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Would ‘Connected Healthcare’ Catch Pharma Players Off-Guard?

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Rapid advancement of medical science is making several life-threatening diseases easily preventable, curable and manageable. For some conditions, such as, peptic ulcer even surgical interventions are no longer necessary. This results in the expansion of preventive and primary-care segments, with equal speed. Simultaneously, increasing complexity of many diseases, late stage disease detection, and better identification of rare diseases, are broadening the specialty hospital segment, as well.

On the other hand, the general mindset of people is also changing as fast. They dare to chart in the cyberspace, seek for more health-information, prefer participative care, expect a speedy treatment process – delivering better outcomes.

The cumulative impact of these are creating some brilliant sparks, confirming evolution of some disruptive health care business models. These are quite different from what we generally experience today.One such model is termed ‘connected healthcare.’ This is a unique business model, having potential to break the decades old status-quo – for the benefit of patients – closely involving doctors, pharma – medical device/diagnostic companies and of course the hospitals. In this article, I shall deliberate on ‘connected healthcare’ looking at its various aspects and examining whether pharma industry is ready for this change. Let me start this discussion with the role of Internet of Things (IoT), as an enabler for this process.

Internet of Things (IoT) – A great enabler for ‘connected health’:

‘Internet of Things (IoT)’ has opened new vistas of opportunities for providing healthcare with significantly better outcomes. According to Ecoconsultancy, by leveraging the IoT network, medical devices of everyday use can be made to collect, store and share invaluable medical data, providing a ‘connected healthcare’ system. Consequently, doctors, along with patients, can get speedy and deeper insights into symptoms and trends of diseases for prompt interventions, even from remote locations. The question that follows: what really is ‘connected health?’

‘Connected Health (cHealth)’ and a teething problem:

‘Connected health or (cHealth)’ refers to the process of empowering healthcare delivery through a system of connected and interrelated computing devices, mechanical and digital machines on an IoT network platform. It provides the ability for seamless data transfer and access between patients and providers, without requiring human-to-human interactions to improve both quality and outcomes of healthcare.

Two more articles, one titled ‘Connected health: How digital technology is transforming health and social care,’ and the other ‘Accelerating the adoption of connected health’, both published by Deloitte Center for Health Solutions also described ‘Connected health (cHealth)’quite eloquently.

One of the papers highlighted, being a technology driven network system, cHealth has its own teething problems. Some of its key reasons include: Many physicians ‘are often reluctant to engage with technology, partly due to the scale and pace of changes, and partly through lack of education and training, and concerns over liability and funding.’

Precise value offerings of a ‘Connected Health’ system:

The Accenture study titled, ‘Making the Case for Connected Health,’ established that ‘connected health’ approach creates value at three different levels, as follows:

  • Clinical efficacy and safety - Eliminating duplicate lab and radiology tests; improving patient safety through 24/7 access to comprehensive, legible medical records; and speeding up access to patient medical histories and vital information – the cost of treatment can be reduced, significantly.
  • Shared knowledge - Improves care quality, benefits with prompt safety alerts, such as drug interaction, enhances clinical decision-making through sophisticated tools along with evidence-based care protocols, and helps acquiring new capabilities in health care.
  • Care transformation - Advanced analytics help sharing clinical decision-making process, population health management, and facilitate building new care delivery models.

‘Connected health’ in managing chronic diseases:

‘Connected health’ is being practiced at different levels in many countries. These are particularly useful in treating or managing chronic ailments, such as cardiovascular (hypertension), metabolic (diabetes) disorders and COPD (Asthma).  Some examples are as follows:

Many hypertensive patients monitor their blood pressure and other related parameters, through self-operating digital instruments and devices. If the auto-flagged readings get transferred to the treating physicians through IoT system, physicians can promptly adjust the drug doses and offer other required advices over the same system online, and as and when required or periodically. This could avoid periodic personal visits to doctors for the similar purpose, saving time and money. At the same time, it ensures better quality of life through the desired level of disease management, always.

Similar results have been reported in the management of diabetes and Asthma with ‘connected health’ system.

 ‘Connected health’ in treating life-threatening diseases, like cancer:

The paper titled, ‘Smart technology helps improve outcomes for patients with head and neck cancer,’ published by the News Medical on May 17, 2018, which was also read at the June 2018 Annual Meeting of the American Society of Clinical Oncology (ASCO), highlights some interesting developments in this area. This federally funded, randomized clinical trial on 357 people receiving radiation for head and neck cancer, using mobile and sensor technology to remotely monitor patient symptoms, resulted in less severe symptoms related to both the cancer and its treatment.

