Rethinking the biopharmaceutical value creation and business model

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The convergence of mobile ICT with diagnostics, therapeutics etc. will disrupt the biopharmaceutical industries R&D and value creation principles and foster the advent of precision medicine combinded with "sticky ervices" as a new revenue principle for this industries as compared to the mobile industries business model

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Rethinking the biopharmaceutical value creation and business model

  1. 1. deep innovationConnected Life: the global futureDr. Thomas Wilckens,deep innovation GmbHEuroforum, November, 2012The convergence of mobile with ICT:Disrupting the biopharmaceutical industry
  2. 2. deep innovation2Disruptive Innovations in Pharma:Gamechangers of previous business modelsIndustrialisation ofdrug developmentduring WWIINew R&D technologiesNew therapeutic principlesNew alliancesNew competitionNew marketing strategiesNew alliances
  3. 3. deep innovationmhealth: a global trend and/or necessity?!3mhealth refers to the use of mobilecommunication and devices for providinghealthcare services or achieving healthoutcomesmHealth comprises wellness, fitness andmedical services (prevention & treatment)Olympians trade data fortracking devicesJuly 26th, 2102WHO/UN constitute the requirement for intelligent, mobile health care supportsystems to appropriately address the world increasing health care challengesUN Resolution A/66/L.1 16th, September 2011 on NCDs
  4. 4. deep innovationConnected life by 2020:Creating opportunities by cross-industry operations
  5. 5. deep innovationMobile ICT Technologies: Gamechanger and Enablersmobile technologies induce disruptive innovationLTE/4G Networks:Ubiquitous & 5x faster than UMTSAttributes of the world population:• only 70% access to clean water• 90% lack access to medical treatment• 90% accessible via mobile technologiesMD mobile/wireless adoption (USA)TabletsSmartphones
  6. 6. deep innovationDecentralization versus Centralization:mobile computing as disruptive innovation6Centralised IT-technologies only forfew solvent clientsUbiquitiousaccessdisruptedexitistingbusinessmodels,industries andsociety
  7. 7. deep innovationDecentralisation in diagnostics & therapeuticals:mobile computing, cloud technologies and POC drive disruption7The disruptionoff healthcareby mobile,wireless ICT isjust at thebeginning
  8. 8. deep innovation8mobile ICT will disrupt existing business conceptsIBM‘s transition in the 90ties as a role model for Pharma?Pharma’s future business model?:• Drug development & marketingmobiIe ICT enabled opportunities :• Improving efficacy in R&D• Disease management including QM• Disease prevention and health management• Value added services (VAS)IBM‘s change from a pure IT company to services and high tech innovation:• driven by technological disruption• PC = smaler, cheaper, eabling access to new clients• New players, new competition, new business conceptsHow will the health care market look like in the future?Who will reign the world of health care in 2030?
  9. 9. deep innovationcommunicable versusnon-communicable diseasesExponential population growthLack of infrastruture andorganised health care systemsLack of MDs(worldwide 200k WHO, 2011)90% access to mobile9The world‘s health care crisisIncrease requirementfor prevention & treatmentExponential growth of costsContinued lack of access;increased disease burdenThread of increased gap in access tohealth care between economiesOpportunities formhealth technologiesFramework: Consequences:
  10. 10. deep innovationThe route to precision medicine:mobile ICT & Big Data (new) as gamechangers10Symptom-based(Trial &Error)Rules-basedPattern-basedIntuitionMedicinePrecision(Personalized)MedicineEvidence-basedMedicineYesterday & emerging markets Today TomorrowWith the advent of mobile ICT enabled solutions, emerging markets will leapfrogwestern world today‘s medicine and create new business modelsAvailabledata setsAction*omicsmobile ICTBig-data
