In the middle of the 20th Century, pharmaceutical companies were highly respected and patients depended on their physicians to make healthcare decisions. Drugs were a key part of a physician’s ‘toolkit’.
As we entered the era of the blockbuster drugs, most were small molecules made by chemical synthesis, but biotechnology was starting to emerge as a possible source of new therapeutics. Meanwhile, direct-to-consumer pharmaceutical advertising began to empower patients.
Fast forward to today, and we see pharmaceutical companies suffering degraded reputations and values, patients further empowered by the Internet and social media, and average life expectancies increased by a decade. Digital health technologies are poised to explode and the top 10 pharmaceuticals by sales will soon all be biologicals!
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Passing the healthcare innovation torch: from medicinal chemistry, though biotechnology to digital technology
1. Passing the Healthcare Innovation Torch:
From Medicinal Chemistry through
Biotechnology to Digital Technology
Frontiers of Medicine
MaRS
8 May 2013
Martin Sumner-Smith
2. About me
Martin Sumner-Smith, PhD
Academic – Biotechnology – Bioinformatics – Enterprise – Advisory
1970’s 1980’s 1990’s 2000’s 2010’s
9. “…the industry has seen itself as an independent
product supplier to healthcare
rather than as an integrated part of, and
collaborator with, the other participants in the
ecosystem.”
Fade or flourish? Rethinking the role of life sciences companies in the healthcare ecosystem – IBM
16. Life Sciences Industry Trends…
• Blockbuster era comes to an end
• Strong sales growth but declining expectations
P/E for large-cap biopharma fell from 35x in 2000
to 11x in 2010
Pricing and access pressures
Higher scientific hurdles
More stringent regulatory hurdles
Increased competition
R&D actually destroys value in some
organizations!
17. Slide 18
Time
MarketGrowth
Technology Adoption
Life Cycle
Growth
Market Mature
Market
Declining
Market
Indefinitely elastic
middle period
End of
Life
A
Fault
Line!
E
D
C
B
The Category Maturity Lifecycle
Category Lifecycle
24. TRIZ
Genrich Altshuller:
“Theory of Inventive Problem Solving”
1. Problems and solutions are repeated across
industries and sciences
2. Patterns of technical evolution are also
repeated across industries and sciences
3. Innovations used scientific effects outside
the field in which they were developed
http://en.wikipedia.org/wiki/TRIZ
28. Therapeutic Foci
Fade or flourish? Rethinking the role of life sciences companies in the healthcare ecosystem – IBM
29. Market Leading “Pharmaceuticals”
• In 2012 the top pharmaceutical was a
biological for the first time
Abbvie’s HUMIRA
• “By 2020 the top 10 pharmaceuticals will all
be biologicals” – Steve Burrill
30. Sales Erosion after Patent Expiry
Small Molecule
Biologicals
Measuring the return from innovation: Is R&D earning its investment? – Deloitte
32. R&D Innovation
• Rising costs, especially sunk cost for failures
Late stage failure rates too high
• Declining output
Need to simplify operations
• Costs 7x in 25 years
Cost per new drug now $1.1 - 1.7 billion
Slow pace of discovery and validation
Inefficient patient recruitment
• 80% miss deadlines, average 90 day delay
Complex analysis required for trial termination
35. Life Sciences Industry Trends
• Traditionally:
A high-risk, high-margin business
• But increasing pressures:
• Loss of patent protection & competition from generics
• Costs of innovation and R&D skyrocketing
• Reimbursement ceiling and demands
• Increased transparency required by regulators & others
• Drive a move to:
Managed risk and more conservative margins
36. “The life sciences industry stands at a crossroads.
Its business model is broken,
and the surrounding healthcare ecosystem is
changing dramatically.
So how should companies respond?
They can carry on as normal and
potentially fade into insignificance
or completely rethink how they engage with the
other stakeholders in the healthcare ecosystem in an
effort to flourish anew.”
Fade or flourish? Rethinking the role of life sciences companies in the healthcare ecosystem – IBM
37. “…you can’t meet the challenges of tomorrow with
yesterday’s tools—and expect to survive.”
The future of the life sciences industries: Transformation amid rising risk
– Deloitte
39. “One of the key drivers for the future lies in using
information to create more personalised care and
standardisation at the same time. We are witnessing
the ‘industrial revolution’ of healthcare, enabled by IT”
– PA Consulting
40. “And while the industry remains data rich, it is
weaker when it comes to turning data into insights.”
Fade or flourish? Rethinking the role of life sciences companies in the healthcare ecosystem – IBM
44. “The shifting trend in pharma towards increased
adoption of IT beyond their traditional needs and
exploring new IT avenues in digital
marketing, regulatory submissions, predictive
analysis & cloud computing has become more
evident in the last few years.”
IT Life Sciences Summit 2012: Technology Enabled Pharmaceutical Business Transformation – DIA
56. Smartphone/Tablet base features
• Processor
• Local and Cloud storage
• Distant communication
• Time
• Location
• Activity
• Local communication
• Camera…
69. Synergy
“At 8:03am you used your asthma puffer
while entering the MaRS
concourse, walking at a moderate pace
towards the Tim Horton’s after an
unusually long subway ride. Your pulse was
110, blood pressure 135/80, temperature
37.2, blood glucose…”
70. “Based on data collected to date I estimate that
there is 78.9% probability of an allergen to
which you react present at the following
locations…”