Posts Tagged ‘medical outcomes’

Making Pharma “Fit for Purpose”

While in London recently for a series of meetings, I repeatedly heard the English phrase “fit for purpose.” It’s become a cliche for many in England, but I was struck by its syllabic crispness and brevity.

DarwinThe idea of “fit” makes me think of Charles Darwin’s theory of “survival of the fittest.” The fittest are those who are best able to adapt to changing environments, or in the case of a business, a changing market. Successful companies survive, transition, evolve, exploit and pivot over time. They are fit for purpose.

It is not the strongest of the species that survives, or the most intelligent. It is the one that is most responsive to change.

Motorola as a cautionary tale
Recently, there was media coverage about how Motorola has essentially died. It was slowly broken into pieces and sold off to various other companies. Google bought its cellphone business, Motorola Motions, for $12 billion a few years ago, and just unloaded it to Chinese PC manufacturer Lenovo for $2 billion. Ouch.

At one point in time, Motorola owned 60-70% of the cellphone market, had 150,000 employees and was one of the leading tech innovators in the world. They’re the ones who brought the mobile phone to the masses. They invented the police radio. They invented the car radio. They commercialized independent satellite communication.

There was a lengthy period of time during which everyone would have assumed that Motorola would be around forever. Until they weren’t.

There was an era when Motorola was fit for purpose. Until it wasn’t.

Motorola was a product company with a legacy of good R&D and solid commercialization, but they lost touch with what customers wanted. It’s an important cautionary tale for all of us.

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Pharma: Build “Around the Pill” not “Beyond the Pill”

For several years, pharma has attempted to move “beyond the pill” to offset declining product pipelines. The dream is to find new revenue opportunities. New business models.

But as we’ve seen, these new products and service experiments are rarely commercialized. If you study the revenue mix on any pharma P&L statement, you’d be hard pressed to find any real revenue beyond pills.

So, what’s the problem?

Well, it’s not just pharma. Successful new businesses that launch in the shadow of large legacy product portfolios are rare in any industry.

$100 Million or Bust
A few years ago, I was working with a global CPG company with a vibrant innovation team. But the success bar for moving a new idea or business model out of the lab was having visibility to least $100 million a year in revenue. Soon.

This meant that only the most obvious, non-risky ideas got the capital needed to grow. Promising but speculative projects were left to die on the vine.

So the challenge of commercializing innovation is not unique to pharma, but that doesn’t let us off the hook. There is an urgency to figuring this out.Around the pill

The Urgency has Changed
A few years ago the focus was on finding new ways to backfill declining revenue from the patent cliff. But now the product pipelines for biologics and new orphan drugs for rare diseases could not be more robust. Revenue is growing again.

The real reason for today’s urgency is not revenue, it’s the changing customer environment. We now have the need to not only prove outcomes but to improve the patient experience. Soon.

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The Two-Edged Sword of Healthcare Reform for Pharma

The Economist recently published a report on the cost impact of healthcare reform in the US.

Healthcare Spending TrendsThe data shows that the fundamental idea of bending the cost curve by changing the way healthcare is reimbursed — moving from a fee-for-service to a fee-for-outcomes — is actually working. Hospitals are actually doing fewer unnecessary tests than they previously did. According to the report, before Obamacare, hospitals did as many tests and procedures as they could, because that’s how they made money.

Now that the focus is on patient outcomes —  keeping patients out of the hospital and feeling better after they’ve been discharged — costs are going down. Bundled payments for procedures is limiting out-of-control expense growth.

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Three pharma trends from the 2015 J.P. Morgan Healthcare Conference

I attended the J.P. Morgan Annual Healthcare Conference a few weeks ago. Think of it as the CEO version of SXSW for all things big pharma, biotech, health insurance, health tech and large healthcare providers. In four days you drink a fire hose of 30-minute reports from CEOs and their CFOs that together paint a detailed portrait of the financial and scientific outlook of the industry. (i.e., many “forward-looking statements.”)

JPMThe Solvadi Effect
As I was listening to the executive presentations, I began to pick up on three important trends. First and perhaps most importantly, I sensed that the industry is really committed to finding cures. Call it the Solvadi Effect.

Historically, the objective has always been to delay death, but now everyone seems inspired by the power of Gilead Science’s new product to cure hepatitis C. This is a much better clinical outcome than the generic alternatives with their nasty side-effects. Pharma leadership, particularly biotech executives, used the conference venue to declare their commitment to finding cures for diseases, with special attention placed on Alzheimer’s, Parkinson’s, MS and hepatitis.

Business Model Flip
One reimbursement policy implication is that over the next 5 to 10 years we could potentially see the pharma/healthcare business model flip from delivering moderately priced drugs that chronically-ill patients take for the rest of their life to a new model in which therapies might cure a disease in a short period of time, but with a very high price tag. For example, the business and social contract is already changing from supplying a generic drug that someone with hepatitis C would take for the rest of their life to a drug can cure the patient in 12 weeks, but will cost $86,000.

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Wrapping Services Around Products: The New Pharma Model

“The home is ultimately going to be the major site of care for all but the sickest patients.”

This from an interview with George Halvorson, CEO of Kaiser Permanente, in which he expounds about healthcare reform and the vertically integrated model that is Kaiser.

