How the New Connected Era is Reshaping Biopharma
Disruptive technologies are already reshaping the industry. Here’s how executives can meet the resulting challenges
October 2015 | by Steve Johnson
Big data, social media, and mobility are shaking up the business models of many industries. In consumer marketing, for example, the traditional consumer-purchasing funnel is giving way to the consumer decision journey. In this new, interactive arena, purchasing choices are mediated by social networks, mobile devices, and peer influence, offering marketers ever more effective ways of managing their brands at a time of stressed budgets. Similar disruptions are rolling through sectors from media to financial services.
The health-care industry has not been at the leading edge of such technology adoption. A number of factors, however, are pushing the sector toward greater “connectedness.” This trend has implications for biopharma, where opportunities to follow the technology path of other industries are increasing rapidly.
Where Biopharma Can Start
These are still early days in the industry’s evolution, so more questions than answers arise. Will cost reductions and product innovation, for example, be able to sustain acceptable returns over the long term? Should a biopharma player break from the pack, as IBM did in its industry, to become an early leader? What would a biopharma transformation strategy look like? What are the new capabilities required? What is the right focus, structure, incentives, and organizational approach?
The direction of a connected-health future is reasonably clear, but the pace of change and the magnitude and timing of the impact on biopharma are not. We believe, however, that starting now with targeted efforts to build internal capabilities will allow companies to meet their emerging business needs and set the stage for more significant value creation regardless of the pace of industry change. Innovative paths forward, of course, will vary depending on the profile of a company’s business and pipeline. In our view, two capabilities are key:
- Big data and real-world data analytics can inform product development and meet the growing market demand for evidence of product safety and effectiveness. This capability requires using clinical data in an uncontrolled, nonclinical-trial setting.
- New collaboration models and partnerships can be used to share risk, improve capital efficiency, and speed up business-process evolution and innovation across the value chain. Innovation in social media, mobile health, and big data demands a mix of capabilities no single player could have, so leaders will learn to partner in new ways to ensure their future relevance.
A few biopharma companies have moved forward to build strong internal research capabilities grounded in real-world data. Some have announced partnerships with payors and providers to expand access to new data sources and analytics. Other companies have made significant investments in social media to connect with their consumers and better understand their needs. Still others are pursuing partnerships for predictive medicine by using biomarkers and defining clinical protocols with information service providers. A few have explored or piloted end-to-end solutions with mobile-device makers that integrate the use of biopharma products with home and mobile monitoring services. Again, these activities are in the early stages. While some initiatives, of course, may prove unfruitful, others will provide data and valuable experience to guide future strategies.