Thinking Holistically about Healthcare

­Anyone who has visited a doctor recently, or works on developing new treatments, knows that the pace of change in healthcare, and the pharmaceutical industry, is huge. New drugs, treatments and technologies come along rapidly, and you need to be active to keep up with the latest progress in the market.

What has evolved much more slowly, however, is the way in which these new treatments are developed and profited from. The pharmaceutical industry, having transformed itself technologically many times, is in a new phase of evolution. Decades ago, pharma established a development model whereby target pharmaceutical compounds are systematically tested to discover which work best and can command exceptional profits. This model – the ‘blockbuster’ model – is analogous to “panning for gold”. Much time, money and effort are put into sifting through huge numbers of compounds (10,000+) to find something valuable. Although recognised as inefficient, this inefficiency has been more than made up for by the high value of that one in ten thousand output: and so the model, so far, keeps rolling.

Death of the Blockbuster
This viability of the ‘panning for gold’ approach is now coming to an end, creating a huge challenge for pharma developers. The impact of tightening payer budgets, value-based reimbursement, and patient stratification are all now starting to be felt, with pharma return on investment flattening, and the blockbuster model beginning to stutter. Crucially, many large pharma organisations are seeing falling returns from blockbusters, with more significant drops in the top 5 best-selling drugs, than the top 20. New blockbusters are simply less ‘blockbuster’ than they were even 5 years ago. Soaring drug development costs, especially for biologics, create further difficulty, accelerating the decline of investment returns. While large revenues are still possible, they are increasingly unlikely to sustain what is now a bloated development process across the wider organisation. The key question of today is: what can pharma do in the face of such an existential challenge to their central, and crucial, development model?

Beyond Pharma: The Treatment Pyramid

Figure 1: Showing the Pharma/Device pyramid, and the key therapy system features

One solution open to pharma is to move beyond the ‘take a pill’ approach to healthcare. The healthcare cost squeeze – and so failing blockbuster model – is largely driven by the drastic rise of chronic disease. Chronic diseases typically require long-term, expensive treatment, with outcomes linked to a complex and hard-to-separate mixture of lifestyle factors. In this context, pharmaceutical treatments sadly appear at too late a stage in the disease progression – only being applied when healthcare systems are already burdened with large costs. They also typically fail to address the wider, lifestyle-influenced factors that complicate outcomes for chronic disease sufferers. This is particularly true when 5% of the most seriously ill (high-need high-cost) patients account for 50% or more of health spending, and adherence rates for such treatments are poor. These factors taken together make pharmaceuticals begin to look like too blunt a tool, applied too late, and with too narrow a focus to provide high patient value, or be profitable in a market which increasingly uses that value to determine reimbursement levels.

The burning need both for healthcare systems and developers is not for ever more sensitive and expensive pharmaceuticals, but for complete therapy systems (figure 1): novel combinations of drug, device, diagnostic, software and patient factors that produce radically better outcomes through synergistic compound improvements.

The value of such systems extends beyond treatment, to address the wider ecosystem that encompasses screening, diagnosis, prevention and management, and prevent high treatment costs before they occur. They also act to enhance the value achieved from a pharmaceutical alone – for example by providing more targeted delivery, developing treatment supportive actions, improving adherence, or reducing waste. What is important in the context of the blockbuster model is not only the improved patient value – and so higher reimbursement – achieved, but also the capability to offset the enormous cost of developing new pharmaceuticals. Devices (and so device-derived value) are typically able to be produced in half the time, and for a tenth of the cost as pharmaceuticals. Beyond this, compound benefits achieved by optimising the way devices, patients, and pharmaceuticals interact have an even lower marginal cost – all of which works to move the overall return on investment back in favour of profitability for pharmaceutical developers.

How to Get There - Matching Process to Product
Moving to this new approach is not simple, but it is vital, and it requires a creative re-imagining of how pharma develops, and profits from, its capabilities. The need is innovation in its most raw and fundamental form, which will only be achieved by pharma developers undertaking an honest inventory of how they work as well as taking difficult decisions that sit counter to the current ‘way things are done’. The command and control model often implemented in pharma development must give way, at least in the earliest stages, to a freer and more flexible process – able to better handle the ‘fuzzy’ elements inherent in creating new concepts, whilst still allowing for strong documentary and regulatory adherence as a project moves closer to market. This change in approach becomes doubly vital, as the simultaneous development of drugs and devices must be built on the removal of the relevant discipline silos that currently exist - to create effective co-creative multidisciplinary project teams.

Overall, pharma must lead from the front. That means not only creative technical solutions, but creative regulatory solutions that deliver patient value and profitability. All elements of the organisation must work closely together from earliest concept to final clinical testing to address the complexity inherent in these multi-domain therapy systems.

In turn, all this requires a deep commitment to change, and strong leadership to realise a new development vision. This will not happen overnight but is deliverable through a careful program of work that assesses current working practices, teaches new ways of thinking, plans the approach, and implements it ‘in the boat’ alongside those who will use and work within the new system day-to-day.

Long Term – Change the Drug Discovery Paradigm
Ultimately, a huge change is needed within pharma. Adopting a new approach to enable the development of treatment systems will help in the medium term but doesn’t address the underlying long-term time/cost challenge of pharmaceutical development itself. At some point pharma must move away from panning for gold, to a more sophisticated process that removes the inefficiency of the 10,000:1 filter. Some new approaches, such as Group-based Prediction Systems (GPS), hold out hope for early prediction and filtering and reducing the attrition rates for new drugs, but the development and adoption of these new approaches first needs the establishment of an effective innovation process within pharma to succeed. In this context, establishing innovation capability around therapy systems should be seen not as a standalone outcome, but an opportunity to drive wider change within pharma - a springboard from which to address the wider structural issues within the industry and to ensure patients receive the treatment they need.