Emerging Pharma “Personas” for mHealth and Health IT.
I’m fascinated by how the pharmaceutical industry is handling the changes in healthcare. Five years ago, in the face of economic collapse, the era of Pharma consolidation and cost cutting went into high gear. We’ve seen a disintegration of the vertically integrated big Pharma, a shift towards a flexible cost model with an assortment of CRO suppliers, legions of operational efficiency initiatives, and plenty of mergers/acquisitions. This work continues today, and will likely continue for quite some time – there is still slack in the system. But Life Sciences isn’t going to cost cut its way back into prosperity. And so, over the past couple of years there has been an increasing call for “Pharma 3.0” or “NextGen Pharma” – with a focus on weaving the industry closer to the rapid changes impacting healthcare, leveraging new innovations in mHealth to improve patient outcomes, and applying clinical informatics to the reems of new patient data being generated everyday. The changes thus far have been captivating. While the Pharma industry is responding, individual companies are moving in very different ways. While everyone is struggling with some of the same issues there are clearly some dominant strategies / approaches which are emerging.
One way to clearly succinctly typify key distinctions is through using personas (a technique we frequently employ when helping clients). While the process for creating personas is nuanced, it essentially involves collecting data and interviewing a cross section of your target population, and then distilling all that information into a few key tangible archetypes – typically consisting of a name, a photo, a brief description, a quote, and a few key statements about their needs and goals. Personas are unequivocally the best compromise between accurately capturing descriptive data across a population and making that data real – bringing it to life without calling out named individuals and hurting feelings. In the race to define the new winning business model for Pharma, we are beginning to see clear personas emerge. Here are what I see as the emerging personas within Life Sciences for dealing with the changes in healthcare:
Finito Pharma is a mature Pharma company facing patent expiration and a shrinking R&D pipeline. To offset this, Finito is investing in complementary therapies, diagnostics, medical devices, and disease management systems aligned to the major therapeutic areas of its core pharmaceutical products. While new drug treatments are expected to reach the market in the next several years, this revenue growth will be more than offset by losses from patent expiration. The complementary investments on the other hand are expected to grow in revenue. Despite the lower profit margins from the diagnostics, electronic health record, and medical device investments there is expected to be significant growth driven by the net positive health economic benefit of these new investments relative to traditional pharmaceuticals. The long term strategy is to identify further R&D opportunities through a more holistic understanding and the integration of traditional pharmaceuticals with newer investments focused on a few key therapeutic areas.
Glom Pharma is a mature Pharma company facing patent expiration and a shrinking R&D pipeline. To offset this, Glom is investing in new healthcare technologies and companies who have a reasonably strong opportunity to provide significant investment return based on the changes to healthcare. While the investment portfolio is diverse, there is a clear focus on mobile health, general health and wellness, and accountable care opportunities – all poised for major growth over the next decade. Investment continues in Glom’s drug development business. However, there is limited integration between existing drug development efforts and “new growth” portfolio investments. Glom believes active integration of new investments could disrupt progress and market viability of their new investments. To augment and support identification of new drugs or unmet medical need, Glom is partnering with hospital / healthcare networks to gain access to data being generated by electronic health records systems.
PNZ Pharma is a mature Pharma company facing patent expiration, but a stable R&D pipeline. To support continued growth, PNZ has invested internal resources in better understanding the impact of rapid changes in Health IT. PNZ’s success in acquiring new pharmaceutical assets, and developing those assets through regulatory approval has historically been a far better use of limited resources than making Health IT investments. As such, PNZ has tread cautiously – but continues to actively monitor developments. PNZ believes that while its peers are making significant investments, many of these investments will have negative return, and that the impact of mHealth and clinical informatics in Health IT is thus far incremental – not transformational. PNZ’s careful study of movement in this space will result in a more thorough understanding of where to best place its bets. In the meantime, PNZ will maximize shareholder return by continuing to invest in higher margin opportunities in new pharmaceutical development.
I’ve got some guesses on what comes next for each of these three fictitious companies (and their real world analogues). But I’d like to hear your thoughts. If you could invest $1000 in only one of these companies for the next five years, which one would you invest in? Or perhaps there is another pharma “persona” you think I’ve neglected to include? Let us know your thoughts via Twitter (with a #pharmica) or shoot me an email at email@example.com and I’ll report out the best of what we hear in my next blog.