How pharma can stay competitive in the digital world
(Drugmakers like Novartis have partnered with Google and other tech companies to offer "beyond-the-pill" solutions for patients. Google and Novartis' contact lenses aim to combat diabetes in real-time. Photo: Google)
As drugmakers seek new ways to incorporate digital technology into the way they do business, questions persist about whether the culture at traditional pharma companies is willing to change and move toward digitization.
A report from McKinsey & Company compiled interviews with 20 executives from the analytics, pharmaceutical, provider, technology and venture capital sectors. The overall consensus, the authors of the McKinsey report found, is that the industry needs to transform itself to stay competitive.
“Successful ones will rethink their business and operating models, transform their cultures and capabilities and adopt a new, longer-term mind-set that fosters innovation and bold strategic moves,” wrote the authors of the report.
It's clear that as the adoption of digital initiatives accelerates, pharma companies will need to experiment more and do so more quickly to respond to the changing behaviors of patients, said Olivier Leclerc, a director at McKinsey.
1. Transition from being an assets company to a solutions company
(Dexcom's latest glucose monitoring system sends glucose data to smart devices via bluetooth connectivity. The company is currently working with Google to create new glucose monitoring systems. Photo: Dexcom)
Now that tools such as health websites and mobile apps are becoming much more prevalent and sophisticated, patients are increasingly taking an active role in their health, sometimes giving doctors informed opinions on how they should be treated. Pharma companies can no longer simply develop and sell drugs; they need to sell services and offer solutions that engage patients. So-called “beyond-the-pill” initiatives are becoming more common.
“One of the most exciting values of digital to the pharmaceutical industry is how technology may be able to supplement or support pharmacological therapies to more effectively address the problem of suboptimal outcomes,” one unnamed director of US medical affairs at a global pharma company told the authors of the report.
Partnering with technology companies is one approach that some pharma companies are taking, according to the report. Google's collaborations with DexCom, which markets a glucose monitoring system, as well as with Novartis and Sanofi to create contact lenses for diabetes patients aims to improve treatment by tracking glucose and insulin levels in real time.
The report also recommends that drugmakers combine different therapies from different manufacturers, citing the oncology sector as an example. “There is a growing movement to combine novel immune and targeted therapies with market-leader PD-1s from Merck and BMS,” the authors wrote.
2. Be transparent
To do this efficiently, pharma companies need to share data with each other and be more transparent to the public. Because more data on clinical trials is now more publicly available than in the past, pharma companies need to manage communication around this data to stay ahead of the curve and optimize outcomes appropriately, explained McKinsey's Leclerc.
“Pharma companies may think they need to keep their data secure, but not being transparent about clinical trials will in fact put them at a perilous disadvantage in front of patient groups and, eventually, regulators,” said Neeraj Mohan, executive director of Blackstone Group, a private equity and investment firm.
Lastly, Leclerc said one striking barrier within pharma companies is organization. “It's not the data or technical aspects that are the problem,” Leclerc said. “What is difficult is how to revamp some of the processes and governance, how to track impact and scale them up.”
To overcome these organizational issues, Leclerc recommends three steps to drugmakers: set up a clear governance structure that tracks success and decides which digital initiative to allocate over time; assign dedicated budgets and decide who offers funding; and deliver a personalized experience for patients and physicians.
“What I certainly see is that there is more testing and learning,” said Leclerc. “It depends in great part on the leadership of the company and how savvy they are about digital. I'm not pessimistic about big pharma's ability to evolve.”