How pharma may or may not win in a digital world

Healthcare is going digital at a rapid pace. A recent article by McKinsey & Company titled ‘How pharma can win in a digital world’ outlines emerging trends in digital health and how pharma needs to evolve to keep up with the times.

A number of predictions in this article are, I believe, misguided and reflect a common, but incorrect understanding of the potential of digital in health.

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Prediction # 1: “Patients are becoming more than just passive recipients of therapies”

Patients have certainly become more knowledgeable about their own health and about available therapies. And hopefully, health-related apps are helping people lead a healthier lifestyle and stay on top of their medical conditions and medications. However, patients have never been passive recipients of therapies. Patients have always had the choice of taking or not taking their pill, cutting it in half, skipping a dose, forgetting to take it, taking it with food when they are not supposed to etc.

Having served pharmaceutical clients for more than a decade, I have frequently observed that it is difficult for someone within the industry to understand that the medicine they are producing is not the be-all and end-all of a patient’s existence. Life is a busy thing. You work, you look after your family, you eat, you entertain yourself, and you may have a health problem that benefits from taking a medication. The act of taking a pill consumes a fraction of your time and attention. Medicines for health issues that are non-symptomatic may be forgotten because the patient does not feel sick. Medicines for chronic, life-threatening conditions may have suboptimal compliance because the patient would rather not be constantly reminded about his or her precarious situation. For acute conditions, compliance wanes as soon as the patient feels better. Side effects deter patients from taking their pill, etc. Compliance would not be such a huge unsolved problem for pharma if patients were ‘passive recipients of therapies’.

Prediction # 2: “Patients will be actively designing the therapeutic and treatment approaches for themselves with their physicians”

I have read this type of statement numerous times in articles about the future of pharma. Perhaps I am lacking understanding of what’s technologically possible nowadays, but for now let’s assume I have a pretty good handle on it. Designing a pharmaceutical product is an extremely specialized and complex process that involves scientists and labs. A chemical or biological compound with certain properties is created to address a specific health issue, and this compound cannot be easily customized. Rather, it is created and then subjected to rigorous testing, costing hundreds of thousands of dollars (or more), and if it does not hold up to scrutiny, then it’s back to the lab for more experiments and tweaking before another round of expensive testing resumes.

Physicians who spend most of their time in clinical practice do not design therapeutic and treatment approaches. They are merely the retailers of those approaches, acting as consultants to their patients and advising them which approach may be best suited for them. And patients will not be actively designing their own therapies unless they are experimenting with mixing pills and brewing up concoctions of their own invention (caution: don’t try this at home, kids!).

With substantially increased access to information patients can play a much more active role in selecting treatments, but they will not design them.

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Prediction # 3: “Medicine will be personalized to address individual patients’ needs” (not in McKinsey article, but can be found in many other publications on digital health).

The move towards personalized medicine is certainly well underway. However, it does not mean that a therapy will be designed on the spot for the individual sitting in front of his or her physician. Again, the physician is the expert mechanic using existing wrenches and bolts to fix the car. The inventor who comes up with new wrenches and bolts does not deal directly with the customer whose car broke down.

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Personalized medicines are medicines that target issues more precisely than was previously possible. While physicians used to set off a grenade to blast away your breast cancer, and half of your body as well, they now use a precision rifle that locks in on the malignant area and eliminates not much else. And depending on your genetic profile, there are different bullets that are most effective for your particular type of problem. So the array and precision of weaponry in the physician’s arsenal has increased vastly, and affordable genetic tests have contributed to better targeting of the weapons. But none of these things are designed on the spot, while you’re sitting in the examining room, nor will this be possible for a long, long time.

Explanation: Poor understanding of digital vs. physical contributes to common misperceptions

How do these misconceptions come about and why do smart people write these things?

The past five to ten years of our experience of living in a digital world have greatly impacted our beliefs in how easily things can get done and our feeling of agency. Want to customize your new car? Just click on the features that you want – sunroof, heated seats and the colour red – and you can get this exact model without any effort on your part. Select the perfect outfit? Choose the style, colour and size, and get it delivered to your doorstep the next day. Don’t like part of your video? Just delete and replace.

The ease of these digital experiences has gotten us into the mindset that things can be designed instantaneously, delivered rapidly and modified on the spot. We rarely think about the physical realities that enable our digital experiences. To give you the experience of ‘designing’ the perfect outfit for yourself, the maker has to come up with new styles to attract your desire, run efficient manufacturing to put the piece together with acceptable quality and at an affordable price, ensure the supply chain to enable the manufacturing, build in agility to adapt supply to demand quickly, and create a distribution system to bring the piece to you. All of these things are not done through click of a button, but through the hard work of setting up systems, negotiating agreements, fine-tuning machinery and materials and implementing physical processes.

