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Where’s the future value in pharma? 

Pharma used to be so simple. Scientists would discover new drugs, regulators would approve them, physicians would prescribe them. And payers with deep pockets covered the costs without asking whether the patients took them or benefited from them. Now it’s all got more complicated. Healthcare has become about much more than just the drugs. Payers scrutinise cost and effectiveness, and patients question what they’re told.

In an attempt to find a way through all this we recently hosted a webinar together with eyeforpharma and a panel of industry experts, to discuss, “Where’s pharma’s value?” It led to a great discussion, lots of disagreement, and plenty of insights about what the future might look like.

Defining value

We started by asking the audience who should define the value of pharma. 40% of our webinar participants thought that patients should play the key part, with nearly 25% seeing a role for an independent body. While we forced the audience to choose just one option, the panellists commented that the optimal scenario would be where different players together determine what constitutes value, as several players could benefit from a single care intervention, such as innovative medicine.

For example, Chris Isler, Director of Integrated Health Solutions at PA Consulting, highlighted there is a broader value to society of keeping people productive and healthy which may go beyond the patient immediate interest.

And Thomas Hach, Director Healthcare Systems at Novartis, also brought up the point that patients aren’t always best placed to assess the value of medicines in all its complexities:  “people pay a lot of money for a Gucci handbag, would they pay a lot of money for a value adding drug…and how would they assess its value?”

Measuring value

The discussion then turned to ‘how’ to understand and assess value. Data and what to measure were seen as key components. Chris Isler described how payers will need access to data to judge the value of the drugs – not only clinical data but data on how the medicines work in the real world.

Stewart Adkins from Pharmaforensic, added that: “Pharma will need to develop data as a core competency,” as it will become more and more fundamental to proving the value of their products.

That moved us onto the fundamental question about how big pharma companies should operate in the future.  Will the traditional business model of incorporating multiple businesses with different business models still work in the future given pressure to develop new competencies to survive and thrive in a changing environment? Should they just do the inventing and leave the manufacturing and selling to others, or keep trying to do it all?

The panellists disagreed what the right path would be.  Chris Isler suggested companies needed to accept “they can’t do everything” and become more specialised.  In contrast, Andy Jones, VP Pharmaceutical Innovation at AstraZeneca, argued that advances in the complexity of medicine meant companies would need to become more holistic and become integrators in an ecosystem: “the people who will be successful will be those who understand how to integrate.”

One example to support Andy’s view is Novartis’ recently approved gene therapy, Kymriah. This $475,000 therapy requires an advanced and highly integrated approach to development and commercialisation, with Novartis one of the few companies in the world who can provide that approach.

Driving value

Our participants did agree on one thing – that things aren’t going to stay the same.

The prospects of precision medicine and “mass customisation” are immense, albeit with clear challenges of their own – not least how healthcare systems and patients are going to pay for it.

Our webinar showed there is no certainty about where the future value of pharma will lie. But what really came through from the discussion was a commitment to drive new ideas and developments. And that’s got to be good for patients. 

Watch the full 'where is pharma's value?' webinar 

Find out more about our work in life sciences.

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