The global life sciences industry is undergoing a major transformation. Impacted by widespread industry challenges around healthcare reforms, demand for patient-centric care delivery models and regulatory compliance, life sciences organizations are evolving their business models. Through this latest study by IBM Institute of Business Value, learn how cognitive computing can help the life sciences industry to bridge the gap between untapped opportunities and current capabilities and how can hidden insights that reside in data – structured and unstructured – be fully harnessed. Cognitive-based systems build knowledge and learn, understand natural language, and reason and interact more naturally with human beings than traditional programmable systems. Know more on how specifically can life sciences organizations leverage cognitive computing to address issues currently plaguing the industry.

1. ©2016 IBM Corporation1
Prescribing a digital transformation
Your cognitive future in the life sciences industry

2. ©2016 IBM Corporation2
Four disruptive forces are forcing life sciences industry to focus on
three key areas
Emerging
ecosystems
Need to decide in
which ecosystem
to play and which
role to take whilst
putting the
patient at the
center of any
conversations
Technology-
driven
innovation
Need to
capitalize on new
technologies to
drive innovation
in new
ecosystems
using a platform-
based approach
Innovation of
R&D
Compelling need
to reinvent the
innovation
process by in
order to
decrease the
time and cost of
development
Value- based
pricing
Need to
demonstrate
effectiveness
through real-
world evidence in
order to improve
reimbursement
and formulary
positions
DecideDiscover
Provide ability to digest vast
amounts of research data to
identify new innovations using
more innovative methods
Provide personalized, contextual,
evidence-backed recommendations
to investigators to match patients
with trial sites, etc.
Engage
Provide better collaboration
between pharma companies
and stakeholders including
patient providers & payers

3. ©2016 IBM Corporation3
Innovation is the life-blood of the life sciences but is challenged by
existing skills and tools that are unable to cope with new data sources
Discover
of the life sciences CxOs are actively pursuing
product and service innovation1
Industry need Achievement gap
Insufficient skills
Lack of funding for innovation
Lack of analytical tools
Percentage of life sciences CxOs on what they believe
are barriers to implement disruptive innovation2
Key question
Source: See slide 9
44%
42%
33%
58%
 How can life sciences companies free themselves from constraints of traditional capabilities
and foster innovation?

4. ©2016 IBM Corporation4
Effective decision making is crucial for life sciences CxOs but they
lack the confidence in making strategic decisions
Decide
increase in the cost of developing a drug from
2004-20141
145%
Industry need Achievement gap
⅔
of the life sciences CxOs are
not confident in taking
strategic business decisions2
Source: See slide 9
of the life sciences executives
are not confident in evaluating
options or taking cost
reduction decisions2
454%
Key question
 How can life sciences companies take effective decisions at right time?

5. ©2016 IBM Corporation5
Moving to patient centricity is a key requirement for the industry but
life science executives struggle to respond
of the life sciences CxOs believe that consumers
demand a more personalized experience today1
Engage
Industry need
Source: See slide 9
Note: For the Life Sciences industry, the term “consumer” may include supplier, patient , physician, provider, payer, scientist
Percentage of life sciences executives that do not believe their
organizations are competent in delivering consumer service2
Achievement gap
Self service enabled for the consumers
Issue resolved quickly and comprehensively
More personalized experience68%
63%
59%
72%
Key question
 How can life sciences companies deliver better personalized treatments to its patients?

6. ©2016 IBM Corporation6
One way of answering these questions is through cognitive
computing which…
DecideDiscover
 Helps people recognize
patterns, discover insights and
make connections
 Understands the vast amounts
of information available in
whatever format it exists
 Visualizes possibilities and
validates theories like experts
 Offers evidence-based
recommendations
 Evolves continually towards
more accuracy based on
new information, outcomes,
and actions
 Provides traceability for
audit and compliance why a
particular decision is made
Engage
 Acts as a tireless agent
providing expert assistance
to human users
 Carries a conversation
naturally, e.g. in human
language
 Understands consumers
from all that is known about
them (e.g. patient records,
social tools) and enriches
interactions with context-
and evidence-based
reasoning
Source: IBM Institute for Business Value Analysis 2015

7. ©2016 IBM Corporation7
Life sciences executives believe cognitive computing will play a
disruptive role in the industry and plan to invest in this capability soon
… of the executives familiar with cognitive
computing believe it will play a critical role in
their business1
… of executives familiar with cognitive
computing believe it will play a disruptive
role in the life sciences industry1
96% of the executives familiar with cognitive
computing indicated that they are likely to
invest in it in future with the majority doing
so after 2 years2
87%
Source: See slide 9
1-2
yrs
3-4
yrs
>=5
yrs
20%
35%
41%

