Pharma and life sciences

21st Century Pharmaceutical Collaboration: The Value Convergence

New collaborations pairing drug makers with insurers, health systems, patient groups and technology firms are reconfiguring drug R&D and commercialization. Shared data is shaping drug development and demonstrating health outcomes to create value for patients and industry.

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Key findings for biopharma convergence:

  • Purchaser groups are linking administrative claims data with electronic health records to conduct population research – with biopharma collaborators – to better understand important population segments, like patients with more than one chronic disease.
  • Healthcare providers, pushed by new payment incentives, are collaborating with the drug industry to measure the effectiveness of therapies on the patients they treat. Prescribing practices increasingly reflect sophisticated cost/benefit analyses.
  • New entrants are bringing biosensor technology and digital tools to healthcare to help biopharmaceutical companies better understand the lives of patients, and how they change in response to drug intervention.
  • Patient advocacy organizations are creating disease-specific registries for research, and consulting with industry players on clinical trial design and protocols.
  • Proposed legislation such as the 21st Century Cures bill would make it easier for drug companies to promote cost effectiveness data as an additional product attribute.
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Four Key Stakeholders

Four stakeholders driving change

#1: Government agencies and lawmakers with an ear to industry
The 21st Century Cures legislation could make it easier for drug companies to share information with purchasers about a drug’s cost effectiveness and impact on specific patient populations. First Amendment lawsuits are challenging the limits of “off-label” communication.

#2: Emboldened Health insurers and pharmacy benefits managers
Reconciling a drug’s performance in clinical trials with how it performs in the real world - where patients and treatment circumstances may differ dramatically - can help inform decisions about drug coverage in the New Health Economy.

#3: New Entrants fill the evidence gaps
New entrants bring not just technology, but new business models to bear on care delivery and consumer health. Biopharmaceutical companies, through collaboration, can leverage the speed and innovation of emerging technology, device and diagnostic firms to merge the consumer experience into the health ecosystem. Wearables are only the beginning.

#4: Consumer expectations and patient advocacy
Consumer expectations in healthcare have shifted. Easy access to health information, increasing costs, and a desire to understand – at a physical and biological level – what’s happening in their bodies has led to stronger opinions about how, where and when to deal with illness. Here is the link to the wearables video from the 180 forum.

What this means for your business

As pressure builds to link patient health outcomes with the cost –and value -- of new therapies, biopharmaceutical companies must transcend the traditional divide between drug R&D and commercialization. Evidence generation should continue after a drug receives FDA approval, as clinical safety and efficacy measures give way to real-world performance and demonstrated patient outcomes.

Place new bets with pilot programs. New entrants are flooding into healthcare. Advances in digital monitoring and biometric sensor technology can shed light on patient experiences and identify remaining unmet need.

Get the purchaser perspective. Collaborating with insurer groups and health systems provides access to the patient data used by these groups to make coverage decisions.

Embrace patients as partners. Consumers are asserting themselves when it comes to data ownership, but will contribute health information if they understand the benefits. The National Institutes of Health (NIH) lists 39 disease-specific patient registries open for research.

Anticipate regulatory change. Regulators are exploring new ways to integrate patient experiences into drug review decisions. Working with patient data as regulations evolve will deliver a competitive advantage over companies that wait for new laws to take hold.

23andMe targets drug development

Case Study: 23andMe targets drug development

Almost one million people have swabbed their cheeks and mailed the samples in to consumer genetics firm 23andMe. Now the company is building a drug discovery and development business on top of that data. Drug companies are using 23andMe’s genetics database to shape and speed clinical trials, and shave costs off of the process.

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Case Study: 23andMe targets drug development

Almost one million people have swabbed their cheeks and mailed the samples in to consumer genetics firm 23andMe. Now the company is building a drug discovery and development business on top of that data. Drug companies are using 23andMe’s genetics database to shape and speed clinical trials, and shave costs off of the process.

23andMe has “moved into joint development collaborations where there are milestones or the potential for royalties,” said Emily Drabant Conley, 23andMe’s director of business development. “And that is out of a recognition that the data are valuable.” In March of 2015, 23andMe announced the creation of a therapeutics group, to be led by Richard Scheller, former EVP of research and early development at Genentech. In addition to collaborations, 23andMe will search for and pursue drug targets on its own.

Consumers who purchase 23andMe’s genotyping kit for $99 and send in their saliva samples get access to an online account to see their ancestry results and uninterpreted raw data. Inside that account, consumers are presented with a consent form and asked if they want to share their data for research. “More than 80% of our consumers opt-in to participate,” said Conley.

