MEDICA MEDIA FORUM „ePatient/Health 2.0: Schlüsselfaktor für neue, zukunftsfähige Geschäftsmodelle der Life Sciences Industrie“ Impulsreferat von Matthias Wartenberg, Executive Director Advisory Service LifeScience, Ernst & Young, Eschborn

1. ePatient/Health 2.0:
Key factor for
new sustainable
business models
in Life Science Industry
Health 3.0

2. Ernst & Young
Publications
Progressions 2011: Beyond borders 2010 Pulse of the industry
Building Pharma 3.0 E&Y’s 24th annual 2010
New organizational biotechnology report Medical technology report
capabilities and radically reveals how firms are 2010. Firms will need to
enhanced business responding with business revisit key elements of
processes to succeed in strategies, new funding their business models.
Pharma 3.0. sources and creative deals.
Prescriptions series Life sciences insights Taking wings
Life Sciences topics Emerging markets Indian CRO/CMO market
The Smoke Detector® Business Risk Report New Horizons
Life Sciences risk topics 2010 US provider care
Cash on prescription Sales and marketing Top of mind
Working capital code matrix Healthcare
US and EMEA technology
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3. Pharma 3.0
Progressions 2010
► “If”, “when” and “why?”
► Launched in February 2010
► Tremendous media coverage
► Based on interviews with 30
executives from the pharma industry
and from “non-traditional” players
► Multiple conversations across
ecosystem
Progressions 2011
► “What”, “how” and “where?”
► Launched in Feb 2011
► Focused on implementation
► Based on interviews with 37
executives from the pharma industry
and from “non-traditional” players
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4. Pharma 3.0
From pharmas’ perspective
Drivers of ► R&D productivity ► Health care reform
change ►
►
Patent cliff
Globalization
►
►
Health IT
Consumerism
► Demographics ► Value mining
► Pricing &
reimbursement
Business
Models
Value Pharma 1.0 Pharma 2.0 Pharma 3.0
proposition Blockbuster drugs Diversified drug portfolios Healthy outcomes
Customer
Payor
Physician
Patient
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5. meamedica
Source: www.meamedica.de
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6. patientslikeme
Source: www.patientslikeme.com
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7. Pharma 3.0
The health outcomes ecosystem
Providers IT
Information
Physicians companies
Social
media
CROs
Academia Health
records
Medical
Pharma Patients technology
Telecom
Biotech Med
device
Governments
Food
Insurers
Retailers Consumer
electronics
Pharma 1.0 (drugs) Pharma 2.0 (diversified drug portfolios) Pharma 3.0 (outcomes)
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8. Pharma 3.0 is happening
eHealth
Roche – InterComponentWare Novartis – Proteus Biomedical
The Financial Times
Source:www.bloomberg.com Source: www.scripintelligence.com
Bayer – Nintendo UCB – PatientsLikeMe
Source: www.bayerdidget.co.uk/ Source: www.patientslikeme.com
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9. Pharma 3.0 in emerging markets
Leapfrogging to 3.0 ?
Mature markets Emerging Markets
► R&D productivity ► Healthcare reform ► Changing Pharma 2.0
► Patent cliff ► Health IT regulations ► Branded generics
► Globalization ► Consumerism ► Local industry ► Innovative drugs
► Demographics ► Value mining ► Health IT ► Supply platform
► Pricing and ► Consumerism Pharma 3.0
reimbursement ► Collaborations
Pharma 1.0 Pharma 2.0 Pharma 3.0
Diversified drug Pharma 1.0
Blockbuster drugs portfolios Healthy outcomes
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10. A rapidly changing ecosystem
A progress report
Developing
core competencies
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11. Pharma 3.0 repository
220 initiatives enabling health outcomes
Education ► Educational website
► Blogs
Disease ► Patient support programs
Managing patient management ► On-line communities
outcomes Adherence and ► m-Health
compliance ► Medical devices
► Data management
Decision support ► Smartphone apps
Education ► Educational websites
Health Expanding ► Educational programs
outcomes access Disease ► Healthcare delivery
management ► Innovative distribution
Financial ► Patient support programs
assistance
Meeting unmet Open ► R&D initiatives
medical needs innovation ► New ventures
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12. There’s an app for that
Investments in smartphones soar in 2010
2006–09 2010
Source: Ernst & Young. Charts show number of pharma company initiatives by type, as identified by Ernst & Young.
