Wish You And All Your Near And Dear Ones Peace, Happiness, Good Health And Prosperity in The Brand New Year 2016 

The year 2015 witnessed several noteworthy developments in the pharma industry, just as many other years before. That said, in my view, a few of these happenings were much more impactful, and probably took place for the first time ever, in the year just gone by.

Obviously, one such major development is the overall serious adverse impact on the image of the pharma industry, in general. 

During 2015, the image of the pharma industry got further tarnished by reports of high-profile alleged drug price manipulations. This avoidable saga culminated with the arrest of a pharma Chief Executive Officer (CEO) in the United States, amid a federal investigation, in December 2015.

However, I am not going to dwell on this issue in this article. Instead, I shall select some key strategic pharma business areas, which contribute to the largest chunk of the total overall cost, incurred by the global pharma industry, every year. These areas, as I see, are:

• Drug discovery research
• Sales and Marketing
• Supply Chain
• Development of new drug delivery systems
• Patients care and engagements

I have put all these points in the above order, just for the convenience of my discussion in this article. 

With a few examples, I shall give my perspective on these areas of the global pharma industry, dividing them broadly into the following two sub-categories: 

• Areas where the industry could have done a lot better
• Areas where the industry made significant progress

The Pharma industry strategy continues to remain broadly traditional:

Pharma sector is globally considered as an industry, which appears to be more comfortable in maintaining and harnessing its traditional approaches, in almost all its field of activities. Although, some tweaking has certainly been taking place, which are primarily to automate or digitalize the same process, aimed at adding more speed together with virtually real time monitoring of operations.

Let me hasten to add here that, some major and newer types of modern tech based collaborative initiatives with large companies outside the pure pharma space, have also been reported, during the year.

I shall deliberate on both these areas, one after another, hereunder. 

A. Areas where the industry could have done a lot better:

Drug discovery research:

With the increasing impact of patent cliff and low productivity in drug discovery research, coming alongside big ticket generic threats, many pharma players seem to be still tweaking with its traditional blockbuster drug discovery model, in 2015.

Slightly changing from this traditional strategic focus, many of them have now started focusing more on ‘Orphan Drug’ research, though with indication of a life threatening disease with low prevalence, intending to go whole hog for very high pricing of these drugs.

By gradually adding more indications, these innovator companies plan to make the ‘Orphan drug’ molecule a money churning blockbuster drug. As a result, the number of venture capitalists, who invest in the early stages of such drug development, has increased significantly in 2015.

According to reports, over 40 percent of all approved orphan drugs are meant for high risk cancer sub-categories with low prevalence rate. Although these drugs are for lifetime treatment, the medicines are frightfully expensive, costing between US$200,000 and US$300,000 per year, for each patient. 

Intriguingly, still a very few drug companies are externalizing drug discovery research or even considering on a large scale, the use of the ‘Open Source’ drug discovery model, which is currently widely used in the Information Technology (IT) industry, as one of the main platforms to get new products.

Sales and Marketing:

Similarly, in the pharma sales and marketing space, there has been no game changing developments, during the last year.

Although, some initiatives that can at best be termed as tweaking on the traditional pharma methods, were visible, especially in the fields of digital marketing and e-detailing. The good old and much tried traditional tools, such as, Medical Representatives’ (MR) product detailing to individual doctors or a large number of ‘medical seminars’/ ‘continuing medical education’ events, of varying scale and dimensions, arranged for the medical practitioners, still ranked at the very top of this domain. 

Here, again, no signs of a paradigm shift were visible to me during the year, nor do I reckon, any game changer is likely to surface, any time soon.

Supply chain:

The immense importance of ‘Supply Chain’ in the overall pharma business does not appear to have been properly understood by the drug companies up until 2015. This has been well vindicated by various credible studies. I would refer below just two of those: 

The Chief Supply Chain Officer Report of September 2014, highlighted that just 39 percent of pharmaceutical respondents see the ‘Supply Chain’ as an equally important part of business success as R&D or sales and marketing. Whereas, 68 percent of consumer packaged goods’ respondents believe that leveraging the true potential of this domain, is one of the key requirements for business excellence.

This is noteworthy, as even ‘The McKinsey report’ of September 2013 stated that supply chains now account for around 25 percent of pharmaceutical costs. The annual spending on it is so staggering of around US$230 billion that even minor efficiency gains in this area could free up billions of dollars for investments elsewhere.

Instead of following its traditional approaches, if the pharma sector adopts even straightforward advances, well established in other industries, the total costs could fall by US$130 billion, ‘The McKinsey report’ estimates. 

Ideally, pharma ‘Supply Chain’ should be considered not just a means of getting the products at the right place, at the right time and in the right quantities, but also as a means of delivering additional value to the customers. This can be achieved with radical strategic intervention in this space with the application of the state of art technology, which was still broadly lacking in 2015. 

B. Areas where the industry made significant progress: 

In this section, by citing examples on two other important strategic business areas of the pharma industry, where significant progress has been reported during 2015, I would try to drive home my point. These two areas are new drug delivery systems and patient care/engagement.

New drug delivery systems:

On the development of new drug delivery systems, some interesting collaborative arrangements have been reported in 2015. As illustrative examples, I would cite just the following two: 

A. “Smart Inhaler”

I have picked up this important area of a new drug delivery system, out of many, as it fascinates me immensely. Here again, I would illustrate my point with just two examples – out of several others, as hereunder:

1. On December 2, 2015, the British drug major GlaxoSmithKline (GSK) reportedly entered into a technology deal with Wisconsin-based Propeller Health. Under this collaboration, Propeller will create a custom sensor for GSK’s Ellipta inhaler. The Propeller platform combines sensors, software, and care team services to improve patient outcomes by providing more insightful and efficient care. GSK is the second largest pharmaceutical company to partner with Propeller Health, which in December 2013 announced a deal with Boehringer Ingelheim to develop a custom sensor for BI’s Respimat device.