Those who opt in are prompted to answer survey questions about prior diagnoses, family history and medication use. A collaboration with Genentech announced at the start of 2015 is focused on identifying drug targets for Parkinson’s disease. The majority of the 11,000 genotyped Parkinson’s patients in 23andMe’s database also provided information about their symptoms and how they’ve progressed over time, said Conley.

Working with Genentech, 23andMe is narrowing the population of 11,000 Parkinson’s patients down to “a couple of thousand” who are particularly interesting from a drug discovery perspective. That group, which may include people with very early onset of the disease, very fast progression of symptoms, or people with known genetic risk factors will undergo a full genome sequencing and a more thorough genetic exploration as part of a clinical trial.

A collaboration with Pfizer in inflammatory bowel disease (IBD) turns the 23andMe kit into a patient recruitment tool for research. Individuals with an IBD diagnosis – such as Crohn’s disease or ulcerative colitis – are eligible for a free kit in exchange for consenting to share the data with Pfizer. They also must fill out short surveys online.

The goal of the Pfizer study, which hopes to enroll 10,000 IBD patients, is to “use genetics to identify segments of the population that fit a certain profile,” said Conley. For example, patients that didn’t respond to specific drugs to treat their disease.

“You can think about that from the insurance level, but also in how you structure your clinical trial,” said Conley. Another Pfizer collaboration, in lupus, asks participants to consent to have 23andMe “track down their medical records and use that data as part of the research.”

Asked about the next therapeutic frontier for genetics, Conley said the treatment of psychiatric disorders such as depression and bipolar disorder could be improved by genetics. The number of products available, and the wide variation in efficacy and response rates, leaves psychiatrists “throwing darts at a board,” said Conley. “That’s an area where I do think we will be able to use genetics” to make better treatment decisions for individual patients.


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21st Century Pharmaceutical Collaboration: The Value Convergence

Executive summary

In the past, organizations working in different pockets of the health sector made decisions according to their own business priorities. But as pharmaceutical and life sciences pipelines rebound, consumer choice and provider cost-savings incentives are driving change in the industry’s commercial model. As US specialty drug spending hits an all-time high, purchasers, prescribers and patients are considering price as a key component of a drug’s expected health benefit.

In 2014, the US spent $373.9 billion on medicine, a 13.1% increase over 2013. Purchasers have taken notice, and are driving down drug costs using mandatory discounts and price protection clauses in formulary contracts.

Patients are paying more for drugs as they switch to high-deductible health plans, and face larger out-of-pocket costs for specialty products. And physician groups and the government are becoming more concerned, and vocal, about the financial side effects of expensive new therapies. This is especially true as health systems shift to new payment models based on health outcomes, instead of volume of services provided.

Meanwhile patient advocacy groups are publicly assessing drug effectiveness, and providing money and data to help drug developers discover and develop tomorrow’s new therapies. Both public and private purchasers are opening up their datasets for collaboration and research. Lawmakers are considering legislation that would allow commercial teams to tout the cost benefit of new products. And technology is facilitating the continuity of care outside of the clinic.

As a result, the divisions between biopharmaceutical R&D, FDA approval and commercialization are blurring. Patients are deciding which drugs are valuable in the real world. Provider groups are considering the impact of treatment decisions on the total cost of care. And patient data, in aggregate, is being used by insurers to decide when, how and at which price points to make new drugs available.

Biopharmaceutical companies cannot afford to sit on the sidelines as patients and health plans negotiate access to their products. Putting drug costs into context requires access to patient data, and evidence connecting drug intervention with patient health outcomes. Collaboration is the key to demonstrating value and ultimately boosting revenues in a system that rewards outcomes and quality over volume: the New Health Economy.

To understand the landscape for collaboration, and to determine where the value lies, PwC’s Health Research Institute (HRI) conducted dozens of interviews with insurer groups, health systems, new entrants, patient advocacy organizations and biopharmaceutical executives.

Key findings:

  • Purchaser groups are linking administrative claims data with electronic health records to conduct population research—with biopharma collaborators—to better understand important population segments, like patients with more than one chronic disease.
  • Healthcare providers, pushed by new payment incentives, are collaborating with the drug industry to measure the effectiveness of therapies on the patients they treat.
  • Prescribing practices increasingly reflect sophisticated cost/benefit analyses.
  • New entrants are bringing biosensor technology and digital tools to healthcare to help biopharmaceutical companies better understand the lives of patients, and how they change in response to drug intervention.
  • Patient advocacy organizations are creating disease-specific registries for research, and consulting with industry players on clinical trial design and protocols.
  • Proposed legislation such as the 21st Century Cures bill would make it easier for drug companies to promote cost effectiveness data as an additional product attribute.