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13. Patients - Apps
Source: appstore by apple: www.apple.com
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14. Beyond diabetes
Investments diversify across disease segments in 2010
2006–09 2010
Source: Ernst & Young. Charts show number of pharma company initiatives by type, as identified by Ernst & Young.
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15. The ecosystem advances
Initiatives by Pharma companies
78% increase in
number of 3.0
250
initiatives
200 ► Smartphones lead the way
150 ► Moving beyond diabetes into
broad spectrum of disease states
100
► More holistic approaches to
50
improving outcomes
0
2006 2007 2008 2009 2010
About 220 Pharma 3.0 initiatives were launched by
Pharma companies between 2006 and 2010
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16. The ecosystem advances
Initiatives by non-Pharma companies
Samsung $ 2.8b Electronic health equipment
Nestle $ 0.5b Health and wellness products for diabetes, obesity, etc.
Pepsico $ 2.5b Drinks/snacks inspired by Traditional Chinese Medicine
Health innovation initiative
GE $ 6.0b
(improve care for more people at lower cost)
TELUS $ 0.8b Social network for Canadian patients to manage health
Non-pharma companies are investing much more:
at least US$20 billion
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17. Getting to 3.0
A road map for change
Developing
core competencies
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18. Pharma 3.0
Enhanced core competencies to enable health outcomes
Pharma 1.0 and 2.0 Pharma 3.0
R&D Manage Connecting
patient information
outcomes
Manufacturing
Health Expand Radically collaborative
outcomes access innovation
Regulatory Drugs and
Meet unmet
efficacy Multiple business
medical
M&S insights models
needs
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19. Connecting information
Connect
Providers IT
Information
Physicians companies
Social
media
CROs
Academia Health
records
Medical
Pharma Patients technology
Telecom
Biotech Med
device
Governments
Food
Insurers
Retailers Consumer
electronics
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20. Connecting information
Connect
Big data
Delivering New Examples of non-traditional
capabilities
outcomes business intelligence sources
► R&D functions but also „ To track, store and analyze
from external data Healthcare technologies
relationships becoming e.g., IBM is developing
Manage „ To develop care tools and
health insight-enabled
increasingly data rich interventions atfor thepoints in
patient Providers IT
Information processes key medical
► Exponential increase in
outcomes companies the cycle of care part of as
industry as a
Physicians
the quantity of data being Social three-year, $100 million
created media program
CROs
Health
Aggregators
Telemedicine
Academia
The internet of things records „ To aggregated data using
(mobile health)
common language and turn
Health records
► Connected and context
Pharma Patients Medical
data into insights
technology
Expand technologies
aware Patient registry platform
access
► Generation of real time data
Biotech Med Building solutions
Telecom Special pharmacy
device Social media
Closed gardens „ To develop insightful solutions
Governments
from data
Commercial partnerships
► Data increasingly been Food
aggregated in closed, Insurers
Examples:
proprietary systems
Meet
Retailers Consumer
electronics
Information strategy
► Bayer Diabetes Care-
Nintendo (Gameboy
► Need to negotiate access
unmet „ As a new approach to IT
medical diabetes reader)
to, collect and analyze
needs
different kinds of data „ IT will► LifeScan (J&J)-Apple and
be about informing
(iPhone Glucometer app)
in various forms driving 3.0 strategy
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21. Radical collaboration
Collaborate
Pharma 1.0 & 2.0 Pharma 3.0
e-health
IT
Bio tech
Diagno
stics
Devi- Bio-
ces tech Med tech
Telecom
PE
Payor
Provider
CRO Aca-
Pharma dem. Pharma Payor
Govt
MOC Payors IT Med tech
Payor
Devi-
ces IT
Patient
Social VC org
media
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22. Radical collaboration
Collaborate
Delivering
New business
outcomes Rigorous process for
R&D
models Pharma 1.0 & 2.0 Pharma 3.0 „ Pharma will develop large
► …require a
Manage different portfolios of business model
patient
approach to innovation experiments
e-health
outcomes
► No single entity will have IT
Bio tech
the full complement of skills,
expertise and insights to Diagnostics New approaches to IP
develop innovative Devices „ Pharma will need to Telecom to
learn
Biotech
outcomes-based business
Med tech
contribute assets and IP into
models Payor new models that they do not
PE
entirely control
Expand
A broken system
Provider
access Payor
CRO
Pharma Academ.
