We work with Life Science organisations across the spectrum and get to witness the ongoing transformations taking place. Here are our perspectives on what 2019 might have in store.
Digital Health: Driving Decentralised and Personalised Healthcare
From clinical to commercial applications, pharma companies are truly going digital as they look for innovative ways to engage, educate and communicate with stakeholders. From deploying wearable devices in clinical research, to using social media to recruit patients, to conducting fully virtual clinical trials – R&D is witnessing a shift towards a non-traditional digital model. Similarly, commercial applications include using mobile apps to educate patients/HCPs, ingestible sensors to track adherence to dosing regimen and adopting a more personalised approach to medicine via 2-way engagement.
Going forward, we expect digital to grow in strategic importance, with both established players and start-ups looking to bring disruptive innovations to the market (including solutions based on AI, IoT, Electronic Health Records (HER), telemedicine, etc). 2018 saw several new appointments of the Chief Digital Officer (Novartis and Merck being prime examples) – a trend we believe will continue in 2019.
Real World Evidence and Data Analytics: Going Beyond Clinical Trials
Real-World Evidence (RWE) is gaining huge momentum among pharmaceutical companies and drug regulatory authorities. Companies are progressively utilising RWE to enhance drug value proposition, influence regulatory decision-making and support outcome-based pricing. In 2017, Merck collaborated with Optum to draft reimbursement models leveraging RWE and health-outcomes data; while in 2018, Novartis substantiated the safety and efficacy of its psoriasis drug, Cosentyx, using RWE.
Use of RWE for expedited drug approvals and optimising the drug development process (e.g. clinical trial design, patient recruitment, etc.) is also on the rise. Key regulatory bodies (including USFDA) are expected to introduce new policies and guidelines to promote RWE usage to improve efficiency and safety, and lower drug development costs.
Driven by gigantic volumes of RWD and increasing push from RWE stakeholders to generate deeper insights from the data, use of big data and advanced analytics is increasing. New breeds of analytics tools are emerging, which offer diversified data source/type compatibility, faster analysis and better visualisation. Moreover, there is a growing wave of managing RWE internally, which is driving investments in in-house RWE-related resources and analytics technology.
Innovative Pricing Mechanisms: Survival of the Adaptive
In 2019, the pharma industry is expected to witness significant pricing pressure in key markets, especially the US and Europe. The unfavourable political scenario, and President Trump targeting the pharma industry on multiple fronts, has reduced the industry’s freedom on price increases in the US, as indicated by Pfizer’s rollback of proposed price hikes for 41 drugs in the US in July 2018, and subsequent price freezes announced by Novartis and Merck. Similar pricing pressures from governments and payers are at play in Europe where the focus is on increasing use of generic and biosimilar alternatives.
In this scenario, the pharma industry is looking at adopting novel pricing mechanisms to demonstrate the value of innovative products and mitigate the pricing pressure. Novartis’ attempts to cut pay-for-performance and discounted pricing deals with payers for its premium innovative cell therapy Kymriah, and Gilead’s cooperation with Louisiana government to establish a subscription-based drug delivery model for hepatitis C drugs, are examples of such innovations in pricing. Further, use of data analytics to develop prescription drug discount plans, as demonstrated by North Carolina-based data analytics company Inmar, is likely to gain traction. Going forward, we expect similar approaches to be followed across the world.
Biosimilars: Contrasting Story of Two Regions
Biosimilars have been expected to be a part of the healthcare cost reduction strategy of most payers; however, adoption levels in Europe and the US are strikingly different.
Despite offering tremendous market potential, biosimilar adoption in the US has been extremely slow due to a host of tactics used by biologics manufacturers including creation of rebate walls (offering high price discounts on use of biologics to payers only if they do not reimburse biosimilars), patent litigations, deals stalling launches and allegedly disseminating misleading information about safety and efficacy of biosimilars.
The winds have started to shift as the US Government and USFDA have started to work on these issues. FDA’s Biosimilar Action Plan, rolled out in July 2018, aims to address a few concerns of biosimilar manufacturers. Similarly, payers such as UnitedHealthGroup, benefiting from revised Medicare rulings in 2018 have started to offer biosimilar preferred status in their formularies, promoting their adoption. We expect the trend to continue in 2019.
Europe has generally witnessed high adoption of biosimilars, supported by the regulatory bodies and national payers. In many categories, biosimilar adoption levels have reached 70–80% with multiple products available in a single therapeutic indication. We expect biosimilar manufacturers to focus on the rapidly growing European market. However, increasing competition is likely to force biosimilar manufacturers to focus on each local market separately, deal with the price erosion and reduce overall costs, providing high value to payers.
With additional research by Payal Narayan, Parag Dange, Mayank Thamman and Varun Mahajan.