It’s the same for pharmaceutical products. They are chemical compounds, after all.

Digital opportunities

However, the potential of digital solutions to transform the way we care for ourselves and the way healthcare is provided to us is undisputed. From life tracker apps that help you remember to take your pills on time to smart contact lenses that monitor blood glucose levels without pricking your finger to ingestible sensors that give you peace of mind that your schizophrenic brother has actually taken his medication, digital interfaces, algorithms and sensors can deliver great value to the patient.

The question is how this translates into business opportunities. Many people believe that pharmaceutical companies should transform themselves from being “a products-and-pills company to a solutions company” (see McKinsey & Company article). The idea is to not only provide medicine to the patient but also digital tools for monitoring of the patient’s condition, for communicating with the patient’s circle of care, for scheduling and reminders, for supporting rehabilitation after events and for outcomes tracking. From a patient perspective, this could certainly be a valuable offering. From a business perspective, the value proposition is less clear.

First of all, pharma companies do not typically have the expertise to develop digital solutions in house. Some form alliances with tech companies. Novartis and Google are developing smart contact lenses for people with diabetes and are scheduled to start trials this year. Otsuka and Proteus Digital Health have teamed up to embed a digital sensor into a schizophrenia medication to track compliance, and have submitted the first digitally enhanced new drug application to the FDA. J&J has set up a series of incubators and rewards startups for coming up with interesting ideas in digital health. Merck sponsors health hackathons.

What does the pharmaceutical company get out of this? Will physicians choose their medication over competitive products because it comes with a digital value add? Is the digital component just another cost factor that is necessary to stay competitive these days, or is there a revenue model somewhere? It seems that there is currently a climate of experimentation without a clear business model path ahead, not unlike many other areas of digital development.

In crowded markets with little product differentiation, it is possible that the companion app could become the deciding factor in recommending one drug over the other. However, it is hard to imagine that it would play any role if there were differences in efficacy or side effect profile between the compounds. A tricky little question is also what to do with patients who need to switch off one product and go to another. Should they be denied continued usage of the app?

To be truly solutions providers, pharma companies would need to be structured differently, around disease states, not around products. It would make more sense to form a company that is, say, a ‘cardiology broker’, offered great digital tools to manage a variety of cardiologic conditions and give patients access to the full gamut of cardiology drugs available. The sales reps for this company would not overtly or covertly ‘push’ one or two drugs, but they would advise physicians on what is new in the field and impartially discuss the merits of the different options. There are some attempts of pharma companies to become leaders in a therapeutic space and assume the role of expert provider – for example Roche or Novartis in oncology, where both companies have a large product portfolio. However, by and large, this type of business model does not apply to how pharma companies are organized and how they make money currently. It would be more applicable to private payors, and we see some organizations in the U.S. moving in this direction.

Low-hanging but sour fruit

The obvious area where digital tools can be used very effectively to drive engagement is patient-related. Arguably, a more engaged patient will likely be more compliant and stay on therapy longer, resulting in immediate benefit to the bottom line.

However, while many companies try to be patient-centric, any direct engagement with a patient carries the risk of an adverse event report with it. While adverse event reporting systems have been set up to keep patients from harm, unfortunately, reporting requirements are ridiculously broad. Nobody is keen on generating massive amounts of adverse event reports for their drugs. So digital engagement of patients has to be done with all sorts of caveats to reduce the risk of learning about an adverse event. Some companies stay away from direct engagement with patients altogether for that reason; others have taken the plunge and struggle to come up with creative ways around the problem.

Another challenge in engaging with patients through digital tools and platforms is finding appropriate engagement formats for particular audiences. A platform that has been designed to help kids with pain through gamified challenges and ‘levels’ may not be the right approach to engage a 70-year old cancer patient. Very little testing and research has been done to date to find out what tools best support patients with certain conditions. The key here is to be open to a multi-platform approach. While a game may be great at motivating one audience, a combination of text reminders and phone support may be best suited to keep another audience adherent to their treatment. Unfortunately, many of the vendors that design patient engagement tools on behalf of pharma are either all digital or not digital at all. What would be needed is a new type of vendor who can pull together various types of tools and customize them for a particular target patient population.

