Académique Documents
Professionnel Documents
Culture Documents
ACT
BEYOND MAINSTREAM
September 2016
2016
Digital andthe
Mastering disrupted:
Transformation
All Journey
change for healthcare
How
A comprehensive
can pharma companies
guide to reinventing
flourish in
companies
a digitized
healthcare world?
2 THINK ACT
All change for healthcare
M U LT
3
IPLE
OPPO
THE BIG FO R H
RTUN
ITIES
EALTH
CO M P CAR
ANIES E
P. 11
>200 bn
USD is the estimated value of the digital health market
by 2020, compared to USD ~80 bn today.
Page 4
4.5 bn
USD in funding was raised by the digital health
start-up environment in the US in 2015 alone.
Page 13
3
stages of the digital transformation of healthcare
defined as mirror, identify and implement.
Page 14
THINK ACT 3
All change for healthcare
A
MOBILE AND WIRELESS APPLICATIONS
ARE DRIVING THE HEALTH MARKET
Digital health market development 2015-2020 [USD bn]
206
+21% p.a. 24 EMR/EHR
+4%
26 TELEHEALTH
172
23 +15%
46 MOBILE
142 HEALTH
22
22
+41%
118 37
21 19
110 WIRELESS
96 HEALTH
28
20 17
+23%
89
79
20 21
14
73
14
12 59
8 48
39
Taking responsibility:
A new role for patients
and the implications for
healthcare.
Thus far, our interactions with healthcare systems limited to overall lifestyle habits, and do not
have been clearly defined and static. Patients' princi- (fully) document a patient's illnesses and diseases.
pal interface to healthcare services has been a prima- There has, however, been a shift in the role and the
ry care physician. Medical knowledge regarding ability of the patient to take more responsibility for
disease and treatment has been defined and dissemi- their own healthcare issues, and this is bringing about
nated solely by physicians. While more health-orient- a fundamental change in the entire healthcare ecosys-
ed people also tend to seek the advice of pharmacists tem. In the future, the vast majority of patients will
and patient groups when making decisions concern- have a much more participatory role in their own diag-
ing their health, interaction with pharmaceutical nosis and treatment. Health-related data will be stored
companies remains unheard of. Clinical history re- in a cloud-based health record, which can be shared
cords continue to be off limits to anyone other than with respective doctors and insurance companies. The
the patient and their physician, often end up being traditional patient-physician relationship will no lon-
lost and are therefore of no use whatsoever for other ger have the central role it has enjoyed thus far. In-
healthcare professionals. stead, we expect mobile online platforms and agencies
The internet and widely available digital informa- to be the core interface between patient and medical
tion have already brought about a major shift in the expert. An interactive approach such as the German
patient's role. Patients now have access to an extensive start-up Medlanes may well disrupt the healthcare sys-
network of medical information, both for education tem in the same way as other innovative concepts like
purposes and to communicate with other patients via Uber have changed our perception of mobility. Patients
the internet with regard to their health status and treat- will no longer rely on a single and local physician, but
ment options. An increasing awareness of ones own will be able to access such platforms when they have a
health status is supporting lifestyle changes and active- specific medical need. A network of physicians linked
ly contributing to the prevention of disease. That said, to the platform will be able to provide initial consulta-
access to the healthcare system has not changed dra- tion and advice, before referring to a specialist and
matically. The point of contact for patients remains the scheduling an appointment with the preferred doctor
physician, who also determines the appropriate course or hospital clinician. Remote medical advice will grad-
of treatment. Digital solutions and electronic health ually dissolve national boundaries even further as pa-
records are still not available in a wider sense, remain tients seek the best medical services and specialists.
6 THINK ACT
All change for healthcare
B
DISRUPTION OF THE HEALTHCARE SYSTEM
New entrants are challenging traditional healthcare systems and have the potential to disrupt current structures.