It also noted: ‘Patients who used the technology – which included a Bluetooth-enabled weighing scale, Bluetooth-enabled blood pressure cuff, and mobile tablet with a symptom-tracking app that sent information directly to their physician each weekday – had lower symptom severity than participants who had standard weekly visits with their doctors. In addition, daily remote tracking of patient wellbeing, according to the researchers, enabled physicians to detect concerning symptoms early and respond more rapidly, compared to usual care.’

While treating serious ailments, medical images, such as computed axial tomography (CT), magnetic resonance imaging (MRI), digital mammography and positron emission tomography (PET), can be connected, stored and shared with cloud-based connectivity and online sharing platforms, as confirmed by several studies. This would enable physicians to build better and deeper referral networks, for better diagnosis and speedier treatment inventions to patients.

‘Connected healthcare’ is fast growing:

As the above Accenture study indicates, many countries have started implementing  ‘connected healthcare’ systems to deliver cost-effective, high-quality and speedy healthcare services to the population with better outcomes. Some of these nations are, Australia, Canada, England, France, Germany, Singapore, Spain and the United States.

According to the New Market Research report titled, “Connected Healthcare Market – Global Industry Analysis, Size, Share, Trends, Growth and Forecast 2018 – 2022,” published by Wise Guy Research: ‘Globally, Asia-Pacific region is one of the fastest growing markets for ‘connected healthcare’. It was valued at USD 2.65 billion in 2015, and is expected to reach USD 23.8 billion by 2022, at the rate of 30.6% during the forecast period.’ During this span, ‘The global connected healthcare market is expected to reach $105,337.5 Million by 2022 at a CAGR of 30.27%,’ with North America commanding largest market share of 36.7%, the report highlights.

‘Connected health’ shows a high potential in India:

The above report also indicates, ‘mobile-health services’ accounts for the largest market segment in the UK, Italy, Japan, China and India. E-prescribing is the fastest growing segment in Asia Pacific and is expected to grow at the rate of 31.27% CAGR during the forecast-period.

E-Health initiative of the Government of India, which is aimed at using of Information and Communication Technology (ICT) in health signals a good potential for ‘connected health’ in India. Fast penetration of mobile technologies even at the hinterland of India will facilitate this process.

Another article titled, ‘Why Connected health is the key to reducing waste and increasing efficiency,’ published in Healthcare India on July 25, 2017, brings to the fore some key benefits of ‘connected healthcare’ in the country. It says, ‘connected healthcare’, can bring path-breaking changes in the country. Following are a few examples:

  • Today when almost 70 percent of the medical expenses are borne by the patient, a ‘connected health’ ecosystem, would reduce admissions by early intervention and potentially deter surgeries.
  • Having access to a patient’s entire medical record, physicians’ will be able to minimize ‘over diagnosis’, amounting to multiple tests, over-medication and avoidable prescriptions, thereby reducing out of pocket health expenditure of patients.
  • When patients are referred from one doctor to the other, or from the rural medical centers to district hospitals, they often need to repeat all the tests, as there is no connected health ecosystem. In doing so, they lose time and sometimes don’t show up for follow up treatments and consultations with their treatment remains incomplete.

Leading private players in ‘connected health’ area:

Some of the leading market players in the global ‘connected healthcare’ market, reportedly, include Agamatrix Inc. (USA), Airstrips Technology (San Antonio), AliveCore Inc. (Australia), Apple Inc. (USA), Athenahealth Inc. (USA), Boston Scientific Co. (USA), GE Healthcare (UK), Honeywell Life care Solutions (UK), Medtronics (Ireland) and Philips Innovation Campus (Bengaluru, India).

Would ‘Connected healthcare’ disrupt pharma’s legacy commercial model:

McKinsey Digital’s March 2012 paper titled, “Biopharma in the coming era of connected health” explains, how ‘connected healthcare’ has started disrupting the legacy commercial models of pharma and Biopharma industry. One of the related examples cited in the article is, pharma’s less emphasis on large sales forces “selling” to physicians.

As this new system gathers wind on its sail, information transparency will allow customers, regulators, and competitors to understand and independently assess the performance of various drugs, often better than what the manufacturers present. These powerful new data sources would reveal true efficacy of medicines, in the real-world settings. No doubt, it will be a significant patient empowerment.

Would pharma be caught off-guard?

Despite such clear signs of changes, the way the pharma industry continues to operate, which as perceived by a majority of the population, is generally self-serving in nature. It has remained virtually unchanged over several decades. Another strong public perception is, patients often get trapped by a two-way financial interest, existing between doctors, hospitals, pharma, biotech – medical devices/diagnostic companies, in various forms. Notwithstanding, industry lobbyists pooh-poohing it, it remains a robust general perception, nonetheless.

