By Karen Taylor, Director, Centre for Health Solutions

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Last month Deloitte was one of the main sponsors of the 2019 FT Global Pharmaceutical and Biotechnology Conference. This is a key event for the industry, attended by senior industry executives and financial professionals from around the world. The aim of this year’s conference was to focus a critical eye on the forces set to transform the industry in the years ahead. I was privileged to attend the conference and help man our stall where we displayed our research reports, including our report Intelligent biopharma: Powered by AI, which we launched on the first day. We also introduced our new Converge Health platform and the connected patient experience. This week’s blog shares some of the highlights that I took away from the presentations and panel debates that took place on the first day. I will return to day two in a later blog.

The current and future headwinds that are challenging the industry today

Pricing pressures in the US and a growing number of markets globally have set in motion a search for new and innovative payment models, while the rise of ultra-expensive, potentially curative gene and cell therapies have brought to the fore a heated discussion about the sustainability of the industry’s underlying economic and funding model. This finding accords with research we have conducted over the past ten years for our Measuring the return from pharmaceutical innovation series. Our analysis of the performance of the return on investment in biopharma R&D of 16 biopharma companies shows that all companies have seen a significant decline in their expected returns over the past ten years. Our 10th report will be published on 18th December, so keep an eye open for it.

The other disruption facing the industry is coming from a host of ‘new entrants’ in the shape of big-tech, biotech and consumer-centric start-ups that are challenging traditional big pharma’s business and operating models in the face of healthcare’s transition to a future focussed more on prevention and wellness. Indeed, ‘big pharma’ companies are facing competition on an increasing number of fronts. Success in the new and evolving data and patient-centric world is increasingly dependent on forging relationships with patients and regulators sustained on trust, along with building new business models for the future.

The conference opened with a keynote presentation by Emma Walmsley, the CEO of GlaxoSmithKline, who explained how GSK is responding to the changing landscape and the changes she has made to the organisational structures of her company. She emphasised that a priority was strengthening innovation and that their emphasis remained on vaccines and oncology, underpinned by the developments in biologics. She highlighted the opportunities presented by advances in science and technology, particularly artificial intelligence, and the potential of new cell and gene therapies. She noted that a high priority was to reverse the challenge of R&D declines. As part of this she emphasised their partnership with 23&Me, academic researchers into CRISPR and other ‘next gen’ therapy innovators as key to their vision of the future. She also emphasised her commitment to supporting the development of a thriving life sciences environment in the UK and mentioned her non-executive role on the Microsoft board and the enormous opportunities she sees in the marriage between biology and technology, which is now the number one focus of GSK.

Who Owns the Patient? The Disruption to Come

The first panel discussion was on the important topic of big data, and our own Deloitte partner, Hanno Ronte, provided his take based on his wide ranging experience of working across the pharmaceutical and biotechnology industry. While there was a consensus that the patient would own their data, underpinning the debate was the question of the role pharma would play in relation to those data as healthcare transitions from a treatment service to a prevention service. There was the recognition that pharma companies are encountering a growing number of ‘new entrants’ with whom they have to compete for patients’ loyalty and data. Big tech companies, as well as innovative new start-ups, are using complex digital tools and algorithms to help patients stay healthy and manage their conditions, and they have had little trouble in gaining patients’ trust in their use of data. Retailers, insurers and consumer brands are also entering the fray. Meanwhile, pharma companies are making tentative first steps with their own versions of data-led, disease management technologies and services, including some who are investing in digital therapeutics in their ambition to go ’beyond the pill’. However, the major challenge is still around gaining access to patient data. At a time when concerns regarding data quality, integrity and the privacy of patient data are paramount, building robust evidence to back health claims, as well as relationships with patients based on trust, will be central to pharma’s success.

The panellists recognised that while building relationships with patients, patient groups and tech disrupters is important, it is inevitable that they need to adopt new business models and that an evolution of the industry is likely. All panellists agreed that pharma needs to adopt best in class technology to analyse and make effective use of data, to improve patient pathways and provide access to the treatments and services provided. Trust was seen as critical to helping the transition to new partnership models that make healthcare more affordable. While there were concerns about the robustness and transparency of health algorithms, and how digital apps and therapies will stack up against the growing demand for evidence and validation, there was agreement that digital therapeutics would play a critical role in helping to tackle many of the non-communicable, cognitive and mental health conditions that currently lack effective treatments. The question remains, however, will lifestyle interventions be a ’new kind of medicine’ and if so, what standards of evidence will be needed?

Other discussions on day one were about the future of work in the industry and the need for new skills and talent, the prevailing view being that pharma companies are likely to undergo a significant shake-up as they position themselves for a rapidly changing healthcare landscape. Moreover, success, to a large extent, will depend on their ability to attract, develop and retain high-performance talent from across a wide range of industries, develop new operational and organisational models and break down the silos inhibiting innovation. There were many examples of how pharma companies are managing their transformation in terms of governance, operational and organisational change, and how they are attempting to foster innovation, entrepreneurial spirit and address the calling to ‘innovate like a start-up’. Moreover, leading-edge strategies would be needed for recruitment, development and retention of talent if pharma is to succeed in the new world.

Ultimately the main message I took away from the opening sessions was that today we are seeing the best of times and also the worst of times. Despite challenges, there is much to celebrate and look forward to with regard to the industry’s contribution to improving the health people around the world, with much more innovation and success to come.

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Karen Taylor - Director, UK Centre for Health Solutions

Karen is the Research Director of the Centre for Health Solutions. She supports the Healthcare and Life Sciences practice by driving independent and objective business research and analysis into key industry challenges and associated solutions; generating evidence based insights and points of view on issues from pharmaceuticals and technology innovation to healthcare management and reform.

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