HEALTHCARE AREA OF
SYSTEM DISRUPTION
Health
insurance
Balanced A
A diet/
fitness HEALTH RELATED
B B
BEHAVIOR/
C C C PREVENTION
General/ B
Consumer/ GP/
special Rehab
patient specialist
hospital DIAGNOSIS
Emergency
Rebate C
Pharmacy contracts
THERAPY
Home- Pharma/
C care medtech
Electronic health records and digital communication sales as they begin to operate in a more complex, mul-
with medical practitioners will give further credence to tichannel environment. B
e-subscriptions while also challenging the traditional In the future, medical treatment will be supported by
business models of pharmacies, which will need to re- a range of diagnostic tools and data provided by smart
think their digital approach and store concepts. pills, sensors and metabolite patient profiling. Real-life
In addition, patients will also be better informed data on treatment success rates can potentially increase
about alternative treatments and will expect a more ho- the treatment take-up rate, thus influencing the outcome
listic view not only from their respective physician and for patients, insurers and pharmaceutical companies.
insurance company, but also from pharma firms. Direct Given the backdrop of greater competition with
communication between patient, physician and the other providers in an increasingly transparent health-
pharmaceutical manufacturers will increase, with the care world, a successful treatment regime is a valuable
latter requiring a different skill set for marketing and performance indicator for the physician in charge.
THINK ACT 7
All change for healthcare
Life-science stake-
holders may well face
disruption.
Customer-centric healthcare systems and the develop- treatment programs via engineered stem-cells and ge-
ment of new treatment regimens can potentially disrupt nome editing have the power to revolutionize the con-
the entire healthcare system. Each stakeholder will have cept of treatment far beyond the scope of classic phar-
to thoroughly rethink its current business model and po- maceuticals. However, its not only the products that
sition itself within a changing environment that increas- will change in the future but also the way in which a
ingly embraces the concept of P4 medicine, first de- pharmaceutical company interacts with its environ-
scribed by L. Hood as a medicine that is predictive, ment. Currently, major players are embracing the multi-
preventive, personalized and participatory. Health will no channel approach aiming for holistic interaction with
longer be defined by the absence of a disease, but will be customers. This will reach physicians, pharmacies and
seen in the more holistic context of a person's wellbeing. other healthcare professionals, and further facilitate
This approach will therefore also require the interdisci- the integration of patients into the product lifecycle.
plinary connection and collaboration of various health- Pharmaceutical companies will have to close the last
care players. Roland Berger has evaluated the role of key mile to the patient, in order to actively collect and inter-
stakeholders in the healthcare systems of the future. C pret real-life data used to assess, approve or price their
products. Hence, pharmaceutical companies will be
PHARMACEUTICAL COMPANIES: MANAGING able to accelerate clinical testing, significantly reduce
BENCHSIDE TO PATIENT AND BACK the development cost of new products and improve
Pharmaceutical companies will be disrupted by the dig- their propensity for innovation. As access to such data
ital transformation in healthcare. New entrants and dis- will still be restricted by law, direct-to-patient models
ruptive business models are already challenging incum- will be required to collect data on a voluntary basis with
bent pharmaceutical firms. For selected indications and data access and use being strictly regulated.
diseases, digital treatment regimens will compete with
traditional medication. Even today, we see the FDA and MEDICAL DEVICE COMPANIES: GATEKEEPER
EMA approving software solutions to treat serious con- TO PATIENT DATA?
ditions such as depression1. Smart pills and sensor-sup- As patient data and insights are becoming increasingly
ported treatment programs will further encroach on the important, the patient interface will be a key success fac-
business of the established pharmaceutical players or tor for future digital business models in the healthcare
they will embrace them by information-guided therapy environment. While smartphones and apps will continue
programs such as that on offer from Roche and Founda- to be convenient tools for monitoring patient wellbeing,
tion Medicine. Furthermore, recent discoveries in bio- medical devices are critical to gaining greater medical in-
medical medicine enabling the direct and individual sights into the human body, as well as to addressing and/
use of a patient's genomic information for personalized or treating health issues. Through digitization, better
1 E.g. Gaia's deprexis
8 THINK ACT
All change for healthcare
its current reactive mode, which same time, globalized healthcare will create new pay-
ment models with increasing weight and willingness
is focused on treating disease, for out-of-pocket payments. The availability of elec-
to a P4 medicine mode, which tronic health records will also dismantle traditional
patient-physician relationships. Access to patient med-
is medicine that is predictive, ical records will no longer be limited to those individu-
preventive, personalized and als directly involved in the generation of data. Addition-
ally, remote patient monitoring will be another lever
participatory" encouraging the exodus of treatment to outpatient facil-
LEROY HOOD, M.D., Ph.D. ities, thus challenging the role of hospitals, too.
