Top health industry issues of 2018

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Real-world evidence a growing challenge for pharma

Changes at the FDA will prompt pharmaceutical and life sciences companies to take a hard look in 2018 at their ability to collect and use real-world data, which is patient health and outcomes data gathered outside of randomized controlled trials.

As the 21st Century Cures Act takes effect, the industry may see new opportunities to use these data for faster, less costly FDA approvals and freer communication with payer formulary committees.1 Some real-world data are already being collected as a byproduct of digital apps and wearables and through EHRs and claims databases.2 But pharma companies’ enterprise-wide data capabilities are largely underdeveloped. Companies wishing to seize new opportunities and enjoy the resulting efficiencies will have to decide whether to build, acquire or outsource these capabilities.

The FDA routinely accepts real-world data for postmarket commitments such as safety monitoring but has not embraced them for new drug approvals or label revisions.3 The 21st Century Cures Act of 2016 changed that, and a framework for applying the law to drug companies is expected by the end of 2018, with guidance to follow in 2021.4 The act requires the FDA to consider additional uses of evidence drawn from real-world data for drugs and devices.5 These include replacing clinical trials with “real-world evidence” to support new indications.6 Companies generally need at least one Phase III clinical drug trial to gain approval for a new indication, with costs for a single trial approaching $300 million in some cases.7 The alternative presents a significant opportunity.

Other FDA guidance released this year about the communication of healthcare economic information is expected to loosen restrictions on the types of evidence pharma companies may use when negotiating with payers about drug pricing and formulary placement in value-based contracts.8 This could create a heightened focus on increasing the number of patient registries, observational studies and patient-reported outcomes.

Medical device companies have begun taking advantage of the new flexibility.9 In June, Edwards Lifesciences’ Sapien 3 transcatheter aortic valve replacement was approved by the FDA for additional uses based on real-world evidence.10 Pharmaceutical companies should take lessons from the device sector—the FDA released final guidance on real-world evidence for that sector in August—but they likely will have a steeper climb. Drugs, for the most part, do not generate data the way many medical devices do. Healthcare providers and insurers hold the keys to claims, EHRs and wearables data necessary to understand how drugs are working outside of clinical trials.

While 82 percent of provider executives believe that data sharing with drug companies will be important in the future, past collaboration efforts have had problems. Providers have struggled with legal hurdles, and they fear data breaches. Pharma companies have expressed concern about EHR data quality and lack of data governance.11 Also, gathering data from manufacturers is highly fragmented because they focus at a brand level. To complicate matters, consumer attitudes about sharing their data are split (see Figure).

Real-world evidence partnerships with pharma could create new revenue streams for cash-strapped health systems or provide resources and technical expertise to extract meaningful population health insights. Integrated health systems are “looking for value beyond product and price… they want to know how pharma can help them solve the broader issues affecting their businesses,” said John Haney, area vice president, Southeast, at Johnson & Johnson.12

As the new FDA framework changes the cost-benefit equation, payers, drug companies and providers should renew efforts to cooperate on making the most of real-world evidence.


Align on interests

When considering provider collaborations, focus on a shared goal or common problem.[13] This could be a particular therapeutic area or a common desire to deliver precision medicine. Also seek partners who already have broad patient consent to share data. Many integrated delivery networks have invested in research and data infrastructure and aspire to use this as a market differentiator and to attract partners.

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Consider who’s already built it

Drug companies may choose to partially sidestep the thorny task of grassroots data collection and aggregation by using secondary data sources. For example, OptumLabs, owned by UnitedHealth Group, includes clinical and claims data on 150 million individuals gathered from partners including co-founder Mayo Clinic.[14] HealthCore, a subsidiary of Anthem, maintains a database of medical, pharmacy and lab data covering nearly 65 million individuals.[15]

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Make your own data by being “smart”

Similar to medical devices, some digital pharma ventures—such as “smart” pills and pill bottles that connect to the internet—gather data on their own.[16] This kind of venture may be a natural extension for pharma companies that already have invested in digital capabilities to take patient engagement apps and tools to market.

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1 Peter J. Neumann and Elle Pope, “Cures Act, FDA Draft Guidance Suggest Flexibility On Communication Of Real-World Drug Impacts, Though Questions Remain,” Health Affairs (blog), Feb. 2, 2017,

2 PwC Health Research Institute, “Digital accelerators for a new innovation era,” 2014,

3 Marc Berger et al, “A Framework for Regulatory Use of Real-World Evidence,” Duke Margolis Center for Health Policy, 2017,,9,10

4 Gregory Daniel, “Clarifying the Real-World Data and Evidence Landscape,” presentation at public meeting: A Framework for Regulatory Use of Real-World Evidence, Sept. 13, 2017,

5 Ibid.

6 “Use of Real-World Evidence to Support Regulatory Decision-Making for Medical Devices: Guidance for Industry and Food and Drug Administration Staff,” U.S. Food & Drug Administration, Aug. 31, 2017,

7 Jennifer Kao, “White Paper: Pharmaceutical Regulation and Off-Label Uses,” NBER, Feb. 21, 2017,; Anna Azvolinsky, “Repurposing Existing Drugs for New Indications,” The Scientist, Jan. 1, 2017,

8 Neumann and Pope, “Cures Act, FDA Draft Guidance Suggest Flexibility” ; PwC Health Research Institute, “Launching into value: Pharma’s quest to align drug prices with outcomes,” September 2017

9 U.S. Food & Drug Administration. Use of Real-World Evidence to Support Regulatory Decision-Making for Medical Devices: Guidance for Industry and Food and Drug Administration Staff. 2017.

10 “FDA expands use of Sapien 3 artificial heart valve for high-risk patients,” U.S. Food & Drug Administration, last modified June 5, 2017,

11 PwC Health Research Institute, “Needles in a haystack: Seeking knowledge with clinical informatics,” February 2012

12 PwC Health Research Institute, “Making collaborations work: Pharma companies invest in new relationships with health systems,” November 2016

13 PwC Health Research Institute. “Population health: Scaling up,” May 2016,

14 Melanie Evans, “Healthcare data mining: OptumLabs collaborative begins to offer insight about what works,” Modern Healthcare, Sept. 26, 2015,; Diana, Alison. "Optum Labs Translates Big Data Research to Clinicians." InformationWeek, July 22, 2014.

15 “HIRE®,” HealthCore, accessed Oct. 19, 2017,

16 Lauren Silverman, “ ‘Smart’ Pill Bottles Aren't Always Enough To Help The Medicine Go Down,” NPR, Aug. 22, 2017,

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