The pharmaceutical industry has entered the New Year with a massive demand for digital products amid intense inspection and hostility.
As a result, the industry is charged with resolving the dynamics of the current situation in order to remain successful this year. Further, the industry also needs to enhance healthcare and benefits for everyone involved.
The highlights for 2015 are as follows:
- Launch of Novartis/Sandoz's Zarxio – introduction of pioneering biosimilar drug that was approved by the FDA
- Record mergers of pharmaceutical companies – Teva acquired Rimsa (for approximately $2.3 billion) and Allergan acquired Kythera Biopharma
- Unprecedented price hikes – remember Martin Shkreli who raised the price of 62-year-old taxoplasmosis drug by 5,000% after acquisition from Impax Labs?
- The 2015 election campaigns focused on big pharma (related to price hikes)
- Biotech startups joined forces with traditional pharmaceutical companies (e.g., Celgene partnered with Juno Therapeutics)
- The FDA approved new drugs at a record pace (as Matthew Herper stated, “the FDA is basically approving everything”)
So what does 2016 have in store for Pharma IT?
Emergence of Digital-Health Ecosystems
As technology evolves by leaps and bounds, it’s totally enhancing and transforming the whole industry. As a result, we will see changes in the way the industry communicates and maintains relationships with the following entities:
These relationships will start to include smart pills, devices that monitor one’s health in real-time, as well as virtual visits. As a result of smart technology, there is a huge opportunity now to exchange information in all directions creating a dialog between all stakeholders.
However, there will be a lot of legal and regulatory implications when it comes to security and privacy. As healthcare embraces Big Data, tech giants like Apple and Google will also focus more on this sector.
Increased Incorporation of Big Data Analytics
Pharma has always embraced big data, however it is only now that the information can be analyzed and put to use to affect the following:
- Prescriptive and predictive analytics
- Effective monitoring
- Brand positioning
- Establish value
Drug Pricing Will Become Innovative
As a result of the backlash from last year’s Shkreli incident and the current aging population that will require long-term medical treatment in the future, drug pricing will continue to be in the spotlight in 2016.
IT is expected to play a role in these possible outcomes:
- Managed entry
- Multifaceted discounts
- Risk-share schemes
- Performance based payments
- Exclusive formulary access
- Long-term contracts focused on outcomes
2016 will be the Year of Real Transparency
There has been growing pressure in the industry to become completely transparent evidencing the following:
- Financial relationships with doctors
- Research and development
- Clinical trial data
- Access to data on the evolution of the drug
Last year’s repercussion on pricing haven’t died down, so pharma will face increased pressure from the public and politicians to demonstrate exactly what they do to justify the price. By using IT tools, the industry can communicate this information in a manner that’s reasonable to the consumer.
Last Year’s Trend of Massive-Mergers will continue (So what about IT?)
Encouraged by tax-inversion benefits (Pfizer and Allergan) and the need for innovation, synergy, and cutting costs, Big Pharma will continue to pursue acquisitions and mergers.
According to KPMG, $221 billion in finalized pharmaceutical deals took place in the first half of 2015 before we even heard of the Pfizer and Allergan merger.
Although there are concerns about over valuation, experts believe that this trend will continue in 2016, but it’s not expected to be as intense as last year.
Mergers will require systems unique to a company to work together (at least in the short-term). As a result, there will be a growing demand for middle wear, etc.
Biotech & Biosimilars Will Maintain Their Significance In the Marketplace
Although some analysts believe that the glory days of biotech are over, it does not necessarily mean that it’s lost its importance. Although everyone is up in arms about the costs, the need for biotech won’t die out.
Express Scripts has predicted a cost savings between 2014 and 2024 to be $250 billion if 11 biosimilar companies enter the US market (the FDA is already in the process of reviewing some of these).
As a result, it’s hard to imagine that biotech and biosimilars have peaked and will just fade away in the marketplace. However, it is difficult to sustain the pace of recent years, so it may slow down and pick up over the next 12 months.
Further, 2016 will see more specialty medicines to combat diseases such as:
- Hepatitis B
- Multiple sclerosis
This segment will keep growing furthering the collaboration of pharma and IT.