P4 Medicine Institute Chairman and
Institute of Systems Biology President PAYORS: THE PROSPECT OF BEST-IN-CLASS
GLOBAL HEALTHCARE SERVICES
Once a diagnosis has been made, payors today have ac-
Source: Roland Berger cess to the most comprehensive medical health records
THINK ACT 9
All change for healthcare
possible. Data analysis and consumer insights comple- for the treatment of epilepsy. This kind of technology
ment the picture, aggregating data to an almost holistic may well provide the framework for a revolution in per-
view of an insured person's health status. The introduc- sonalized drug dosing and medication. Pharmacies
tion of electronic health records will enable physicians able to manufacture such products themselves would
to access a patient's entire clinical history. Combined be able to take their business model out of the tradition-
with initial online advice for patients, this approach will al value chain.
potentially significantly decrease office and emergency The pharmacist's skill set and profile will also
visits and therefore reduce healthcare costs in general. change significantly, with much more emphasis being
Innovative treatment supported by digital tools to in- placed on the advisory role, thus enabling a more inti-
crease patient adherence will offer further cost saving mate relationship with the patient and smart data ac-
potential to insurance companies without lowering the cess to pharmaceutical companies.
quality and output of the healthcare services on offer. 3D printing is likely to impact the prevailing busi-
Real-time data will feed predictive modeling algorithms, ness models of pharmaceutical wholesalers. That said,
which will revolutionize case management. In addition, 3D-printed and customized pills are likely to remain a
the increased use of metabolite profiling will facilitate niche segment rather than becoming the norm. Whole-
deeper and more precise insights into the health eco- salers will continue to play a role in the healthcare sys-
nomics of various treatment options. Even patient-spe- tem of the future. With the availability of a connected
cific risk profiles and risk-adjusted insurance fees could health system and e-prescriptions, however, as medi-
be a feasible option if regulatory hurdles can be over- cine becomes more stratified and personalized, in-
come. Nevertheless, more global and connected health- creasingly direct-to-customer shipments will become
care provision will force insurance companies to devel- more and more relevant for wholesalers keen to exploit
op new business models offering patients access to new opportunities. New business models such as these
worldwide and best-in-class healthcare services. At the may also lead to increased margins in an environment
same time, this attractive vision may also increase the that remains highly competitive. In order to survive
complexity payors will have to deal with in the future. and prosper, wholesalers will have to build expertise in
The easy access to healthcare services apps may facili- B2C business with particular focus on healthcare man-
tate a tremendous increase in physician consultation agement, marketing and sales.
requests. More detailed and precise diagnostics and
therapies will also likely come at a higher price. Payors GOVERNMENTS AND AUTHORITIES NEED
will have to be open to more patient-focused diagnosis TO PROVIDE A FRAMEWORK FOR INNOVATION
and treatment procedures and adjust their service port- Thus far, governments have controlled the level of
folio to match. healthcare expenditure and regulated the market using
a system of approval and access procedures. Also, it is
PHARMACISTS: ADJUSTING TO A NEW ROLE crucial to ensure that the right of a healthy individual to
Pharmacists have been the keystone between the phar- personal data protection does not stand in the way of
maceutical industry and patients for a very long time. those patients that may benefit from advancements in
Whether or not their role will be more or less important health data science, thus pre-empting their right to the
in the future will depend on the pharmacist's ability to best possible treatment. Realizing that analogue-based
change, adapt and digitize their service. Increasingly, regulations are not the ideal foundation for change, they
patients are seeking direct contact with pharmaceutical have already started the process of careful digital adapta-
manufacturers to learn more about diseases and the rel- tion. However, Dr. Google has already leapfrogged the
evant treatment options. Digital physician consultation regulations, and the clock has been ticking faster ever
and e-prescriptions will further reduce stationary phar- since. Given the savings potential within healthcare, gov-
macies' influence on treatment. Online pharmacies will ernments need to open up and drive this industry shift
become more utilized. Additionally, technology trends further by providing the infrastructure and regulatory
such as 3D printing may offer new opportunities to rev- cornerstones. Secure data management, providing glob-
olutionize traditional business models. In August 2015, al access to healthcare services and driving a culture of
the FDA approved the first 3D-printed drug, SPRITAM innovation will be the key challenges for national bodies.