That said, this situation can no longer be allowed to remain frozen in time. Today, time is making many things obsolete, including human behavior and business practices, much faster than ever before. This gets fueled primarily by two catalytic factors – one, rapid progress of technology, and the other, which is even more fundamental – the changing demographic profile and social fabric. Together, these are creating a new, informed, more assertive and expressive mindset of people – signaling their needs, preferred choices and processes, even for a health care solution. It’s for the industry now to shape up, soon.

Conclusion:

Joining all these dots, one gets a clear sign of ‘connected healthcare’ gradually evolving in India. Even if, it still takes some more time for an integrated ICT system to be in place, especially in India, it’s for sure that ‘connected healthcare’ will be a reality, surely.

As and when it happens, it will be a disruptive process. The process of sharing all requisite disease prevention, treatment and management related data, between patients, doctors and other care providers, including pharma companies – over regulatory approved, interconnected IoT enabled devices, machines and applications, will benefit all.

There will, of course, be several barriers to overcome, before this new era ushers in. One such hurdle being, many doctors still don’t express a favorable attitude towards adoption of ICT technology in their everyday practice. Alongside, the government with the help of regulators, should enact the requisite laws, and frame stringent rules to ensure enough privacy and security of confidential medical information of individual patients. In tandem, appropriate authorities must ensure that ‘connected healthcare’ system is effectively implemented by all concerned.

As strong environmental needs will hasten this process, public access to high quality healthcare with better outcomes – and all at an affordable cost, will improve by manifold. Thus, I reckon, days aren’t too far to witness ‘connected health care’ in India. But, the hundred-dollar questions still remain unanswered – Are most pharma players ready for the ‘connected healthcare’ regime, or will it catch them off-guard?

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.

Creating ‘Shared Value’ in Pharma – The Way Forward

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Many Pharmaceutical companies, both global and local, are struggling with a plethora of critical challenges. With the industry reputation diving south successful navigation through this headwind has become an onerous task, more than ever before.

Under this backdrop, the article, titled “Creating Shared Value” of Michael Porter and Mark Kramer, published in the Harvard Business Review (HBR) in its January – February 2011 issue, becomes very relevant to analyze the situation.

The paper says: “Companies are widely thought to be prospering at the expense of their communities. Trust in business has fallen to new lows, leading government officials to set policies that undermine competitiveness and sap economic growth. Business is caught in a vicious circle. A big part of the problem lies with companies themselves, which remain trapped in an outdated, narrow approach to value creation.”

The authors also articulated that pharma players, generally focus on optimizing short-term financial performance, overlooking the greatest unmet needs in the market as well as broader influences on their long-term success. They questioned: “Why else would companies ignore the well-being of their customers and the economic distress of the communities in which they produce and sell?”

Porter and Kramer advised the companies to bring business and society back together – redefining their purpose as creating “shared values”. It means generating economic value in a way that also produces value for society by addressing its challenges.In this article, I shall explore in this area.

Not CSR or Philanthropy, its engaging business as business, for social progress:

Creation of “Shared values” for a business is quite different from “Philanthropy” or “Corporate Social Responsivity (CSR)”. Philanthropy usually involves ‘donations to worthy social causes’ and CSR is primarily directed at compliance with community standards and good corporate citizenship. Whereas the creation of “shared value” means integrating societal improvement into economic value creation, making social improvement as an integral part of with a business model.

To create “shared values”, it is imperative for business organizations to create “social value” through active participation in addressing the social issues and needs related to the business. Or in other words, the creation of “shared values” would entail striking a right balance between “social value” and the “business value.”

An article titled “What Is the Social Value of Pharmaceuticals?”, published by FSG on February 13, 2014 dwells on the business relevance of creation of “social value” in the pharma industry. It writes,creation of “social value” corresponds to effecting positive change along the major societal challenges, such as affordable health care, by working more in collaboration with other stakeholders to address the needs of the underserved through commensurate value creation. This entails engagement of a business as a business, not as a charitable donor, nor through public relations, for social progress.

A resolution to create “shared value” in the pharma industry:

An interesting article, featured in SFGATE of the San Francisco Chronicle on July 11, 2018, elucidated that the reputations of drug makers have taken a hit over the past few years as the public and politicians have called out the companies for high prescription drug prices that even Americans are facing. Recently, President Donald Trump, reportedly, singled out the top pharma companies of the world  for raising the list prices on some of its prescriptions.

