“Applying big-data strategies to better inform decision making could generate up to $100 billion in value annually across the US health-care system, by optimizing innovation, improving the efficiency of research and clinical trials, and building new tools for physicians, consumers, insurers, and regulators to meet the promise of more individualized approaches.” – A McKinsey Global Report
In recent years, the pharmaceutical industry has faced declining R&D productivity, a rapidly changing healthcare landscape and fierce competition from generics resulting in lower growth and profit margins. Historically, drug development focused on clinical trials management and outcomes. Now however, the industry is looking at more holistic approaches to improve processes to bring new products to market that can accelerate product development while lowering operational costs. This is challenging because of the complex value chain and business processes required in this highly regulated environment.
Additionally, it has proven difficult for the industry to effectively adapt since many pharmaceutical companies are simply not optimized for cross functional collaboration which is so desperately needed to support these changing market conditions.
One meaningful and holistic approach to today’s current challenges within the pharmaceutical industry is to focus on Product Lifecycle Management (PLM), which is a business transformation approach to manage products and related information across the enterprise and across the product value chain. Traditionally, the product value chain is categorized as development stage, commercial stage and late stage. The components of these stages include ideation, research, pre-clinical and clinical studies, approval, marketing and sales and market expansion.
In recent years PLM has evolved into the concept of product lifecycle optimization (PLO), which is optimizing the investment and returns across the product value chain. PLO has provided organizations with ways to increase their ability to get products to market quicker, ensure greater regulatory compliance and reducing development costs, make appropriate, timely and strategic decisions to maximize cumulative efficiencies across the organization.
However, the pharmaceutical industry is viewing this as an additional burden on its financial and human resources. Besides the increasing costs of regulatory compliance, the industry is facing the challenges of keeping R&D costs low despite deteriorating health outcomes. Hence, to effectively counter the financial pressure and justify the increased cost, the industry is increasingly using data analytics to complement and drive the product life optimization. There are varied methods of analytics used across the different domains based on their data needs. The tools currently used in the pharma industry range from basic reporting dashboards to high-end predictive and prescriptive analytics. These tools provide a comprehensive overview of the complex interplay between scientific development, market trends, financial constraints and budget optimization. Few of the examples include market need assessment, health economics and outcome research (HEOR), policy environment and impact analysis, regulatory environment assessment, impact evaluation of marketing strategies and thought leader (TL) assessment.
- Market assessment is a qualitative and quantitative evaluation of the external environment and internal resources which includes looking into the market size, various customer segments, buying patterns, competition, economic environment (in terms of barriers to entry), regulatory environment, unmet needs and others
- Stage-gate analysis is another upcoming method that is being use along with market assessment as a complementary technique for new product development and processes. The stage gate process tends to guide the new product development process through various developmental stages such as idea generation, clinical trials and launch. Between stages, a gate is used to determine whether the investigational product should move to the next stage or be kept on hold or even terminated. This decision is taken by a steering committee based on the business case, the risk analysis and other production factors including the cost, human resources and market competency.
- With increasing access and utilization of healthcare, organizational, financial, human, R&D and commercial resources become more restricted, and prioritization in healthcare becomes unavoidable; creating a gap between the payers and market access strategy. To bridge this gap, health economics and outcome research (HEOR) comes handy. HEOR is a discipline that is used to complement traditional analytical methods to guide decision makers regarding patient access to drugs and integrate payer point of view in the commercial strategy
HEOR can provide data and evidences to help healthcare payers determine if treatments work in the populations they serve and how much of the drug or treatment cost should be reimbursed by the healthcare system. There are various HEOR tools which can be used depending on the need and feasibility of evidences required. These tools include epidemiological studies, cost-of-illness analysis, cost-minimization, cost-effectiveness, cost-utility and cost-benefit analyses.
In addition, several global reimbursement agencies formally ask for HEOR evidences as a part of their standard assessment processes, including the National Institute for Health and Clinical Excellence (NICE) in the United Kingdom, some of the Spanish health technology assessment (HTA) agencies, the Korean Health Insurance Review Agency and the Health Intervention and Technology Assessment Program in Thailand. However, currently the healthcare payers in the United States do not have a standardized process for requesting or for using HEOR data.
- Real word evidence (RWE) is the cornerstone of value-based pricing methods that supplement competition and access in the coming future. Researchers from the FDA define RWE as: “Healthcare information derived from multiple sources outside of typical clinical research settings, including electronic medical records (EMRs), claims and billing data, product and disease registries, and data gathered by personal devices and health applications.” They acknowledge that these data sets can effectively complement the knowledge gained from “traditional” clinical trials and generate broader scientific and commercial insights in real life situations.
- Traditionally, the industry and pharma marketing focused on growing market share as the benchmark to evaluating the success of a product. Recently, the trends have shifted towards evaluating the increasing influence of payers, provider organizations and patients. Hence, besides the common metrics of successful marketing strategies, there is a growing focus on prescribe analysis, claims data, dipstick survey and thought leader alignment and engagement.
Thus, as we move towards collating the resources to justify the investments, the sophisticated methods of pharma analytics offer a powerful toolbox. Understanding these analytical methods and using them at the right stages helps to ensure that companies grow and continue to define success in the long run.
About PharmaACE:
PharmaACE Analytics is a USA headquartered pharma analytics and consultancy firm focused on delivering customized solutions. We cater to a diverse clientele including top pharma companies, market leaders in the drug delivery device industry and radio pharmaceutical companies, among others. We provide end-to-end holistic solutions encompassing Market Research, Competitive Intelligence, Data Management, Reporting and Analytics, Market Assessment, Forecasting, Technology-enabled solutions, Online Forecasting Platforms, App Developments and other custom solutions. We are a diverse multi-disciplinary team of physicians, pharmacists, biotechnologists, life-science and management professionals, statisticians and digital engineers with experience across verticals and markets of the healthcare industry such as sales, analytics, project management.