2. In September, 2015, Teva Pharmaceuticals reportedly acquired Cambridge, Massachusetts-based Gecko Health Innovations, a smart inhaler company.

Gecko’s main product is a platform for chronic respiratory disease management that also combines a sensor device that connects to most inhalers, a data analytics platform, an accessible user interface, and behavioral triggers to help asthma and COPD patients manage their condition, more effectively.

B. Sanofi and Medtronic strategic alliance in diabetes to improve patient experience and outcomes

Although not many large scale commercial ‘drug discovery’ initiatives based on the ‘Open Source’ model is still not known to me, in the ‘new drug delivery system’ area, a major global strategic alliance, between Sanofi and Medtronic in the diabetes therapy area, has been reported based on this model. This alliance is aimed at improving patient experience and outcomes for persons with diabetes, around the world. 

As I mentioned, the alliance structured as an ‘Open Innovation’ model, will initially focus on the following key priorities:

• Development of drug-device combinations
• Delivery of care management services to improve adherence and simplify insulin treatment
• Help people with diabetes better manage their condition

Patient engagement and care:

Quite encouragingly, in the ‘patient engagement and care’ area too, some of the global pharma majors have taken notable tech-based strides during 2015. Some of these laudable ventures are as follows:

A. Novo Nordisk and IBM partner to build diabetes care solutions on the Watson Health Cloud

According to a Dec. 10, 2015 ‘Press Release’, Novo Nordisk and IBM Watson Health agreed to work together to create diabetes solutions, built on the Watson Health Cloud.

Under this agreement, by harnessing the potential of the Watson Health Cloud, Novo Nordisk aims to further advance its offerings to people living with diabetes and also their health care professionals.

B. Sanofi collaborates with Google to Improve diabetes health outcomes

Less than a couple of months before the Novo Nordisk – IBM partnership agreement, by a Press Release of August 31 2015, Sanofi and Google announced their collaboration to improve care and outcomes for people with type 1 and type 2 diabetes.

According to the release, this collaboration will explore how to improve diabetes care by developing new tools that bring together many of the previously siloed pieces of diabetes management and enable new kinds of interventions. This includes health indicators such as blood glucose and hemoglobin A1c levels, patient-reported information, medication regimens and sensor devices. 

Is the word “Innovation” also being used as a façade?

This important, though contentious issue, is being raised by many today, globally.

In my view, global pharma even in 2015, continued making the mistake of repeatedly highlighting, with high decibel sound bytes that the stakeholders do not understand the value, importance and necessity of innovation, which in any case is far from the truth. Nevertheless, It kept using, rather more misusing, this important word too often to cover up any action of theirs that faced government, general public or media scrutiny.

Additionally, many pharma players seemingly continued to remain contented with a very narrow definition of the word ‘innovation’, limiting its application mostly in the traditional space of drug discovery. While at the same time, many other smarter and more astute innovators, especially in the IT world, besides Google, IBM and Apple, started stepping into the vast healthcare arena, which otherwise could possibly have become pharma’s expanded market.

A am quoting below the names of just five of these amazing innovators, from the published data, just to give you a feel of this interesting area of ‘innovation’ in the health care arena:

• Medivation: For finding the value of treatments that others ignored
• Beijing Genomics Institute: For making DNA sequencing a mass-market
• Medisafe: For using wireless and cloud technology to improve drug adherence
• Ginger.IO: For harnessing behavioral data to save lives
• Setpoint Medical: For creating a built-in pain-relief platform 

Epilogue:

Overall, the year 2015 was a mixed bag for pharma. Many pharma players, I reckon, displayed their self serving intent in a more glaring manner. Several captains of this industry generally talked all right things, which are music to many ears, but mostly acted quite differently, going against the public health interest, as reported by the global media.

Many pharma companies continued trying to woo the media cleverly during the year. Some of them, reportedly, even sponsored trips of a few Indian journalists to their respective overseas headquarters. As I understand, many newspaper readers too, had noticed the small print disclosures in this regard, at the bottom of their stories on those companies, written on the return.  I have no intention to be judgmental on such trips. Nevertheless, the global media, including the Indian media, by and large, reported all such deeds, with as much detail as possible, without slightest hesitation.

Encouragingly, a few global pharma majors, such as, Sanofi, Novo Nordisk, GlaxoSmithKline and AstraZeneca challenged this contusing status quo in 2015. They seem to dare to chart into the much uncharted frontier to squarely face the challenge of the changing demands of the changing world order. Probably not so much by trying to change others, but mostly by changing themselves. 

It appears, at least, the likes of the above global players have started accepting the new expectations of the aspiring customers and their fast transforming mindsets, including, the tougher governments enacting contemporary laws and regulations in many countries. In tandem, the exorbitantly high cost and usually low profile advocacy initiatives of drug companies seem to becoming lesser and lesser productive, as evident by the increasing number of avoidable issues that the pharma industry is now facing. Added to all this, a modern and major force-multiplier, in the form of social media, has now started unleashing its unfathomable power of shaping laws, regulations and even public opinion.

I wish this wind of change gaining more speed in 2016, and in that process, ushers in the long awaited dawn of a new paradigm. A paradigm of justice and equity in health care for all, across the world, and especially to my own country – India.

By: Tapan J. Ray

Disclaimer: The views/opinions expressed in this article are entirely my own, written in my individual and personal capacity. I do not represent any other person or organization for this opinion.