10 THINK ACT
All change for healthcare
The transformation of
pharma and medtech.
Is healthcare ready for
digital?
Digitization and digital transformation are probably tegrated digital approach. The design and development
the most obvious buzzwords and current trends in of such products will require providers to take a view of
healthcare today. New digital products and technolo- the healthcare system of the future and the new role of
gies are significantly changing prevalent industry each stakeholder embedded in this changing environ-
structures and habits. Nevertheless, traditional phar- ment.
maceutical players are only now beginning to recog-
nize the nature of this transformation and are starting TRANSFORMING PHARMA AND MEDTECH:
to address changing industry needs with specific initia- THE IMPACT OF DIGITAL
tives and partnerships. Pharma's key competency is to provide cutting-edge
Prominent examples are Novartis' collaboration therapies to consumers, patients and physicians that
with Google on smart lenses, which are already expect- address strong medical needs and improve people's
ed to begin clinical human trials in 2016 as well as health conditions. Medtech is providing the corre-
Roche's work with Foundation Medicine for genome sponding diagnostics, more critical than ever in a
profiling in cancer immunotherapies. More recent ex- world of personalized medicine as well as complemen-
amples include the partnership of Japanese Daii- tary therapeutic solutions. How can suppliers leverage
chi-Sankyo on an AFib remote patient monitoring pilot digitization to enhance this value proposition and to
with Partners HealthCare; GSK and Boehringer Ingel- succeed in a fully digitized society?
heim's collaboration with Propeller Health on connect- In order to help companies navigate the hype and
ed inhalers; and Otsuka's partnership with Proteus exploit the full potential of digitization, we have in-
Digital Health on the development of a drug-sensor vented the value pocket concept. It helps companies
combination for the antidepressant Abilify. understand how their market segment will change
It would appear that pharmaceutical firms have fi- through digitization, what the profitable value pock-
nally seen the light and, recognizing the economic val- ets will be based on, their specific business essence
ue of digital products and solutions, are about to start and how much needs to be invested where for what
the commercialization of their first digital products. return. A rigid analysis around the four pillars of
However, many initiatives still lack a holistic view of the endgame scenario, business essence, value pockets
healthcare system of the future and remain isolated and size of the prize will provide the clarity manage-
beacons rather than examples of a comprehensive, in- ment requires to make the right decisions. D
THINK ACT 11
All change for healthcare
D
DIGITAL ESSENCE MATRIX
Your Digital Essence shows you the way through the digital maze
EVOLUTIONARY REVOLUTIONARY
APPROACH APPROACH
Input 1: Input 3:
Business essence Value pockets
Basis for defining core Digital initiatives that generate
competencies of business value to the business in the future
COMPE-
TENCIES
Basic
Strengthen
your core
E
DIGITAL VALUE POCKETS ALONG THE VALUE CHAIN
Understanding how digitization will impact your market segment
MULTICHANNEL
MANAGEMENT
F
QUANTIFYING THE VALUE POCKETS
Impact of digital health solutions on the value tree
NUMBER OF
PATIENTS +
Volume
Sales
LENGTH OF THERAPY +
Price REIMBURSEMENT +
Operating
profit COGS
SALES FORCE
Marketing/
Sales EFFECTIVENESS
Cost
G&A
CLINICAL
R&D
TRIALS COST
Source: Roland Berger
THINK ACT 13
All change for healthcare
Translated into the value chain of suppliers, digital val- focusing on analyzing large amounts of genomic data,
ue pockets are substantially different at each level of they intend to strengthen their leadership in personal-
the value chain. Whereas data analytics can help sup- ized medicine. The CEO of Swiss rival Novartis, Joseph
port R&D, production and digital health (management) Jimenez, is said to have invested USD 2-5 bn in bolt-on
services, predictive maintenance can clearly support acquisitions including for companies within the two
manufacturing while closed loop systems and elec- main segments of innovation he sees in pharmaceuti-
tronic patient record technologies are critical to sup- cals, regenerative medicine and digital health. Accord-
port the patients to manage their disease. E ing to his estimations, 25% of healthcare investment
today is wasted this is clearly an opportunity for new
QUANTIFYING THE VALUE OF THE technologies. For pharma and medtech corporations,
DIGITAL TRANSFORMATION digitization may also be used to reduce costs signifi-
Ultimately, for each company it comes down to how the cantly either in R&D, where innovative pharmaceutical
transformation impacts the financial KPIs. Hence, companies invest 15-20% of their sales, or in General
each investment must impact positively and the under- and Administration cost positions. In clinical develop-
lying assumptions are key to understanding the finan- ment where R& D spending is highest, Amazon data
cial mechanics as well as the size of the opportunity. services have shown cases in which they have been able
With a value tree methodology, Roland Berger teams to reduce clinical trial costs by USD 450k, and reduce
assess the financial impact, opportunities and risks of patient numbers as well as the costly time period of
the digital health transformation process and support trials by 30%.
