Disrupt or Be Disrupted - Accenture

Accenture Life Sciences Rethink Reshape Restructure...better patient outcomes

Disrupt or Be Disrupted Prescriptions for life sciences in the age of digital medicine

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A profound transition Life sciences companies are moving from volume-based business models to value-based ones. Driving the transition: specialized therapeutics and patients themselves. And all of it is enabled by digital technologies that allow for a much more granular view of patients and their treatments—often delivered at a much lower cost. The leaders of the future will be the ones that disrupt traditional modes of care, embracing digital and analytic-driven insights and putting improved patient and economic outcomes front and center of their business models, operating models and cultures. The hallmark of this profound transition within the life sciences industry, which is sweeping across North America and Europe, involves moving from being product centric— where volumes of therapeutics separated winners from losers—to providing better outcomes to patients through a combination of transformative therapeutics, deep patient population insights, and digital services.

Get ready to disrupt...or be disrupted.

Driving the transition: new incentives for reimbursement, specialized therapeutics and patients themselves.

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Tsunami of change When the transformation of an industry happens, people talk about “a perfect storm.” For healthcare, it’s been more of a tsunami.

Health providers...

New collaborations...

(e.g., doctors, hospitals, clinics), once encouraged to provide whatever care they deemed appropriate, now are starting to operate within narrow, evidence-based guidelines and controls. Many, if not most, have incentives to shorten patients’ length of stay, limit the scope of their treatment, and avoid acute care facilities.

among healthcare stakeholders combined with big data and new analytics are rapidly shaping the way all parties come together and crack the code on a more integrated approach to patient care. This is enabling entirely new ways of measuring treatment program effectiveness, improving patient access to care and managing to deliver value and outcomes—in real time. These data-infused, real time collaborations are disrupting the way healthcare is approached by allowing visibility into what patients are actually doing at each step of the care process. This new visibility is enabling the industry to identify gaps and barriers to achieving the best outcomes for patient and health systems and architect programs and services that fill these gaps.

Providers are evaluated not only on their ability to offer individualized care that begins even before a patient enters a facility, but also on their ability to continue it into their home and workplace to ensure a positive outcome and avoid readmission. At the same time, industry pipelines are increasingly filled with highly targeted and specialized therapeutics. These treatments are more expensive to administer, so proving their value is more critical than ever. The pressures to show that realworld outcomes are comparable to those seen during clinical trials are ever increasing. These same health providers are facing intensified competition as unexpected players such as health retailers like pharmacies, for example, enter the market of direct care services, as payers move further into the business of providing and managing care, and as companies from other industries move into the business of helping patients achieve and sustain their health.

Technology... is another major catalyst for this renewed focus on outcomes. Why? For the first time, thanks to analytics and big data, healthcare players can come together to share and analyze patient data to fully understand the patient journey. Armed with this understanding, they can collectively work to determine the steps to take and services to provide that will improve patient care and health outcomes in very cost-efficient, effective ways.

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Life sciences companies... themselves are being forced to change their view on who might be prospective collaborators and competitors. Former technology companies coming from both the consumer and business-to-business services sides are now explicitly becoming healthcare companies. Some of these are the new “Digitalsgone-Healthcare,” companies such as Amazon, Google, Apple, SalesForce, and QualComm who are building out the next generation of digital health and healthcare infrastructure and partnered with Novartis, Roche, and Biogen. Other “Healthcaregone-Digitals,” companies such as Philips and GE, are leveraging their existing infrastructure and connecting it up to broad cloud services to enable a medical Internet of Things (IoT) at scale. These are the disruptors, partners and sometimes even competitors of the future as digital medical, monitoring and engagement approaches enable outcomes and value.

Patients... are becoming much more active and intelligent consumers of healthcare. According to an Accenture 2015 survey of 10,000 patients around the world, 65 percent said they want more help and guidance before they begin treatment for a disease.1 Their greatest frustration: a lack of notification of being “at risk” for a condition. The same survey also found that a majority of patients (81 percent) are unaware of the services available to them across the patient journey. This lack of awareness held true across all seven therapeutic areas covered in the survey. These findings are evidence of a true “consumerization” of healthcare, one where the patient is more appropriately demanding of the quality, efficacy, and responsiveness of their services.

