Digital Transformation Moves Pharma 'Beyond the Pill'

The Internet of Things (IoT) is getting personal. Wearables, ingestables, even implantables – devices that not only help us with our fitness, but can monitor and manage disease and its treatment – are right around the corner. And where the IoT goes, money follows. In this case, Big Pharma smells opportunity.

But while these new consumer doodads get all the press, health-related IoT technologies are only the tip of the iceberg for the Digital Transformation hitting the pharmaceutical industry, as it struggles with a turbulent business landscape. “There are very few blockbuster drugs,” explains Eric Pilkington, EVP Digital Strategy at McCann Health North America. “The pharma companies are trying to figure out what to do. The competitors are the generics: identical and cheaper. The pharmas have to provide value beyond the drug itself.”

In response to this shifting environment, pharmas are looking to move to a range of value-added services under the moniker beyond-the-pill – and most of those new services are digital. “Beyond-the-pill is a logical and inevitable path forward for all,” reports Joseph Jimenez, CEO of Swiss healthcare giant Novartis. “Creating value by embedding products into a holistic offering with the aim to improve patient outcomes and provide tangible competitive advantages.” Such holistic offerings include telehealth services, wellness programs, and improved chronic disease management over patients’ lifetimes.

Do Well by Doing Good

An improved focus on the health of patients beyond simply selling them drugs may sound altruistic, but it also has a sound business motivation. “Healthcare payers and providers are increasingly focused on value—on creating better outcomes with lower costs,” says Jerry Cacciotti, a partner at management consulting firm Oliver Wyman. “But it hasn’t been clear how pharma fits into new value-based structures.” As a result, pharmas are doubling down on their Digital Transformation initiatives.

Pilkington describes one new patient interaction model as “a concierge service through an array of programs” that involves the collection and analysis of “more information about individual patients and what they’re going to do, but not selling more drugs or upselling to more expensive drugs.” Big Data, therefore, are a critical factor in this new beyond-the-pill strategy, as the range of devices, from wearables and other patient-centric technologies to improved, less expensive diagnostic equipment in physicians’ offices, churn out ever-increasing quantities of information.

Such information enables a greater level of engagement between the pharmaceutical firms and individual patients. “The engagement becomes the product,” says Joseph Kvedar, Director of the Center for Connected Health at Partners HealthCare. “The therapeutic is almost a giveaway or marketing expense. There aren’t many better ways to develop a relationship with a patient than through a prescription for a medication to treat a chronic illness.”

While developing long-term relationships with patients makes sense for the pharmas’ bottom lines, there is still a question whether the patients themselves want to get up close and personal with their drug companies – an issue the pharmas themselves are well aware of. Eli Lilly & Co ., for one, is rolling out a Web-based tool to help people learn about particular drugs. “Guiding the conversation toward our product could be misconstrued as us trying to turn patients into our customers even before they have a diagnosis,” warns Tommy Kok Annfeldt, a Brand Manager with Eli Lilly. “Our tool is robust because it asks the questions that lead towards an objective diagnosis, which is aligned with the most appropriate treatment.”

As a pharma advertising executive, Eric Pilkington is particularly sensitive to the issues of customer pushback. “Consumers are too smart to fall for PR,” he points out. But even more concerning to consumers than overly aggressive marketing is the question of privacy. “Transparency is essential,” explains Pilkington. “If consumers don’t own their data, they need to be able to access it and know who’s collecting it and for what reason.” In fact, he points out a market failure that still resonates among pharma marketers. “Google Health failed for privacy reasons. They had algorithms to market and advertise to consumers based upon consumer data. But because of mistrust, Google Health failed.”

Getting the technology right is critically important, but as with most Digital Transformation efforts, the improvements required at the pharmas go well beyond technology and customer experience changes. The greatest challenges center on the internal reorganizations necessary to break down silos and work across different departments. “Change in healthcare requires the ‘ideation’ and execution of multidisciplinary solutions,” explains Samuel Pygall, Patient Services Manager at MSD (known as Merck in the US). “We need input from those different groups in order to achieve those breakthroughs. This requires that everyone is on the same page, sharing a vision for what healthcare is supposed to be and how to get there.”

Digital Transformation for Patients as well as Pharmas

Organizational changes not only cut across departmental lines, but also include increased interactions with consumers. Christian Isler, formerly Global Head of Solution and Product Development at Pfizer Integrated Health expands on Pygall’s assessment. “Services require more listening than talking, but they also require co-creation,” Pygall said. “You need to work in partnership with your customer because you need to fit into their environment.”

The changes taking place internally at pharmas to move toward a value-added, beyond-the-pill mentality indicate the breadth of change that Digital Transformations often entail. The wearables and other cutting-edge consumer technologies may be the most visible and exciting part of this transformation for the public, but the real win will be improved long-term health outcomes – and such outcomes are something consumers and big pharma can agree on. “ Merck is funding the research, but I think there’s also a broader digital health agenda that we’re really kind of pursuing,” Merck Chief Medical Information and Innovation Officer Sachin Jain said. “This is a big part of it, which is around this notion of defining what I call digital phenotypes [observable characteristics]. We think many diseases will actually have a phenotype that presents through patient use of technology.”

McCann Health’s Eric Pilkington agrees. “This is the future that we see – a landscape full of opportunity,” he posits. “Despite a slow regulatory process, a host of new mobile and social tools, sensor technologies and devices are being developed for an industry in need of change. And these innovations are poised to improve health lifestyle choices and change the way care is delivered.” The pharmaceutical business will never be the same – indicating true transformation, rather than superficial change. Novartis CEO Jimenez put it succinctly: "I really believe that in the future, companies like Novartis are going to be paid on patient outcomes as opposed to selling the pill.”

Eric Pilkington will be speaking on the Future of Health at the Digital Strategy Innovation Summit in San Francisco on September 25 – 26. He’ll touch upon wearables and the “quantified self” movement and how technology will be radically changing health management over the next few years.

Image credit: e-Magine Art