8. ©2016 IBM Corporation8
To learn how your organization can use cognitive computing to open
up opportunities in the life sciences ecosystem, please contact:
Heather Fraser
Global Life Sciences and Healthcare Lead
IBM Institute for Business Value
hfraser@uk.ibm.com
Sandipan Sarkar
Cognitive Computing Leader,
IBM Institute for Business Value
sandipan.sarkar@in.ibm.com
Lauren O'Donnell
Global General Manager and VP, Life Sciences
IBM Sales & Distribution
lhodonne@us.ibm.com
Louisa Roberts
Associate Partner Watson Health - Life Sciences
IBM Watson
ljrobert@us.ibm.com
Visit our website to read full report on this
topic:
http://www-
935.ibm.com/services/us/gbs/thoughtleadership/
cognitiveindustry/
Contact study authors

9. ©2016 IBM Corporation9
Slide 3: Source[1]: IBM Institute for Business Value Cognitive Computing Survey (Q13) 2015, Life Sciences (n=81). Thinking about all of the opportunities available to your
organization, to what extent does your organization plan to pursue the following types of innovation? For each type, please rate on a scale of 1 to 5, where 1 = not at all and 5
= to a great extent.
a. Enterprise Model Innovation - Innovate the role your organization plays in the value chain b. Industry Model Innovation - Innovate the industry value chain by moving into
new industries, redefining existing industries or creating entirely new ones c. Process & Operations Innovation - Revolutionize business processes d. Product & Service
Innovation - Create new or improve existing products and services e. Revenue Model Innovation - Innovate how your organization generates revenue
Source[2]: IBM Institute for Business Value Cognitive Computing Survey (Q15) 2015, Life Sciences (n=81). Thinking more about your organization in particular, what barriers
to implementing disruptive innovations in your organization do you see? (Select top 6)
a. Inadequate funding for innovation b. Insufficient business case/modeling skills to make the case for disruptive innovation c. Insufficient skilled human resources for
disruptive innovation d. Customers reservations to new possibilities e. Lack of analytical tools f. Lack of quality/reliable data g. Lack of formal processes in place to
manage disruptive innovation h. Insufficient buy-in from senior management i. Organizational complacency j. Overly aggressive ROI expectations for disruptive
innovation k. Regulatory constraints l. Risk-aversion of the organization m. Other (please specify) ______
Slide 4: Source[1] : http://www.washingtonpost.com/news/wonkblog/wp/2014/11/18/does-it-really-cost-2-6-billion-to-develop-a-new-drug/
Source[2]: IBM Institute for Business Value Cognitive Computing Survey (Q7) 2015, Life Sciences (n=81). How do you rate your organization’s decision making capabilities in
the following areas? For each selection, please rate on a scale of 1 to 5, where 1 = Very weak, 5 = Very strong
a. Evaluating options and making cost reduction decisions b. Evaluating options and making day-to-day operational decisions c. Evaluating options and making spending
decisions d. Evaluating options and making strategic business decisions e. Having confidence in tactical decisions delegated to first line employees f. Resolving
customer related issues and inquiries
Slide 5: Source[1]: IBM Institute for Business Value Cognitive Computing Survey (Q6) 2015, Life Sciences (n=81). To what extent do you agree or disagree with the following
statements about customer behavior and expectations today?, And what will be your level of agreement in three years ?
a. My company’s customers demand (will demand) a more seamless and complete experience. b. My company’s customers demand (will demand) a more personalized
experience. c. My company’s customers demand (will demand) immediacy and rapid responsiveness. d. My company’s customers are (will be) more willing to share their
personal and business data. e. My company’s customers have (will have) expanded choice sets. f. My company (will) comprehensively anticipate(s) customer
preferences.
Source[2]: IBM Institute for Business Value Cognitive Computing Survey (Q4) 2015, Life Sciences (n=81). (How competent is your organization in delivering excellent service
in the following areas? Please rate on a scale of 1 to 5, where 1 = Very incompetent challenge, 5 = Very competent.
a. Addressing customer/citizen concerns with speed and comprehensiveness b. Creating a consistent customer/citizen experience across channels c. Creating a
personalized customer/citizen experience across all interactions d. Enabling customer self service e. Fostering strong customer loyalty f. Maintaining desired
rates of customer retention g. Maintaining high quality of service
Slide 7: Source [1] : IBM Institute for Business Value Cognitive Computing Survey (Q22) 2015, Life sciences (n=71) - Please indicate to what extent you agree with the
following statements? For each statement, please rate on a scale of 1 to 5, where 1 = strongly disagree, 5 =strongly agree.
a. Cognitive computing is a mature and market-ready capability b. Cognitive computing will play a disruptive role in our industry in the next three to five years c. Cognitive
computing will play a critical role in the future of our business d. Cognitive computing is a widely-used term to define a particular combination of technologies e. Leaders
in our organization are familiar with and understand the benefits of cognitive computing to our business f. Our organization has the expertise in-house to implement a
cognitive computing solution
Source [2]: IBM Institute for Business Value Cognitive Computing Survey (Q23) 2015, Life Sciences (n=71)- In what time period is your organization most likely to implement a
cognitive computing solution?
a. 1-2 years b. 3-4 years c. 5 or more years d. Our organization is not likely to implement a cognitive computing solution e. Not sure at the present time
Sources