  11. 11. deep innovationDada Mining, ExpertSystem, Therapy, ContextmatchingData management,Personal health recordsMonitoring, Analytics,distributed, secure datastorage and „HealthSecurity“Mobile und portable vitaldata measurement,Preprocessig and controlCASE-specific: User interface,Data representation, Alarm,ParametersData transport, near fieldcommunication, mobil and fixNon invarsive SensoricLab on a chipTechnologiesPilotimplementationinselectedtargetmarktesThe mobile diagnostics/monitoring technology & value mapStructure, competences, plattforms, up-scaling & value added services (VAS)11HorizontalcrosssectionalfunctionsUser- and administration interfaceValue added services (VAS) and APPsCentral platform functionalities with general applicationfeatures; i.e.:• Secure data collection, storage, managment andextraction/analysis• Monitoring and alarm• Personalised health records• Expertsystems for datamining, epidemiologic analysis,therapeutic decisions etc.• Datatransmission via operatorTarget case specific diagnostics/sensor and actuator atthe frontend• Single point measurment• Repeated measurement (chronic monitoring)• Continuous measurement and monitoringStandard IntegrationCore Tech Partners UseCase spec.Frontend techNon invasive sensorsVAS create a new and sustainable business opportunity for early adopters
  12. 12. deep innovationmICT driven disruption enables access to health care:Convergence of technologies, i.e. innovation creates business opportunites12Lab-on-paper (LOP)Novartis/Proteus‘ compliance management:• New alliances form new business models• Innovation requires new alliancesHarvards‘ cheap POC diagnostics:• Diagnostics are an essential prerequisite forappropriate treatmentCaveat:• Where does the diagnosis come from?Who will advice the treatment?New POC/companion diagnostics will only create value in combination withmobile ICT and intelligent data management & value added services (VAS)!Intelligent pill & compliance:eatable microelectronics
  13. 13. deep innovationUse case, mobile point-of-care diagnostics (mPOC):Reducing costs and enabling new clinical trial strategies & theranostics:13Secure datamanagementData collection andsecure transmissionData reportingend remoteentreeAdministration, Control,Monitoring, Exception HandlingIncreasing challenges:Costs per drug trial 400 -1200k€Increased number of patients requiredExtended trial duratingSelected advantages of mLOC• Reduced monitoring costs• Enabling new recruitment• Enabling remote patient enrolementPotential for cost reduction 20-50% per trialProof of concept:Pfizer established FDA-approvedfirst virtual mobile trial POCMobilized analytics instead ofrepeated trial center visitsAdvantage of Pharmapartnering:non-regulated market withpressing innovation need
  14. 14. deep innovationImpact of mobile ICT on Pharma‘s business model:remote, real-time 24/7 access to patients and dataWho pays,when, what,why?
  15. 15. deep innovationShowcase diabetes management as an example:Integrated service concepts: Drug, device, services15Wireless, needle-free,continuous glucosemonitoringImplantable sensorsWireless controlledinsulin pumpWho will pay for costly high end products in „old“ regulated markets?Are these concepts suitable for globalisation/glocalisation?
  16. 16. deep innovationIndian Researchers To Develop Affordable Diabetes Test Strips; 09 Nov 2011Health Minister :"Diabetes is highly prevalent in the country and the strip to measure sugar level isimported as it is patented abroad and it costs Rs 30." (ca. 42ct)“.Turkey (10,7million patients, reembursement reform 3/2012):Support for meters in : 20TL = 9€; Support per strip: 0,32 TL = 14ctDiabetes Management, what‘s next?High end solutions for established markets & emerging markets?16Solutions for emerging markets?Novartis/IBM challenge winner:Dr. Diabetes for China - ESADE Business School-Universidad Ramon Llull
  17. 17. deep innovation173 examples for Reverse Innovation:Innovative products will also disrupt „old“ health care marketsLab on paperLocal Projectstart 2000Market Entree 2006US Market Entree 2010EgyptMarket Entree 2008Project Start 2006EU MarketEntree 20121 GE‘s mobile Ultrasound2 Harvard‘s Lab-on-paper3 ePayment1 developed and 1st marketed in China2 developed in USA, POC ongoing in Africa3 developed in the EU, introduced 1st in Africa
  18. 18. deep innovationOptimized disease management in emerging and „old“markets; i.e. efficient and affordable:Selected objectives (starting from scatch appying Reverse Innovation principles):mobile ICT & POC: enabling access to health careGenerate problem-oriented solutions within a contextual framework181. Market-specifically tailored diagnostic devices(test-strips, mReaders, sensors….)2. Integrated algorithm-based dosingmanagement (cloud-based and/or SmartPhone)3. High end versus low end versions for regionalmarkets and/or client groups4. Remote/mobile QM and disease managementservices in a cultural context5. Low energie, ecologically neutral6. Culturally adjusted value-added-services (VAS)7. Identify general principles applicable from feverdiagnostics to chronic condition management8. Adjust for (re-) introduction into „old“ markets21876345optimized exploitation of Pharma‘s corecompetencies & ressources