Essentially, he’s saying that we will move from the traditional office-centric model to a new approach using technology like e-visits, e-connectivity, remote patient monitoring and smart phone apps to support home-based healthcare. Technology will be the backbone of patient care in a world in which more people are covered by health insurance and there is a shrinking population of primary care physicians

Technology and Patient Empowerment

Halvorson’s remarks suggest that the trends we’re seeing in patient empowerment, like The Quantified Self and websites like Patients Like Me, are all part of a future in which we won’t spend time in a hospital unless we are really sick. And we may actually be spending less time in a doctor’s office, too.

This brings up many questions. What does this mean for prevention? For treatment? How do we use technology to enable people to live healthier lives so that they don’t even need to use the healthcare system? And, ultimately, when we do need the healthcare system, how do we support the home environment to provide for effective treatment?

And what role will pharma play in an integrated healthcare delivery model?

prod serv 2The New Reality for Pharma
This comes back to a theme that I’ve talked about in the past. There is an important role for pharma in this new reality, but it means a change in identity from product manufacturer to healthcare services. Pharma has an opportunity to play a larger role in health services that enhance the value of the products it already provides.

Examples of Products + Services
For example, Google’s basic product, online advertising, provides most of its revenue. But they’ve surrounded it with all kinds of free and interesting analytical, coaching and survey tools. Google offers many of these services for free, like Google Analytics. These aren’t simple “freemium” products, however. They are serious tools. But Google knows that offering them for free enables adoption by the very people they want as customers, thus enhancing the value of their core business.

Brokerage firms make their money on investment products and trading. But they often offer free advisory services and retirement counseling to help clients build retirement models.

Banks are another example. I had a meeting a few weeks ago with a banker who was an also expert in health insurance plans. He had been hired specifically to advise the bank’s clients on innovative health insurance plans and models – advice that I would have had to pay for had I gone to a consultant. But the bank felt this was a service that they should offer their customers, wrapped around the core banking products where they make most of their money.

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Three Key Strategies to Drive Better Patient Care

When it comes to health technology and new mobile apps, we often jump right into a discussion about cool features and social media. But the real question should be impact. What positive impact are we having on patients and their physicians, the ultimate gatekeepers?

The bottom line for most physicians is efficiency: “How can I be more productive with the time I have with my patients given the clinical load I carry?” Therefore, a good place to start in any technology impact discussion is how to enhance the physician-patient interaction to make it better and more efficient.

There are three important activities that influence physician efficiency:

 1) Precise diagnosis of ailments

 2) Patient education support

 3) After-care compliance and home monitoring

These are also three activities that can have a significant influence on patient outcomes.

All three of these are time-consuming but critical activities, and all of them can benefit greatly from technology.

1) Precise Diagnosis

Stopwatch1During the typical 15-minute office visit, in addition to collecting as much medical and family history as possible, physicians will review a patient’s symptoms. Very often they’re listening for that random clue that might influence the diagnosis, something that maybe the patient hasn’t thought of or hasn’t remembered since the last office visit.

When a patient walks in a doctor’s office, particularly if they don’t have a caregiver with them, they often are stressed and very often forget or misread symptoms that might have happened at home. It’s kind of like when you take your car into the shop and suddenly that engine knock isn’t there anymore, and the garage guy rolls his eyes and tells you to bring it back when there is a real problem.

Technology can play a supportive role here by capturing a wide range of patient symptoms as they are experienced at home, at work or socializing with friends.

One solution to this challenge is an mHealth (mobile health) iPhone-based symptom tracker. A mobile app can capture relevant patient experience data and efficiently provide it to the physician to inform the diagnosis – information that the patient might not even remember or consider important. By providing additional diagnostic clues, a symptom tracker will enhance the conversation about health between the physician and patient.

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On Getting Nimble

As pharmaceutical companies attempt to become more nimble and decisive, senior leadership will need timely access to relevant data, insight and recommendations. Brands can no longer wait months for campaign activity reports or ROI analysis. Senior product managers feel the pressure to make mid-game go/no go decisions and to reallocate marketing budgets even before a campaign is complete. This urgency requires a level of real-time access to data, ad agency transparency and partner collaboration that is still uncommon in this industry.

big data delugeThe attention that “big data” has been getting is warranted, but to date, most of the large data sets still reside in their respective marketing silos. The coming year will begin to see integration of marketing and response data across agencies, data partners, and internal IT, offering product managers and their bosses a real-time insight sandbox. This will require a new reporting framework that will increase transparency and accountability both internally and externally and give managers the ability to make smarter and more timely investment decisions.

Think this is a discretionary, nice-to-have capability? Think again. The music has changed. The reality of health care reform has set into motion a myriad of changes that will have a major impact on pharma, especially for those companies not nimble enough to dance to the new soundtrack.

Proxies will have to do

During a recent planning call for a patient disease management program the discussion turned to metrics. Key to any program design is agreement on what outcomes will be measured and what will be deemed success. It makes no sense to launch a program without developing goals about levels of engagement, target clinical results, and ultimately financial payback.

So far so good, right?

Until we moved beyond vague generalities about impact and tried to identify the actual sources of patient data that would validate the program.

  • “We only get about 10% of the patient lab results we request.”
  • “We attempt to get physicians to attest to patient check-ups in writing, and you know how that goes.”
  • “Legal has deep concerns about merging patient data sources.”

So how then do these brands continue to sell expensive patient programs without validated outcomes?

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