How Big Pharma Succeeds In The Era Of Digital Transformation

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Much has been made of how Big Pharma needs to learn from Big Tech in order to fully adapt to the digital age. Here, pharma industry veteran Richard Bergström argues that, in fact, the technology industry has much to learn from the pharmaceutical industry and that biopharma is well-placed to take the lead in digital health.

 

Message to Big Tech: you need to learn from Big Pharma

It is clear to everyone that new technology will dramatically change the way we deliver and organise health and social care. We all understand that new devices, sensors, apps and the like will put patients in the centre to collect and ultimately control their own data. We also expect new services for providers and payers to manage chronic conditions and to intercept disease. Technology will help us transform our understanding of social determinants of health to actions – providing tools for health and social workers to prevent bad health and to improve well-being.

 

What is less clear is how these new technologies and services will reach citizens and patients. I have noted that traditional biopharma and medtech companies are spoilt in the way that there are regulatory standards and procedures, coverage/reimbursement models, and an established supply chain. How do you bring an App or an algorithm to market? The FDA, under the leadership of Commissioners Califf and Gottlieb has taken the initiative to also allow digital therapeutics (pay attention to a new acronym: DTx) to be evaluated for effectiveness. The adoption of this by payers remains uncertain.

 

I have read and heard many people in our sector observe that it is difficult for companies to succeed in the space of digital health. One reason is that most start-ups apply the standard “go-to-market” strategy: you develop a product and then travel around to sell it to individual customers. In healthcare, the case is often that the customer is not a single operator (a pharma or medtech company; a hospital; a provider; or a payer), but the whole system. If you want a European single-payer, or a large US health plan, to adopt a new approach, they cannot deal with multiple solutions from each vendor/provider – often there can only be one infrastructure. Hence the need for new companies that provide platforms for various intermediation and services.

 

In my thirty years in the sector – both at big pharma company HQs in Switzerland and as head of industry associations in Sweden and at the European level (EFPIA in Brussels) – I have heard people predict the death of big pharma: “the dinosaurs”. They have all been proven wrong. By understanding health care systems – ranging from regulatory standards; to payment models, and what motivates different actors – big pharma (powered by smart people and helped by sizeable war chests) has been able to occupy the central ground in digital health.

 

Big pharma has been able to evolve through the eras of compound libraries and high-throughput-screening; biotech with monoclonal antibodies; and more recently with cell and gene therapy. I am not suggesting these approaches are obsolete – they are simply additive. And now we enter the phase of digital health. After early inroads into real-world data (such as Roche’s acquisition of Flatiron), the next step will be digital therapeutics and beyond those service solutions that do not involve pills or vials.

 

This future is not without challenges. In a recent podcast, I heard digital health guru Eric Topol (Making Sense podcast #162) talk about ethical and regulatory challenges with machine learning and artificial intelligence, and what a difference it makes if an AI-generated algorithm is “explainable” or not? Would we trust an algorithm on our smartphone to warn us about an upcoming stroke when we do not know causality or what data points are triggering an alert? Would payers cover visits to emergency rooms with costly CT or MR scans?

 

There is also the question about what data you can trust. One health minister told me his biggest nightmare is a cyberattack on his country’s health records and genomic data. What if data is manipulated to create health scares? Some countries have shown the way (such as Estonia) by using blockchain and cybersecurity solutions to provide a single source of truth. All these, and many more issues, will be discussed at the next European Health Forum Gastein (2-4 October 2019 in Bad Hofgastein, Austria).

 

Finally, in my arguments why I think biopharma is well-placed to take the lead in digital health, I think the incumbents (a good word in this context) understand patient privacy better than tech companies – big and small. I predict Facebook et al will pay many more billions in fines worldwide for breaching privacy rules, and I am personally sceptical about the current business model in which tech innovation is largely funded through person-triangulation and advertising. What is wrong with paying for the service? Or paying for health outcomes, as is increasingly the case in biopharma.

 

Message to Big Tech: you need to learn from Big Pharma. Been there, done that.

Comments


  • Marc Lange

    20.08.2019

    Interesting point indeed. However, I would have welcomed some words on change management, organisational and societal impact. Cheers

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