2017 in Life Sciences: The Transition to Outcome Based Care Continues
The 2016 year was another remarkable year for the life sciences industry. Global mergers and acquisitions continued, albeit not at the same velocity as previous years, with companies expanding their therapeutic offerings, improving their new product pipelines or leveraging low interest rates to drive increased value for their shareholders. Abbott’s acquisition of St. Jude Medical for over $30B and Shire’s buy of recently spun out Baxalta for $32B were just two of the noteworthy deals from 2017.
We also experienced the continued emergence of personalized medicines including immunotherapy as a leading oncology treatment. Immunotherapy uses the body’s own immune system to fight the cancer cells and have demonstrated significant improvements in extending the lives of patients diagnosed with the deadly disease. Further, because they utilize the body’s own immune system to fight the cancer cells, side effects are minimal.
On the political front, surprise victories to supporters of Brexit and the Republican Party in the US combined with Italy’s denouncement of political reforms left the industry wondering what will be required to compete in the global economy in 2017. Further, early comments from the President-elect in the US have created optimism for a reduction of the tax burden required to operate in the world’s largest healthcare market.
Additionally, global regulatory activity continue to grow across a variety of operational areas including serialization, unique device identifiers and identification of medicinal products as countries seek to ensure the safety of the patients while also ensuring transparency, and in some cases tax revenue, for any commercial activity. The continued legislative activity shows no evidence of slowing in 2017 and beyond.
In spite of all the change and uncertainty, 2017 should be a time of great opportunity. Never before have pharmaceutical or medical device companies seen the emergence of digital technologies that could have such far reaching impact on their products and solutions. Continued advances in genomic research are producing increasingly innovative and powerful products that target patients with specific genetic markers and will deliver superior outcomes over previous therapies. Further, as the level of sophistication grows around the acquisition, analysis and use of various data sources, we will begin to see consortiums of data, for example genomic, social, EMR, complaint and prescription data, emerge that will create insights that were never before possible.
Further, Life Sciences organizations must be prepared to reimagine their business models to create new products and solutions in response to all of the innovations and disruptions that will occur across the industry. R&D will utilize real world evidence in smaller, more precise clinical trials that will continue to monitor patient outcomes after regulatory approval to ensure they are providing comparable therapeutic outcomes that occurred during the trials. New personalized medicines, targeting smaller patient populations, will require reimagined supply chains to deliver unique products to a patient but will also incorporate a variety of players into the process including manufacturers, wholesalers, physicians, payers, pharmacists and family members that were previously not required or even possible.
Lastly, digital technologies will enable the new world of outcome based healthcare where Life Sciences organizations will be required to transform today’s product focused organizations into a more outcome and value focused enterprise. The payers require demonstrable evidence that a drug or product in the new world of Digital Health Sciences Networks is providing improved therapeutic outcomes for the patient or reimbursements will be reduced. This new paradox will transform the market and will begin to take hold in 2017.
Enjoy the holiday season and I look forward to seeing you in 2017!