The drive for industry transformation in the shadow of blockbuster drug patent expirations has fundamentally changed industry best practices as companies have pursued increased operational efficiency, agility, and accelerated R&D. Technological innovation is enabling this transformation, empowering new collaborative business models while maintaining both full information control and global regulatory compliance in this new distributed ecosystem.
As a critical effort that has been ongoing for the last several years, the pharmaceutical industry continues to pursue transformational change in anticipation (or in the shadow) of lost blockbuster drug revenue due to patent expirations. At the same time, it is becoming increasingly difficult, more complex, and costly to bring new drugs to market. The ratio of new drug approvals to R&D spending continues to decline; clinical trials are getting larger, more costly and more complex; and key stakeholders are taking an ever more critical eye when considering new drug approval or reimbursement. The stakes have never been higher and it is becoming increasingly clear that the future industry will likely look dramatically different than it looked during rosier times.
Having already trimmed excess capacity, leading life science companies are continuing their pursuit of optimal operational efficiency and excellence through regular critical assessment of virtually every process along their organisational value chain. Processes that are deemed non-core competencies are being routinely outsourced to external partners as companies seek near term cost savings and / or process agility. Externalisation of non-core competencies is now the norm and preferred partnership arrangements are redefining what was historically called the FIPNET model [the Fully Integrated Pharmaceutical Network]. At the same time, the boundaries of the life science ecosystem are expanding and collaborations and partnerships have grown to include academic medical centers, healthcare providers, and healthcare payers under the umbrella of translational research / medicine.
There are a number of attractive features that are driving the industry to move forward in this new direction. In discovery research, the shift to acquire promising, late stage new drug candidates (albeit at a price premium) allows companies to leverage external life science investments and only pay for successful efforts. For those research areas that companies are continuing to pursue directly, external collaborations (especially in the form of translational research) are providing direct data and insights that are helping to reduce the risk in future development and commercialisation. This new external data is providing valuable insights early in the process in a number of useful areas that may include: anticipated efficacy in humans, expected market opportunity, and data suggesting likelihood of healthcare insurer reimbursement. With this data in hand, organisations hope to more effectively allocate their resources and improve the likelihood that ongoing R&D efforts will be fruitful.
Moreover, top life science companies are increasingly interacting with multiple stakeholders that may be distributed to all corners of the world. In addition to effectively managing their own facilities around the world, successful companies are increasingly interacting with partners with their own geographically diverse organisations. While this complex network provides tremendous opportunities to efficiently and effectively achieve common goals, there is also the significant potential for confusion and missteps.
Information transparency will be critical to enabling and empowering the new FIPNET approach to life science R&D. With process efforts increasingly residing outside of organisational boundaries, infrastructure supporting information transparency allow companies to more actively monitor progress in real-time, reducing the potential for efforts to go severely off course while concurrently eliminating logistical and geographic barriers to optimal process performance.
Successfully delivering information transparency in the life science industry will not be as simple as developing analytical dashboards on top of a single, study-specific consolidated data warehouse. In addition to addressing practical information sharing and security concerns, regulatory and logistical hurdles abound that complicate effective data, information, and knowledge sharing between key stakeholders. Clinical development, in particular, is awash with a myriad of regulatory restrictions that include requirements for maintaining patient privacy (e.g. HIPAA requirements in the United States) as well as other more specialised limitations (for example, some country-specific requirements that their clinical trial patient data reside in-country).
Global Internet connectivity, the IT cloud, big data analytics, and collaboration infrastructure will all play major roles in this new ecosystem. As an increasingly information-centric industry, successful companies will be those organisations that are able to best exploit available resources and translate their efforts into new drug approvals, expanded markets, and optimal market penetration.
As a foundational capability, global Internet connectivity provides the real-time interconnectivity that has enabled organisations to work efficiently and effectively in a geographically-agnostic environment. Whether it is down the street or half way around the world, it is now possible for teams to work together like never before. Bringing together best-of-breed expertise, regardless of geography or traditional organisational boundaries will be a key driver of the FIPNET model.