To navigate this tsunami of change, the strategies of all the participants in healthcare will need to evolve. These strategies will likely lead to highly differentiated roles in the healthcare ecosystem with a profound and lasting pivot to the patient; where life sciences companies provide a powerful combination of products and services directed to provider systems, physicians and patients that ensure improved patient outcomes and value for the health system.

Key Healthcare Trends 1

Payer pressure to deliver value through improved patient outcomes and/or improved health economics.

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Need for more efficient use of healthcare resources, both financial and healthcare staff time.

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Growing maturity in digital and data solutions improves the ability to enable delivery of multi-disciplinary healthcare.

Figure 1. Unconnected “fee for service” models are being replaced by “value-based” models. Unconnected “fee for service” models increase cost

New “value-based” models coordinate health services

1 Are Patient Services Pharma’s Best Kept Secret? Patients Weigh in on the Patient Experience,” Accenture 2015. http://www.accenture.com/us-en/Pages/insight-patient-services-survey-unmet-needs.aspx

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Operating on life sciences models Creating programs that are outcome-based, with a set of services directed to provider systems, physicians and patients, will require significant changes to current operational models. There are three approaches to patient services that life sciences players are adopting in order to up their game in patient services and move from volume to value:

Patient Engagement It is becoming standard to have patient engagement and patient services entities that can provide critical reminders and support for the patient while on a therapy or therapies. Mobile apps providing disease and therapy-specific tools, and care coordination linkages between patient and provider—for instance, providing reminders to patients to take their medicines on schedule and activity trackers for patients with diabetes. For example, new Hepatitis C medications have launched around this infrastructure and companies with deep pipelines in a single therapeutic area – such as Biogen2 with multiple sclerosis – have started their own dedicated patient services operating units.

Patient Services In this approach, mobile apps and provider-facing tools (like treatment algorithms) enhance the ability to identify high-responder patients and collect patient outcomes in a real-world data registry. Entrepreneurial companies such as WellDoc3 and Propeller Health4 are now working with payers and providers bridging between the void between patient, provider, and life sciences company.

Patient Care Management This is a fully integrated approach where a company partners with a provider system or multiple systems to advance the status of a population and individual patients within the population, usually as part of a service-based revenue model. One example: working with Salesforce.com, Philips has launched HealthSuite Digital Platform,5 an aggressive hospital-to-home connected-care platform. In addition, Linde and Medtronic,6 (Diabeter in Europe and CareLink Network) have created a patient care management businesses.

Biogen’s own webpage, https://www.abovems.com Welldoc’s website, http://www.welldoc.com/ 4 First World Pharma, “FDA clears Propeller Health’s digital health platform in association with GlaxoSmithKline, Boehringer Ingelheim inhalers,” http://www. firstwordpharma.com/node/1301223#axzz3go9VRgO1 5 Gigaom.com, “Philips launches wearable for chronic illness, to make the internet of things medical-grade,” https://gigaom.com/2014/10/13/philips-launcheswearable-for-chronic-illness-to-make-the-internet-of-things-medical-grade/ 6 Medtronic’s website, http://www.medtronicdiabetes.com/treatment-and-products/carelink-personal-diabetes-software; http://www.usa.philips.com/healthcare-innovation/about-health-suite 2 3

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Shifting from volume to value Life sciences companies will increasingly move towards the use of real-world data, advanced analytics, and focused sets of services as the basis for their contracting. Not because they are required to do so, but because they have a higher likelihood of receiving fair reimbursement for their novel therapies and devices where they are linked to value creation. However, moving from volume to value will require investments in new areas and collaborative operating approaches for commercial and medical comparable to what R&D is going through. Key elements of this shift are: The move from the age of business intelligence to the age of predictive intelligence and management

Such value-based agreements require foundational capabilities:

Broad and easy access to large volumes of clinical data with highly advanced analytic technologies are increasingly ubiquitous and not a differentiator. The emphasis is now on collaboration, value-based data acquisition and advanced analytic capabilities. These are required to gain insight into approaches and care coordination activities that can substantially improve patient outcomes and increase the value realized by the health system. Not all data will be “real-world” from the perspective that they come from electronic medical records, genomic/genetic or social sources. But increasingly this will be the case as reimbursement is more value-based, medicine more digital, and go to market models involve patient and provider facing services.