Low-hanging sweet, sweet fruit

One area where pharma could employ digital innovation easily and with sustained impact is in the way companies communicate with physicians. While almost everyone has switched to iPads for detailing over the past few years, pharma companies (in Canada, my home turf) still have limited understanding of how digital can be used to improve access and deliver value to physicians. Knowledge about different forms of digital engagement is lacking in marketing departments where people think Twitter and Instagram are for self-absorbed teenagers with too much time on their hands. Also, there is a feeling that digital is not important to the physicians who are core to the business. However, as one year after another go by and younger physicians become key opinion leaders and high prescribers, companies may find that they have missed the boat in establishing a digital rapport with these individuals.

Only recently have some companies started to think about conducting media audits and finding out from their core target how they use digital tools and what might be of value to them. Putting some effort and resources into understanding the myriad of different ways digital can be used, and physician preferences in this regard is relatively simple and will almost certainly have a payoff within a five-year timeframe. There will likely be some resistance from the sales folks who tend to see alternatives to face-to-face engagements as a threat to their position. However, I believe that the 21st century sales rep needs to be an expert in offline and online relationship building. Pharmaceutical companies need to figure out how to integrate different forms of digital and non-digital engagement optimally, and create internal structures and tools to maximize value for the customer.

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McKinsey & Company article source:

http://www.mckinsey.com/insights/pharmaceuticals_and_medical_products/how_pharma_can_win_in_a_digital_world

Image sources:

‘Digital health collage’: Made the image myself

‘The alchemist’: https://openclipart.org/detail/222415/alchemist

‘Tools’: DeWalt DEWALT DWMT72163 118PC MECHANICS TOOL SET on http://toolguyd.com/dewalt-ratchets-sockets-mechanics-tool-sets/

‘Cartoon’: I’ve seen this cartoon on the web many times, but don’t know who made it originally. I’ve copied it from https://effectivesoftwaredesign.files.wordpress.com/2015/12/wheel.png?w=640

 

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What should patients know about their disease?

A recent survey by the Dana-Farber Cancer Institute showed that many women who had surgery for their breast cancer did not know basic facts about their own tumour, such as their HER2 status, their ER status, their tumour stage and grade. @DanaFarber

The lead author of the study, Dr. Rachel Freedman, expressed surprise and concern at these results.

http://www.dana-farber.org/Newsroom/News-Releases/many-women-lack-basic-understanding-of-their-breast-cancer-study-finds.aspx

Why should patients know or care about these things? I have been immersed in the field of healthcare and pharmaceutical market research for more than ten years, but when it comes to my own health, I find I am not really interested in learning about the intricate details of my ailments.

Professionally, I often talk with physicians who make treatment decisions on life-threatening diseases and marketing executives from pharmaceutical companies who promote therapies to treat these diseases. Both of these groups focus a great deal on the minute differences between this drug and that, between different genetic mutations and cellular targets and markers that guide therapy choices. This knowledge is essential to their livelihood and their job. Should it be essential for patients as well?

Let’s draw an analogy to other areas of life.

When my car breaks down I bring it to the mechanic. What I am most interested in is: A) How serious is it? B) Is it fixable? C) How much will it cost to fix it and how much time will it take? I believe the mechanic to have all the knowledge about the different parts in my car and the tools that are needed to fix them, should they break down. I trust my mechanic to give me an honest assessment of the damage and the different options for repairing it (yes, I have an honest one). I don’t need to know anything else. Why should it be different for medicine?

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Or here’s another one:

When I decide whether to buy an Apple smartwatch or a Samsung Gear, I base my decision on things like what apps they offer, how the screen is laid out and which smart gestures they support. How the people at Apple or Samsung get the watch to have these features is irrelevant for me. All I care about is what I can and cannot do with the watch. And whether it looks cool. And how much it costs.

Samsung Gear S

And now back to medicine:

Is it fixable or will I die (soon)? How long do I need to take this therapy for? Will it make me nauseous? Does my insurance cover it? Will it prolong my life? How much of a hassle is it to take it? These are the types of questions that are relevant for a patient.

That’s hard to understand for someone who is focused on the science of medicine. But healthcare is more than science. Extending someone’s life or halting disease progression are only surrogate endpoints. The real endpoints are enabling patients to lead the life that they want, how they want it. These endpoints are, of course, immeasurable.

Doing Business on a Global Scale

Today, it was reported that “Chinese court finds GlaxoSmithKline guilty of bribery”. This raises the question: Is the Chinese government really cleaning up? Or did they just not bribe the right people? Why is GSK in the spotlight and not others?

