians, and patients are increasingly considering price as a key component of a drug’s expected health benefits.
In 2014, the United States spent $373.9 billion on medicine, representing a 13.1% increase from 2013 among identifiable purchasers alone. Meanwhile, the U.S. reduced drug costs through mandatory price protections and pharmaceutical expenses stipulated under price protection clauses.
Patients are bearing higher medication costs as they shift toward high-deductible healthcare systems, where a significant proportion of specialty drug purchases is paid out-of-pocket. Physician groups and governments are increasingly concerned about the fiscal impact of expensive new therapies. The healthcare system is undergoing a transformation, moving from payment models based on the size of the covered population to new value-based models tied to health outcomes.
Meanwhile, patient advocacy organizations are publicly evaluating drug efficacy and providing funding and data to help pharmaceutical developers discover and develop future new therapies. Public and private payers are opening their datasets for collaboration and research. Congress is considering legislation that would allow commercial teams to promote the cost-effectiveness of new products. Technology is improving the continuity of clinical care.
Consequently, the divide between biopharmaceutical R&D, U.S. Food and Drug Administration (FDA) approval, and commercialization is gradually blurring. Patients are the ultimate arbiters of which drugs deliver value. Researchers are considering the impact of treatment decisions on the total cost of care. Meanwhile, patient data largely informs insurers’ decisions regarding when, how, and at what price points to adopt new medications.
Biopharmaceutical companies cannot stand by and watch as patients and health plans negotiate for their products. Instead, they must leverage patient data to clarify the drivers of drug costs by linking medication interventions to patient health outcomes. In a system that rewards outcomes and prioritizes quality, collaboration is key for all parties to realize value and ultimately increase revenue—this is the new health economy.
Survey results from the PwC Health Research Institute (HRI) show:
1. Payer groups and biopharmaceutical companies conduct population studies by linking administrative claims data with electronic health records—to better understand their key target populations, such as patients with multiple chronic conditions.
2. Healthcare providers are implementing new payment incentives and collaborating with the pharmaceutical industry to assess the effectiveness of therapeutic interventions for their patients. Prescribing practices are increasingly reflecting complex cost-benefit analyses.
3. New entrants are introducing biosensor technologies and digital health tools to help biopharmaceutical companies better understand patients’ lives and how they change in response to therapeutic interventions.
4. To facilitate research, patient advocacy organizations are establishing disease-specific registries and consulting with clinical trial protocol designers.
5. Enacting legislation, such as the 21st Century Cures Act, will encourage pharmaceutical companies to treat cost-effectiveness data as an additional product attribute.
Business Transformation in Pharmaceutical Companies
1. To link patient health outcomes with the cost and value of new therapies, biopharmaceutical companies must transcend the traditional boundaries between drug development and commercialization. Data on drug efficacy should continue to be collected after FDA approval. Ultimate patient treatment outcomes are more important than the specific clinical trial methodologies employed.
2. New Investment Pilot Projects. New competitors are flooding into the healthcare industry. Advances in digital monitoring and biosensor technologies can be combined with patient experience insights to identify potential unmet needs.
3. From the payer’s perspective. Insurance groups collaborate with health systems, leveraging patient data provided by these systems to make more informed underwriting decisions.
4. Embrace patients as partners. When it comes to data ownership, consumers will staunchly defend their rights. However, if they are made aware of the benefits of sharing research data, some will be willing to contribute their information. The U.S. National Institutes of Health (NIH) has currently made patient records for 39 diseases accessible to researchers.
5. Anticipated Regulatory Changes. Regulatory agencies are exploring new approaches to incorporate patient case data into drug review decisions. Leveraging patient data to drive normative development will offer a competitive advantage over waiting for legal frameworks to evolve.
Collaboration for Better Patient Care
New partnership pairings between traditional pharmaceutical manufacturers and insurance companies, healthcare systems, patient organizations, and technology companies are reconfiguring three key business operations: drug research and development, drug approval, and product commercialization.
All these collaborations share a common objective: to leverage newly acquired consumer health data to uncover insights into drug value and its relationship with health outcomes. The growing recognition that drug development has failed to adequately address patient needs and clinical medication adherence constitutes the fundamental driver behind these multi-stakeholder partnerships.
As new drugs enter the market and compete with established medications for elderly patients, the differentiation of efficacy and value will increasingly depend on patients and payers. Available outcomes data will support stepwise decision-making. New capabilities and evidence are required to understand how patients respond to medications over time. It is crucial to prescribe the right medication for individual patients based on robust evidence, as consumers may face substantial out-of-pocket costs.
Rising prices of specialized pharmaceuticals are further complicating buyers’ cost-effectiveness calculations in determining which medications to use. New payment models, such as Accountable Care Organizations (ACOs) aimed at reducing healthcare costs, are also prompting physicians to consider their own financial implications.
However, physicians also take their patients’ financial circumstances into account. The cost burden for patients is rising in conditions such as cancer, multiple sclerosis, and arthritis. According to a 2014 HRI survey, 92% of physicians reported that they consider costs before deciding whether to prescribe medication.
Collaboration to Maximize Data Value
HRI’s survey of managers, directors, and executives at 100 insurance companies found that purchasers want pharmaceutical companies to demonstrate the value of their drugs, even as skepticism surrounding the data persists.
5% — Highly confident in the economic data provided by the pharmaceutical industry.
60%—Agreed that pharmaceutical companies must demonstrate a significant clinical benefit.
45%—Unanimously agree that reaching a clear consensus on cost savings is necessary.
Although there is currently no one-stop solution for acquiring patient data and information, various organizations have successfully pieced together disparate data sources. Vivid and representative model outcomes are gradually being established, driven by the need for individuals to manage their health and access medical resources.
Strategic collaborations can maximize the utilization of funds invested in drug development, bridging evidence gaps regarding costs and comparative effectiveness for specific patient populations.
In drug development, companies must first assess what information they already possess, identify what additional data is required, and determine which service partners can supplement their internal knowledge and capabilities. This understanding constitutes the first step in deciding how best to provide evidence to buyers and suppliers.
Leveraging the strengths of patient advocacy organizations and networks can accelerate recruitment and facilitate clinical research. Patient organizations formed around specific disease areas possess a deep understanding of key issues and can provide valuable insights to inform clinical trial design and protocols.
Biopharmaceutical companies should also consider the various roles played by new entrants in supporting patient organizations and driving consumer engagement. Before initiating Phase III clinical trials, drug manufacturers should also understand the competitive landscape from the perspective of health insurance companies.
Summary: The Value of New Drugs Will Depend on Consumers
Collaboration is key to accessing and analyzing the data required for increasingly personalized product portfolios and pricing structures. The current distinction lies in the availability of vast amounts of consumer and quality data, which fosters new partnerships and helps pharmaceutical companies capture and interpret product value. New technologies are accelerating innovation in biopharmaceuticals by democratizing data access and empowering consumers to manage their own health.
Therefore, the rapidly evolving healthcare market necessitates a redefinition of innovation and value. Price competition will only bring more drugs to market. In the real world, demonstrating a drug’s value based on real-world patient outcomes can serve as a pressure release valve. Oncology drug development is pioneering new approaches that leverage shared data from individual tissues to build clinical trial models. In today’s new health economy, the value of scientific discoveries and newly developed drugs will increasingly depend on consumers over time.
Compiled by Chen Kun
Edited by: Bu Yan