  19. 19. deep innovationMunich Network 19mobile ICT technologies disrupt existing businessNew opportunities for innovative technologies and value added servicesPrevention, Early diagnostis, MonitoringPersonalized Medicine, TheranosticsPoint of Care DiagnosticsNew products and servicesNextdisruptionMobile/wirelessdisruptionPresent Future
  20. 20. deep innovationAnticipating the convergence of all aspect of lifemobile computing, sensors, diagnostics, health/fitness/wellness apps20Mobile computingConnected diagnostics/monitoring
  21. 21. deep innovation21The best way to predict the future is to invent it!Vinod Khosla,Founder of Sun Microsystems,Serial Entrepreur & Health Care Investor
  22. 22. deep innovationIntelligent pill;eatable microelectronicsMobile ICT Technologies: Gamechanger in MedicinemHealth examples and anticipated products22Intracutane nanoparticlesCalcium-GlucoseLitium, BiohazardLOP Livertox-testAir pollutionBloodcellanalysisLab-on-paper (LOP)
  23. 23. deep innovationDeficit compensation:Anticipating the next level of remote controlled sensors & devicesImplantable MEMSEpidermal electronicsIntelligent sensor &augmented realitlyafter partiallydetach from the skinBantenna LED temp. sensorstrain gauge 0.5mmattachedto skindetachedfrom skinsiliconecrumpledcircuit5mm3mmsilicone(~50 kPa)PIPIdeviceNMP30µm7µm
  24. 24. deep innovationSystems inefficiency as percent of total economic value by systemBig data drive excellence and efficacy24Potential for improvement in health care app. 2 Trillionen US$Source IBMEconomic efficiency from data acquisition, storage, extraction and analysisOptimal fieldfor innovativeservicesandnovel businessmodels basedonMobile &wirelessICT18%
  25. 25. deep innovationDepartment of Homeland Securitys National Cybersecurit (USA, 16.05.2012):„Medical devices and smartphones can expose patient data and also lead tocyber-security problems, the Department of Homeland Security warned.”• The health care industrys adoption of mobile technology poses certain security risks to health data,according to a report by the Department of Homeland Security,Government Computer News reports (McCaney, Government Computer News, 5/16).• DHS National Cybersecurity and Communications Integration Center issued the report, titled,"Attack Surface: Healthcare and Public Health Sector" (Horowitz, eWeek, 5/16).About the Security Risks:• The report stated, "Since wireless medical devices are now connected to medical IT networks, IT networks arenow remotely accessible through the medical device.“It added that "communications security of medical devices to protect against theft of medical information andmalicious intrusion is now becoming a major concern" (Kurtz, Beckers Hospital Review, 5/17).Read more:http://www.ihealthbeat.org/articles/2012/5/18/dhs-mobile-technology-poses-security-risks-to-health-data.aspx#ixzz1vUKg1pc925The callenge:Data safety and security; see also ICT Summit 2012, Dec. 6th Munich 2011
  26. 26. deep innovationCritical health risks and cost drivers:• Transition from ICU to general unit:Wireless Sensors Relay Medical Insight to Patients and Edwards, J.Signal Processing Magazine, IEEEVolume: 29 , Issue: 3 Digital Object Identifier: 10.1109/MSP.2012.2183489Publication Year: 2012 , Page(s): 8 - 12• Transition from the clinic to home:Strategies To Cut Costs Integrated Telehealth And Care Management Program For Medicare Beneficiaries With Chronic Disease Linked To Savings;doi:10.1377/hlthaff.2011.0216Health Aff September 2011 30:1689-1697;Integrated mHealth solutions have proven to reduce readmission to both, ICU or hospitalSeemless data management between health care providers further contributes to improvedand cost effective patient management and secures improved quality servicesCaveat:Succesful technical implementation requires converging competencies ranging fromdatatransfer over device energy management to safety/security solutions combined withuser friedly value added servides (VAS).26Use case, improving health care efficacy:Seemless monitoring & Point of Care diagnostics

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