Pharma 3.0: Drug Companies Slowly Adapt to the New Tech World
The Ernst & Young report, which surveyed pharmaceutical executives, notes how certain trends, such as health reform, health IT, and the rising confidence in consumer power, are driving nontraditional companies into the sector. And this is prompting pharmaceutical companies to broaden their focus from product-centric to delivering cost-effective "healthy outcomes."
The March of Progress
Pharmas have been moving away from the old blockbuster-drug model of Pharma 1.0 to today's Pharma 2.0 model of broader integration and collaboration. But, the report concludes, they will need to move to Pharma 3.0, where the "ecosystem" is "comprised of established industry members, nontraditional companies and an increasingly informed data-empowered consumer" if they want to succeed.
"While this has always been an innovation-driven industry, the winners in Pharma 3.0 will approach innovation in new ways," said Patrick Flochel, Ernst & Young EMEIA life sciences leader.
The report highlights some challenges facing early industry attempts to adapt to the Pharma 3.0 environment, including regulatory issues; loss of exclusive control over data; and challenges of building alliances with non-traditional partners. But regardless of challenges, there is an awareness that change is coming: In a survey of key players in the pharmaceutical business and those whose fields are now intersecting it, 92% of respondents say they believe new entrants into will likely consist of e-health, mobile-health and new medical technology firms.
Smart Pill and Phone Apps
In an interview with PharmaExec, Carolyn Buck-Luce, global pharmaceutical leader at Ernst & Young outlined several existing initiatives. Novartis (NVS) recently invested in a company that will help it create "smart pill" technology: Sensors in the pill will transmit data and vital signs. "P&G also just bought the remaining stakes of NDBIP," Luce said, "which is a concierge doctor network."
Then there is Johnson & Johnson's (JNJ) LifeScan iPhone app, which allows diabetes patients to upload and manage their glucose information. Another well-known application is Bayer's Didget glucometer, which now can be connected to Nintendo's gaming devices to encourage children with diabetes to monitor their blood sugar regularly.
Through 2013, IMS Health predicts worldwide pharmaceutical sales will grow at a 4% to 7% compound annual growth rate. The industry is looking for new areas of growth, and technology is definitely one. For examle, worldwide sales of WiFi-enabled health care products will reach nearly $5 billion in 2014, according to a report from ABI Research.
Meanwhile, in March, the Mayo Clinic, AT&T (T), Kaiser Permanente, Vodafone (VOD), Verizon Wireless (VZ) will meet in Las Vegas for a summit called Everywhere Healthcare. On the agenda are several panels discussing the intersection of the wireless business and health care. It seems the issue is hot with existing and possible new entrants examining the matter.