(2) access to historical real-world data to establish a baseline

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(1) access to real-world data in real time to support diagnosis and treatment selection

(3) advanced predictive analytics and engagement technologies during the course of treatment in support of clinicians, patients and their families for adherence and treatment response monitoring (4) quality, outcome and value metrics mutually agreed to and based on real-world that are made available to the contracting pharma company and health system with no information asymmetries. Whereas accomplishing all of this would have been technically difficult and cost prohibitive just two to four years ago, all of this is doable today from a technical and cost standpoint. Entire ecosystems of companies are assembling to create the solutions at scale – Epic,7 Apple,7 and Philips to name a few – and enabling outcomes-driven services and enterprises. While privacy requirements may vary across regions, the emerging technologies and market intermediaries can put into place the necessary infrastructure to provide end-to-end solutions.

Forbes, “Behind Epic Systems’ Alliance With Apple,” http://www.forbes.com/sites/zinamoukheiber/2014/06/04/behind-epic-systems-alliance-with-apple/

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You can’t do it alone The scope and scale of a beneficial care management solution for most patient populations is beyond what any one healthcare provider or any one life science company can take on. This drives a need to understand the entire patient and provider journey so that gaps can be identified, solved for, and collaboratively deployed. As our survey revealed, patients’ lack of awareness of the services available to them is a hindrance to being able to deliver better patient outcomes. This lack of awareness begins before treatment options are determined and persist through treatment initiation and maintenance. Patients look to their personal care providers as the primary source of information and service. But this is often the most resource constrained part of the health system. So, while patients continue to see their physician or other health professional as their lead source for information and services, they are increasingly open to digital forms of communication and content. This is especially true of patients who are 18 to 30 years of age who are “digital natives.”8

Value innovators: the new definition of leadership: The definition of ‘preferred partner’ will evolve and create a greater separation between those that lead and those that follow. Those that are defined as leaders in the future will be value innovators, bringing a combination of scale, technology depth, analytic aptitude, advanced partnerships and open operating models to bear. The pace of market change will accelerate. Cycles will no longer be tied only to patient expiry or new indications, rather we’ll see services and value-based contracting models delivering new value to patients and the health systems at an accelerating pace. The pace of change and benefit being brought to patients will be set by these new leaders. Those not taking on this role will fall far further behind than they ever did before. These trends and the speed of change have not been lost on advanced technology companies, life science company venture funds, and private equity investors. They are creating funds and starting companies in the areas of advanced analytics to guide new services. Over the course of the last several years, while established companies have invested hundreds of millions of dollars, venture investors placed $4.1 billion into 258 digital health companies last year, according to venture funding data from Rock Health.9 In fact, Roche,10 Novartis,11 TriNetX,12 and GoogleX13 have all recently announced investments and relationships totaling more than $2 billion in advanced analytic and treatment selection, remote monitoring, and next-generation real-world data acquisition for regulatory and non-regulatory clinical studies.

This drives a need to understand the entire patient and provider journey so that gaps can be identified, solved for, and collaboratively deployed.

8 Are Patient Services Pharma’s Best Kept Secret? Patients Weigh in on the Patient Experience,” Accenture 2015. http://www.accenture.com/us-en/Pages/insight-patient-services-survey-unmet-needs.aspx 9 Forbes, “Digital Health Venture Funding Doubled In 2014” http://www.forbes.com/sites/theapothecary/2015/01/07/digital-health-venture-funding-doubled-in-2014/ 10 Forbes, “Roche Spends $1.03 Billion for Majority Stake In Foundation Medicine,” http://www.forbes.com/sites/matthewherper/2015/01/12/roche-spends-1-03-billion-for-majority-stake-in-cancer-genomics-firm/ 11 Mobil Health News, “Novartis, Qualcomm to launch $100M “beyond the pill” investment fund,” http://mobihealthnews.com/39624/novartis-qualcomm-to-launch-100m-beyond-the-pill-investment-fund/ 12 https://www.linkedin.com/in/jeremysohn 13 Wall Street Journal, “Novartis and Google to work on Smart Contact Lenses,” http://www.wsj.com/articles/novatis-google-to-work-on-smart-contact-lenses-1405417127

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Pivoting to the patient More and more companies are collaborating, creating ecosystems that make it possible for them to drive value and lower cost. Creating a wave of disruption that will ultimately benefit the patient first and foremost. The coming months will see the transition from pilots to full-scale deployment of highly targeted solutions and entirely new business models, increasingly more reliable and robust digital infrastructure connecting devices and across settings (e.g., home, clinic, car, etc.). Those that lead will be true value innovators and accelerate investment to fully evolve their operating models from volume based to value based, creating previously unseen differentiating and distinctive partnerships.