Pharma
► Innovation will need to be Govt
Community engagement
disruptive
► A focus on outcomes is „ A key driver of success will be
providing a catalyst for IT
the ability to engage with
Med tech
disruptive innovation
MOC Payors customers and developers in
Payor
► Assets are in place, need
Meet fundamentally different ways.
unmet
to combine them Devices
„ Open partnering and open
IT
medical Patient
needs
Social
media innovative process,
VC org
crowdsourcing
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23. Multiple business models
Operate
Key Partners Key Activities Value proposition Customer Customer
Relationships Segments
CXOs R&D, M&S Detailling
to to Drugs to Physician
Non traditionals Connecting information to Communities to
eHealth Collaboration Health outcomes (patient, families, Payor
IT Multiple business physicians) Health insurance
Telecom models Prevention Managed care
Technology Diagnosis Government
Retailers Key Resources Treatment Channels NGO
Academia Vertically integrated Adherence Detailling +
value chain, IP Self-management to Patients
to Integrated care Engagement +
Extraprise (payor, patient, HCPs,
Direct to patient Physicians
Clinical and customer
insights Retailers)
Cost Structure Revenue Streams
Classical COGS drug price x volume
to to
Shared, leveraged Health outcomes based
Capitation, Fee for service, Risk sharing
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24. Multiple business models
Operate
Key Partners
A multiplicity Key Activities Value proposition Customer rigorousCustomer
A and
systematic approach
Relationships Segments
business modelsR&D, M&S
CXOs Detailling „ Use commercial trials to
to to Drugs to develop and experiment
Physician
► Diverse new value Connecting information
Non traditionals to around newto
offerings
Communities
propositions
eHealth Collaboration Health outcomes (patient, families, Payor
IT Heterogeneous customer
► Multiple business physicians) Health insurance
Telecom
base models Prevention Manage a portfolio of
Managed care
Technology Diagnosis
► Diverse and new Key Resources Treatment
partners Government
Channels NGO
Retailers
channels
Academia Vertically integrated Adherence Detailling „ Investing in+ long-term potential
value chain, IP Self-management to of some relationships, partner
► Emerging enabling Patients
technologies to Integrated care Engagement around specific challenges,
+
Extraprise (payor, patient, bring together complementary
HCPs,
► A need to experimentClinical and customer
Physicians
Direct to patientskills and needs
insights Retailers)
Manage performance
A shift to solutions „ …of developing and scaled
Cost Structure
► Allowing to unbundle
Revenue Streams initiatives
knowledge from product „ Function as a value added
Classical COGS drug price x volume
► With models
private equity firm
to to
incorporating services
Shared, leveraged Health outcomes based
and customer insights Capitation, Fee for service, Risk sharing
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25. Building Pharma 3.0
Six business processes
Pharma 3.0
Connecting Radical Multiple business
success in Pharma 3.0
competencies for
information collaboration models
Three core
Extracting value out of large Innovative collaborations with Building and managing a
volumes of data from diverse, non-traditional partners to co- portfolio of innovation models
unfamiliar sources create value for each other
and the ecosystem
Business model development: systematically experimenting with new models
that should be created or enhanced
Community engagement: engaging to add personalized value and build trust
Business processes
Information strategy: empowering IT to guide 3.0 strategy
Performance management: measuring and communicating 3.0 value drivers
Capital strategy: adapting the capital agenda for Pharma 3.0 initiatives
Governance, risk and controls: embracing (and managing) risk in 3.0 initiatives
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26. Thank you !
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27. Contact Details
Matthias Wartenberg
Director Advisory Services
Ernst & Young GmbH
Mergenthalerallee 3 – 5
65760 Eschborn, Germany
phone +49 6196 996 16693
mobile +49 160 939 16693
Email matthias.wartenberg@de.ey.com
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