Having lived and worked in Russia, and frequently discussing their country’s state of affairs with friends from Columbia, Iran, China and India*, bribery and favouritism seems to be a fact of life in a number of countries including BRIC and the Middle East.

Most people here in Canada and presumably also in the US would agree that bribery is bad. In fact, the US has very strict laws forbidding US businesses to engage in such practices abroad. I agree that one should uphold one’s moral standards in contexts which challenge them.

But I’d like to add a word or two to explain why bribery is so rampant in some countries. It is not a lack of business ethics, as one might suspect, but rather a reaction to the conditions under which businesses have to operate in these countries. What is really lacking there is the rule of law.

For someone who has lived in the ‘West’ all their lives, it is difficult to image what the absence of rule of law looks like, and what it does to you. Imagine business where you sign contracts but you cannot enforce them. Where you accumulate wealth, but where it can be taken from you at any time. Where you apply to the authorities – police, judges, lawmakers – for help, but they do not serve you. All and everything you do, your success and failure is dependent upon knowing the right people, forging the right alliances, and often money changes hands. If you run a profitable business, others want a piece of the pie, or they won’t let you do your work.

If you make the wrong move, if you get in the way of someone more powerful than you, then you go down – accused of bribery, tax fraud, unsanitary working conditions etc. etc. Maybe you are guilty, maybe you are not. If you are lucky, you can pay your way out of it. Otherwise, you may end up in jail like Mr. Khodorkovsky, or worse.

Yes, people pay bribes and they should not be doing that. Yes, people defraud on their taxes and they should not be doing that. Yes, people let their employees work in unhealthy and unsafe conditions and they should not be doing that.

However, those that get singled out and publicly blamed for their wrongdoing are not necessarily the worst culprits. They are simply the ones who did not play their cards right, who ticked someone off. So how did Glaxo get into this mess?

* Thanks to Toronto’s multicultural community!

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Innovation, the new normal?

Companies in many sectors are facing rapid change. Following Clayton Christensen’s terminology, established businesses are being disrupted by new technology, and new business models are developed around these technologies.

Whether it is 3D printing of medical implants, crowd sourcing of clinical trial data analysis, software that supports pre-clinical studies and identifies the most promising drug candidates, ‘big data’ capturing patients’ genomic profile or personalized health records that patients can carry from physician to physician, fundamental transformations are afoot in the healthcare industry.

Consultants to the healthcare sector struggle to stay on top of all the different angles that are emerging. How much reading can you do in a day? Should you rather update your skills in data mining (i.e. working with ‘big data’) or become an expert in social media platforms and the many ways they are being used by patients and physicians or study government initiatives to incorporate new technologies in reorganizing the way healthcare is delivered to the patient?

The state of confusion is pretty typical for market changes. Initially, there is a whirlwind of new ideas and approaches. Are electric cars going to be the way of the future or ceramic fuel cells? Or will biking emerge as ‘disruptive technology’ in a reorganized urban neighbourhood? Will patients carry their own health records around on a USB stick or will they become universally accessible through a (password protected) cloud? Will pharmaceutical companies find ways to make drug development cheaper or will fewer drugs be approved or will best supportive care with the bells and whistles of comfortable retirement living ‘disrupt’ the oncology pipeline? Will iOS, android or Windows 8 emerge as the dominant ecosystem for computer / tablet / phone or do we need to learn all three to know what works how in which environment? Etc, etc.

Should we wait until the dust settles before we decide how to focus our efforts?

I am not sure that the dust will ever settle. The pace of change is accelerating, with no sign of stopping or settling down. Then where should we pitch our tent? What should we hold on to? I believe that companies and individuals will succeed who develop mechanisms, routines, practices that allow them to deal with change. Not just once, but on an ongoing basis. Those who effectively survey what is going on in the whirlwind, who systematically capture their own ideas on how to ride the storm and who devise an easy process that allows them to test, develop and implement these ideas will have a chance.

Is big data transforming healthcare marketing research?

Yesterday (June 27, 2013), SAS and GSK announced a collaboration which puts clinical trial data ‘in the cloud’ in a secure way, respecting the privacy of trial subjects, and makes it accessible to other researchers. It is believed that other big pharma companies may follow suit and create an unprecedented shared data base that could potentially speed up the analysis process, make analysis more transparent and produce significant advances in medical discovery.