Possibly it’s a sheer coincidence, but on the same day, an intent of creating “shared values” with the society got reflected in the statement of the president of the Novartis Institutes for Biomedical Research. The officialexplained, why his company has a ‘contract with society’. He admitted that: The cost of health care, which has been rising has left many on the hook for a larger amount of their prescription drug cost that can place a big burden on patients in many countries, including the United States.

Consequently, the pressure from the people who need medications is now on the pharmaceutical companies for doing right, he added. Thus, Novartis feels:”We have a contract with society, and society is our shareholder. A company like ours exists to have a definitive impact on life threatening diseases, to keep people alive and healthy for a long, long time, full stop” – the official concluded.

A laudable intent, but is it credible?

The concept of pharma having a contract with the society ‘to keep people alive and healthy for a long, long time,’ is laudable, but is it credible? This question arises because, just before public articulation of this intent, the same company, reportedly, entered into USD 1.2-million contract with President Trump’s lawyer, Michael Cohen, allegedly, to provide access to the US President.

The exact reason for the same is being investigated by competent authorities, including the US Senators. However, another report highlighted, “Novartis is among the drug companies that has put through significant price increases for its products since Trump took office in 2017 – in some cases more than 20 percent.”

Another  repot of July 09, 2018, quoting a tweet of the US President, poured more cold water on the warm intent of pharma’s ‘contract with the society.’ According to this article President Trump tweeted: “Pfizer & others should be ashamed that they have raised drug prices for no reason. They are merely taking advantage of the poor & others unable to defend themselves, while at the same time giving bargain basement prices to other countries in Europe & elsewhere. We will respond!”

Consistently declining pharma’s image and public trust:

Many believe that due to such hyperbolic statements and conflicting actions of pharma, over a long period time, are driving down the public image and trust on the industry, in general, from deep to deeper level, which has not found its bottom, just yet.

The reality gets reflected in various well-recognized polls, conducted even in the top pharma market of the world, which is also one of the richest nations, globally. August 2017 Gallup Poll on ‘Business and Industry Sector Ratings,’ features pharma industry at the very bottom of the ranking, just above the Federal government.

The concern gets reverberated in the February 03, 2017 article titled, ‘How Pharma Can Fix Its Reputation and Its Business at the Same Time,’ published in the Harvard Business Review (HBR). The paper observes that the worrisome mix of little growth potential and low reputation prompts the pharma players, among other actions, developing new treatments for neglected populations, and pricing existing products at affordable levels – avoiding corruption and price collusion.

How will “shared value” creation help pharma?

The process of creating “shared values” will involve creating “social value” with all sincerity and a clearly defined purpose. Its outcome should be measurable, and the impact felt by the society. In tandem, striking a right balance between “social value” and the “business value” would call for a metamorphosis in the concept of doing business.

There aren’t too many examples of creation ‘shared values’ by pharma companies, yet. However, to illustrate this point, let me quote one such that was originated from India, which I had the privilege to observe closely. This initiative is ‘Arogya Parivar (healthy family) of Novartis in India.

‘Arogya Parivar’ is a ‘for-profit’ social initiative developed by Novartis to reach the under-served millions living at the bottom of the pyramid in rural India. As Novartis claims, since its launch in 2007, ‘Arogya Parivar’ is proving to be both a force for improving health in rural communities and a sustainable business. ‘Arogya Parivar’ is a commercially-viable program and began returning a profit after 30 months with sales increasing 25-fold, since launch. After successful implementation of this initiative in India, the company has created similar programs in Kenya, Indonesia and Vietnam, according to Novartis.

Conclusion:

The concept of ‘shared values’ emphasizes that business success of a company is closely related to the progress, development and wellbeing of the society where it transacts the business. This can be achieved by striking a right balance between the social need and the business need. In the pharma space too, the value creation in the business value chain may need to be redesigned to meet the ‘social value’. This happened as in the case of ‘Arogya Parivar’ initiative of Novartis in India.

Creating robust business models based on ‘shared values’, in sync with the business-specific needs of the society can help make more profit in areas where there is none, at present. It will also facilitate achieving additional growth of the organization and improve long-term competitiveness.

Consequently, pharma can earn recognition of the society as a powerful contributor for containing suffering and even death of many ailing patients, by increasing access to affordable medicines for those who need these most. This, in turn, would help pharma companies to improve their public image and reputation. Let me hasten to add that provided, of course, no countermeasures are taken by them, surreptitiously, as I have discussed above.

The good news is, some pharma players have already initiated action in this direction. Thus, I reckon, many of them would soon realize that creating ‘shared value – based’ business models are the way forward for sustainable business excellence.

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.