How pharmaceutical firms can shape the future of healthcare
Capitalizing on Precision Medicine
Precision medicine holds tremendous potential to remake the healthcare industry. By applying a deeper understanding of diseases with richer patient data and advanced analytics, precision medicine can help physicians tailor medicines to the needs of individual patients, rather than by broader populations, leading to better outcomes at potentially lower costs.
Strategy& has conducted a research 'Capitalizing on Precision Medicine - How pharmaceutical firms can shape the future of healthcare'. This survey of global leaders in the pharmaceuticals industry shows that companies are aware of the promise: 92 percent have identified precision medicine as an opportunity, and 84 percent have it on their corporate agenda. Most point to clear advantages in drug development, such as reducing time-to-market and making R&D processes more efficient. Even a conservative estimate puts the cost savings in drug development at 17 percent, leading to a potential annual savings of US$26 billion for the industry worldwide.
Precision medicine
Precision medicine represents both a business and clinical opportunity for multiple healthcare stakeholders.
Despite this bottom-line impact, however, most companies have yet to harness the full potential of precision medicine. External barriers include insufficient access to high-quality data, an unclear regulatory framework, a lack of standards, and data privacy issues. Internally, many companies lack the capabilities — particularly regarding the generation, integration, and analysis of non-trial-related patient data — that precision medicine requires.
These are not easy issues, yet pharmaceutical companies must begin to address them today. Rather than waiting for regulations and data standards to emerge, companies should actively work with regulators and policymakers to jointly develop standards.
Internally, most companies will need to partner with existing players and new market entrants that specialize in data, or possibly hire external experts. Either approach will require a new operating model and organizational culture — one that is more agile and responsive to changes.
Precision medicine will transform the entire pharmaceutical value chain, from early development to companies’ go-to-market models, and the next five years will be a crucial window for pharmaceutical companies to capitalize on this promise. Companies simply cannot sit on the sidelines during this period. Instead, they need to take risks and more actively engage with stakeholders throughout the healthcare ecosystem.
The future starts today
We expect the next five years to be crucial in establishing the playing field for precision medicine, the rules of the game, and who the competitors are. Accordingly, pharmaceutical companies need to begin taking action today. Among other imperatives, that means engaging and collaborating with key stakeholders as follows:
- Working with regulators in areas such as laying out the process for precision medicine–informed clinical trials, which will require much smaller patient populations
- Collaborating with payors to cover precision medicine — for example, by establishing real-world evidence of safety and effectiveness and thus determining the actual value of a treatment
- Incentivizing physicians by clarifying the advantages of precision medicine such as better outcomes for their patients at lower cost
- Educating patients on the benefits of this new approach to healthcare: more personalized treatments, reduced side effects, and the ability to prevent diseases more effectively
In sum, precision medicine represents not only a business opportunity but also a clinical opportunity. At a time of greater healthcare challenges, it is a clear means of using emerging technologies to deliver better care to patients. That, in essence, is the responsibility of pharmaceutical leaders. As one respondent in our survey put it, “Precision medicine will happen, and it’s better to be one of the shapers than a follower. Pioneering and taking risks to get on the train may afford greater opportunities than resistance or avoidance.” In other words, pharmaceutical companies can seize this opportunity — or ignore it and watch their competitors pass them by.
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