While this particular example of ‘big data’ pertains to clinical trials, many other big data sets exist (or are being created) in the healthcare space, awaiting data integration and analysis. One wonders to what extent this trend will impact the need for primary healthcare marketing research. Secondary data analysis is not new – it has been part of business intelligence for a long time. What’s new is the amount of data that is being collected, the multitude of platforms and interfaces through which it is collected and the ease with which the data can be accessed and analyzed.

Traditionally, primary marketing research has been faster than secondary data sources at delivering behavioural data such as prescribing of certain drugs. This is now changing. Mobile health apps, EMR, data warehouses for adverse event reporting, point-of sales data at the pharmacy level and many more points of data collection are becoming more readily accessible. Secondary data is going ‘real time’, well almost. On the other hand, primary data collection methods can also harness the power of ‘real time’, thinking of mobile surveys etc. Who will come out on top, or rather, which mix of primary and secondary sources will deliver the best insights?

Also, primary marketing research has been practically the only way to capture attitudes and beliefs and to explore how they relate to behaviour. Arguably, communicating with your target audience is still the best way to understand their motivations. However, social listening, drawing on tens of thousands of online conversations and powerful tools for text analysis, has made some inroads into this area as well. In addition, to what extent do stated opinions really drive behaviour, and how good is primary market research, even with creative methods and advanced analytics, at uncovering these drivers?

Big data is certainly transforming the primary marketing research industry, in healthcare as well as in other sectors. The question remains which solutions will bring the most value to clients and will become the new standard for companies who survive the transformation.

Banking on our fear of death

Pharmaceutical companies have reoriented their businesses over the past several years to focus on discovery of molecules that target narrow markets, usually in oncology or in rare, but serious diseases. It is well known that revenues for ‘mass market’ products for diseases that are highly prevalent and not immediately life-threatening have been declining and few truly breakthrough discoveries have been made to replace revenue drivers that have become generic.

But why the rush into oncology and other small-but-serious markets? I believe that this has to do largely with our attitude towards death. Inevitably, we will all die of something. Before the advent of penicillin, people died of infections. As medical care has improved dramatically in the past 100 years, at least in some parts of the world, we live longer and are more likely to experience diseases which are basically a function of our body breaking down i.e. cancer.

Oncology drugs present an attempt to prevent the inevitable. In some tumour types, enormous advances have been made – breast cancer, for example, can now be regarded more as a chronic disease than as a terminal illness. For many other tumour types, however, scientific progress has been underwhelming. New agents are being trialed and approved that offer three or four more months of progression-free survival or a few months of overall survival vs. the incumbent standard of care. …and regulatory bodies such as the FDA find it difficult to turn those agents down, because they allow patients to live longer. Enormous costs to the healthcare system are perceived as justified, because they allow patients to live longer.

How much value do four extra months have when you are very sick and 80 years old? I don’t know, as I have not yet been in this situation. Who drives decisions to try another therapy, complete with side effects, at that point? Is it the physician, feeling compelled to offer a treatment when one is available? Is it the patient, clinging to life? Or is it the patient’s family, not wanting to let go?

One thing seems certain – no politician in his or her right mind will advocate spending healthcare dollars elsewhere, when there is time to be gained in the battle with death. Can you imagine the headlines? But the societal discourse may be shifting, looking at more humane ways of dealing with end-of-life, and re-evaluating our overall priorities in what kind of healthcare is being offered and funded.

Personalized, patient-centric medicine

Much has been published lately about personalized medicine. The other, similar buzzword is patient-centric.

It seems to me that in these terms, consultants and trend-spotters mesh together two very different ideas, each with associated with different strategic implications.

Personalized medicine in the sense of using biomarkers and genetic information to target therapies more specifically to patients who are more likely to respond to them is an approach that many pharmaceutical companies are embracing.

However, in this context the patient as a person has very little relevance for the R&D process and the commercialization of new products. What he or she feels, thinks, believes or does is unrelated to the peculiar genetic mutation that makes him or her a good candidate for a specific drug.

The second trend, namely focusing on the patient as a person, does not usually play a role in drug discovery. Pharmaceutical companies commonly find themselves in the situation that their compound is the third or fourth me-too agent to market with little incremental benefit. Identifying and targeting a specific patient with distinctive attitudes, behaviours and needs can be a successful marketing strategy in an undifferentiated market.

And while some companies may strive to bring both approaches closer together – understanding the patient as a person and developing new molecules that meet the patient’s specific needs – this is far more difficult to achieve in pharmaceutical product development than in the area of consumer goods.