company leaders in making the right decisions based
on a full understanding of the underlying facts. Ac- ENTRY OF NEW PLAYERS IS PERHAPS
cording to our experience, digital health can help in- THE BIGGEST CHALLENGE TO TRADITIONAL
crease sales by improving the competitive positioning, BUSINESS MODELS
as well as enhancing profitability by doing the right Supported by new technologies providing much great-
things more efficiently. In Figure F the Roland Berger er insight into a patients medical condition, clinical
value tree shows how we assess the financial impact of knowledge and expertise are no longer the preserve of
health digitization. F traditional healthcare players. Electronic health re-
Digitization can help increase the revenue streams, cords and metabolite profiling open up data for new
either via market share gains vs. (generic) competition and non-healthcare players, too. The healthcare start-
or via pricing and reimbursement agreements for digi- up environment is currently experiencing a major
tal services. The latter are already being employed in boom with highly innovative business models and
healthcare systems such as those in the UK and Germa- ideas challenging more traditional approaches and
ny and are helping stabilize the top line. Digital solu- further driving the transformation of this industry.
tions for disease management have a supportive im- In the US alone, the digital health start-up environ-
pact on the core business, especially in areas of low to ment raised USD 4.5 bn in funding in 2015, surpassing
medium differentiation such as generics, biosimilars medical devices and closing the gap to biotechnology.
and patented drugs in competitive market segments, Most of the funding was raised for consumer engage-
e.g. some cardiovascular diseases. ment solutions and personal health tools, areas that
While apps supporting compliance/adherence of traditional pharmaceutical players have thus far ne-
drugs, such as the Merck Groups Rebif Smart inhaler, glected. Similar to other industries, such as consumer
or various chip-in-a-pill solutions in the UK have the retail or automotive manufacturing, technology giants
power to increase sales short term by magnitudes of like Amazon and Google have already targeted health-
5-10%, companies are increasingly looking for break- care as a key future investment area and will come up
through solutions that give them moonshots rather with more high-impact innovations, such as Google
than incremental growth. contact lenses for measuring diabetes and data analyt-
One such company pushing the boundaries of in- ics services provided by Amazon and Google to create
novation in personal medicine is Roche. With the pur- and leverage critical new data insights for pharma and
chase of Foundation Medicine, a US based company healthcare.
14 THINK ACT
All change for healthcare
ABOUT US
Roland Berger, founded in 1967, is the only leading global
consultancy of German heritage and European origin.
With 2,400 employees working from 34 countries, we have
successful operations in all major international markets. Our
50 offices are located in the key global business hubs. The
consultancy is an independent partnership owned exclusively
by 220 Partners.
STAY TUNED
www.twitter.com/
RolandBerger
MORRIS HOSSEINI
Partner Editor
+49 30 39927-3342 PAUL ENTWISTLE
morris.hosseini@rolandberger.com paul.entwistle@org.rolandberger.com
PETER MAGUNIA
Partner
+49 30 39927-3587
peter.magunia@rolandberger.com
This publication has been prepared for general guidance only. The reader should not act according to any
information provided in this publication without receiving specific professional advice. Roland Berger GmbH
TA_16_035
shall not be liable for any damages resulting from any use of the information contained in the publication.