So the question remains: Are you going to disrupt or be disrupted in this new healthcare world? Footnotes 1 Are Patient Services Pharma’s Best Kept Secret? Patients Weigh in on the Patient Experience,” Accenture 2015. http://www.accenture.com/us-en/Pages/insight-patientservices-survey-unmet-needs.aspx 2 Biogen’s own webpage, https://www.abovems.com 3 Welldoc’s website, http://www.welldoc.com/ 4 First World Pharma, “FDA clears Propeller Health’s digital health platform in association with GlaxoSmithKline, Boehringer Ingelheim inhalers,” http://www.firstwordpharma. com/node/1301223#axzz3go9VRgO1 5 Gigaom.com, “Philips launches wearable for chronic illness, to make the internet of things medical-grade,” https://gigaom.com/2014/10/13/philips-launches-wearablefor-chronic-illness-to-make-the-internet-of-things-medicalgrade/ 6 Medtronic’s website, http://www.medtronicdiabetes.com/ treatment-and-products/carelink-personal-diabetessoftware; http://www.usa.philips.com/healthcare-innovation/ about-health-suite

8 Are Patient Services Pharma’s Best Kept Secret? Patients Weigh in on the Patient Experience,” Accenture 2015. http://www.accenture.com/us-en/Pages/insight-patientservices-survey-unmet-needs.aspx 9 Forbes, “Digital Health Venture Funding Doubled In 2014” http://www.forbes.com/sites/theapothecary/2015/01/07/ digital-health-venture-funding-doubled-in-2014/ 10 Forbes, “Roche Spends $1.03 Billion for Majority Stake In Foundation Medicine,” http://www.forbes.com/sites/ matthewherper/2015/01/12/roche-spends-1-03-billion-formajority-stake-in-cancer-genomics-firm/ 11 Mobil Health News, “Novartis, Qualcomm to launch $100M “beyond the pill” investment fund,” http://mobihealthnews. com/39624/novartis-qualcomm-to-launch-100m-beyondthe-pill-investment-fund/ 12 https://www.linkedin.com/in/jeremysohn 13 Wall Street Journal, “Novartis and Google to work on Smart Contact Lenses,” http://www.wsj.com/articles/novatisgoogle-to-work-on-smart-contact-lenses-1405417127

7 Forbes, “Behind Epic Systems’ Alliance With Apple,” http://www.forbes.com/sites/zinamoukheiber/2014/06/04/ behind-epic-systems-alliance-with-apple/

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About Accenture Life Sciences

@AccentureStrat @AccentureLifSci

Accenture’s Life Sciences group is dedicated to helping companies rethink, reshape or restructure their businesses to deliver better patient outcomes and drive shareholder returns. We provide end-to-end business services as well as individual strategy, digital, technology and operations projects around the globe in all strategic and functional areas—with a strong focus on R&D, Sales & Marketing and the Supply Chain. We have decades of experiences working hand-in-hand with the world’s most successful companies to improve their performance across the entire Life Sciences value chain. Accenture’s Life Sciences group connects more than 10,000 skilled professionals in over 50 countries who are personally committed to helping our clients achieve their business objectives and deliver better health outcomes for people around the world.

Author Jeff Elton [email protected]

Contributors Arda Ural [email protected]

Visit Our Blog www.accenture.com/lifesciencesblog

About Accenture Accenture is a global management consulting, technology services and outsourcing company, with more than 358,000 people serving clients in more than 120 countries. Combining unparalleled experience, comprehensive capabilities across all industries and business functions, and extensive research on the world’s most successful companies, Accenture collaborates with clients to help them become high-performance businesses and governments. The company generated net revenues of US$31.0 billion for the fiscal year ended Aug. 31, 2015. Its home page is www.accenture.com.

About Accenture Strategy Accenture Strategy operates at the intersection of business and technology. We bring together our capabilities in business, technology, operations and function strategy to help our clients envision and execute industry-specific strategies that support enterprise wide transformation. Our focus on issues related to digital disruption, competitiveness, global operating models, talent and leadership help drive both efficiencies and growth. For more information, follow @AccentureStrat or visit www. accenture.com/strategy

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