With data, information, and knowledge as a foundational resource, the IT cloud (either public or private) provides the industry with a virtual data storage and computational resource that can deliver full and controlled access to data across geographical and organisational boundaries. The ability of an IT cloud to provide a common accessible location for data sharing and analysis will be especially important for collaborative efforts, including the ability to integrate additional data resources, including publically funding research and development data (for example, the genome data from the 1000 Genomes project currently accessible on Amazon Web Services cloud).
While still relatively small in comparison with practical applications in both the retail and financial industries, big data analytics is only now beginning to become important in the life science industry. With the anticipated arrival of the $1000 genome and growing access to healthcare provider and payer data, it will be increasingly important for organisations to implement processes to more routinely extract key insights from these data sources on an ongoing basis. As the industry continues the shift from big market treatments to more targeted therapeutics, big data analytics will be an important contributor to identifying the biomarkers and other key therapeutic differentiators that will help to determine specific drug efficacy and safety on a more individualised basis.
By definition, the emerging FIPNET model is built on collaboration. Empowering collaboration within the life science industry is a tightly controlled endeavor, requiring specific tools to provide a secure interaction environment to share both ideas and data; capture intellectual property, where applicable; and provide a trackable and traceable record of the collaboration. Within the broader collaboration toolset, it will be important to be able to access data and information that may be located across the ecosystem, including both public and private data stores. Effective collaboration tools should be able to empower this access, although the development and adoption of available collaboration tools in the life sciences have achieved mixed success. While Microsoft SharePoint is the dominant collaboration platform at present, its use remains primarily at the level of top tier pharmaceutical companies due to cost. Several other collaborations platforms are currently in use, including the legacy EMC Documentum application, tranSMART, and Accelrys HEOS. It remains to be seen which collaboration platform(s) will become the de facto standard in the future. For most top life science organisations today, enabling access to data outside of organisational firewalls remains a significant mindset change and this transition is both ongoing with different levels of progress depending on the specific organisation involved.
To a lesser extent, advances in mobile technologies and social media are also expected to contribute to the emerging FIPNET model. In following progress in both the consumer space and best practices in other industries, the ability to better engage all industry stakeholders (looking inwards) as well as the eventual final buyer (patients and consumers, looking outwards) will be increasingly important as individuals become better informed and more information-centric.
From a mobile technologies perspective, the shift to BYOD (bring-your-own-device) remains at an early stage of adoption in the life science industry. Acceptance of the iPhone and iPad as acceptable mobile platforms within the industry is growing and applications are being rapidly developed and adopted across the life science value chain, ranging from laboratory equipment interfaces to data viewing / analysis platforms to sales force productivity tools. At some point it is not unimaginable that devices such as the iPad will eventually replace the computer laptop from the laboratory workbench through to the C-suite.
In following consumer trends, social media technologies have achieved early acceptance within the life science industry as a productivity tool in the form of instant messaging, blogging, and networking. While these informal tools have expanded as organisational collaborations and partnering has grown, they remain only a minor contributor to the broader, more systematic approach to partner interactions. From an externally facing perspective, however, social media technologies are becoming of major importance as organisations such as the Alzheimer's Foundation and Patients LikeMe provide life science companies with direct access to patients and disease-centric advocacy group resources directly. Social media technologies are extending the life science / healthcare value chain directly to patients and consumers, enabling life science companies to extend their reach to those with the greatest interest in bringing new treatment solutions to market.
While still relatively early in its adoption, the emerging new FIPNET model is built on a foundation of secure information transparency. Given the current business climate, this approach will only succeed if it continues to incrementally deliver measurable near term value.As both science and technology continue to advance, relevant innovations must be seamlessly integrated into the enterprise, allowing new approaches and insights to add to the arsenal of tools driving progress. As discussed already, information transparency will be critical to meaningful partner interactions, since the distributed partner network will be core to the broader organisational enterprise moving forward. The ability to share data, insights, and interactions simply and easily, with clear visualisation of status and outcomes in real-time will equip all key stakeholders with the tools and knowledge needed to systematically and efficiently advance the new therapies and diagnostics on the path to knowledge-based medicine. IDC anticipates that significant medical progress will be made over the next five to ten years, built on a secure, effective, reliable and regulated technology infrastructure that, like the advent of the smartphone, will change the way drugs are developed, medicine delivered and value achieved.
-- Issue 18 --
Alan S Louie, Research Director IDC Health Insights USA
