Serialization, authentication, tracking and tracing drugs from the Pharma plant to the Patient Bedside

This is an executive summary of a recently published white paper (below) co-authored by Andy De et al.
Please click on the cover graphic below to view/download the PDF version, or alternatively, please click on the flip book at the end of this summary to access the eBook version of the white paper.

As medical science has advanced, so too have the number, type, and complexity of drugs and devices available. In order to carry this burgeoning product portfolio, the life sciences supply chain network has also enlarged and grown in complexity, and there are now more intermediaries than ever before between the manufacturer and the patient. It is a major challenge to account for the movement of all products within the supply network—and moreover to prevent diversions and counterfeits. However, in this networked, globalized world, where information travels fast, it is of critical importance to be able to secure the supply chain to ensure patient safety and maintain an unblemished reputation.

Counterfeits risk harming human life by containing incorrect active ingredients—or even no active ingredients at all. If allowed to flourish in the life sciences supply chain, these sub-standard products can damage the brand and reputation of the authentic manufacturer. Moreover, money from the sale of counterfeits will not go towards supporting the research and development (R&D) infrastructure of pharmaceutical and device manufacturers and may well be used to support illegal or harmful activities. The issue of diversions can be equally damaging as certain markets are denied their medications, while middlemen and traders enjoy profit by selling them on. It is impossible to do more than guesstimate the full impact of counterfeits and diversions (which run well into tens of billions of dollars a year), but they are undoubtedly a growing concern. As the Internet becomes ever more
prevalent, it is easier and easier to hide the provenance of pharmaceutical products on sale.

The world is waking up to these problems. Certain countries, including the US and many in Europe and Asia, are developing legislation to help protect the life sciences supply network. By enhancing the ability of stakeholders within the network to be able to track and trace the products, it becomes harder to divert or insert items, and easier to ensure high levels of quality and safety. As the life sciences industry operates on a global scale, these mandates need to fit within a wider framework, which is provided by global standards such as those from GS1 and Electronic Product Code Information Services (EPCIS). With guaranteed interoperability, it is possible to achieve accurate, reliable drug tracking and authentication at each node of the drug supply chain.

For life sciences manufacturers concerned with ensuring the highest levels of patient safety and brand protection, the solution will be to adopt an enterprise-wide approach to addressing these issues. This will include considering how to proactively comply with emerging serialization mandates across the world, while at the same time balancing the costs and benefits of serialization and authentication and determining which products and brands to prioritize.

This article explores some of these key challenges facing life sciences companies today from the insiders’ perspective. There is an overview of the problems of counterfeits and diversions and the role that serialization and authentication plays. It also addresses the critical role of industry standards and best practices in business process enablement using advanced IT solutions, and there is a case study of Cephalon’s success in addressing these challenges. In addition to addressing the tactical needs for compliance and supply chain visibility, the publication closes with an analysis of the strategic benefits of extending serialization to the patient bedside, including the potential benefits in terms of fewer medication errors and adverse events culminating in higher patient safety.



Please click on the flip book above to access the full edition of the eBook in a new window, or please click on the cover graphic above to view/download the PDF version of the white paper.

Wal-Mart’s Healthcare Retail and IT Play: Implications for Patients, Physicians, Providers and the rest of us...

Wal-Mart, the largest retailer in history, is betting big on Healthcare and why not!

Given the escalating costs of healthcare in a recession impacted economy with well over 47 million Americans bereft of any kind of insurance coverage, the notion of low cost retail clinics at your friendly neighborhood retail store, is an idea whose timing is night! After all, can you and should you pay for a “Mercedes Benz” like treatment at your physician’s clinic that will cost an arm and a leg for a common cold or strep throat, when a walk-in clinic at your nearest mega-retail store can offer “Toyota quality” treatment from a qualified and experienced nurse practitioner for perhaps as little as $30-60 per patient?

Wal-Mart’s Retail Healthcare Strategy

Wal-Mart currently has over 40 clinics operating in its stores and plans to partner with healthcare providers and healthcare entrepreneurs to open 600+ clinics in the next couple of years, with a potential for more than 2,000 clinics in its stores in the foreseeable future [Ref 1].

What is this significant for mainstream Americans? Given the ever escalating costs of healthcare, this is a move towards delivering right quality, right priced healthcare with price transparency accessible to millions who otherwise cannot afford treatment today, but have a reasonable expectation for “value for their healthcare dollars” similar to their spend in other areas.

The retail clinics are anticipated to be operated by third party physicians and nurse practitioners with practice management (patient registration, billing, e-prescribing) and electronic medical records (EMR) software provided by eClinical Works, a healthcare IT company located in Westborough, MA [Ref 2]. The promise in addition, to the quality of treatment delivered is the use of electronic health records (EHRs) to ensure transparency, accuracy and portability to assure a better customer experience. This would be well aligned with the Obama administration’s mandate and initiatives to drive electronic health record adoption across the country, to drive higher transparency, accuracy and quality at a lower total cost of treatment. Also implicit is the promise that medications if prescribed will be instantly transmitted to the in-store pharmacy for pickup before the patient leaves the store – “one stop shop” now acquires new meaning for many of us!

Driving Healthcare IT (HIT) adoption - Electronic Medical Records (EMRs) and Physician Practice Management

Wal-Mart’s move in healthcare does not stop at merely installing walk-in clinics at its retail stores. Given the Healthcare IT stimulus provided by the current administration that offers physicians over $ 40,000 per year in subsidies to install and embrace “meaningful usage of EHRs” to enable “evidence based medicine” i.e. treatment that can be meaningfully monitored, measured and analyzed to ensure superior patient outcomes, and also compared against peers to potentially enable “pay-for-performance” models currently unknown in healthcare, this presents a significant market opportunity for Wal-Mart. Given the miniscule 17% or so penetration of EHRs at small physician offices unlike large hospitals (according to a recent government sponsored survey in the New England Journal of Medicine), the incentives outlined above, as well as the penalties for lack of “meaningful adoption” of EHRs, it can be reasonably anticipated that the next 5 years will see significant adoption of these technologies to move us into the 21st century. After all, isn’t it a travesty that in today’s technology enabled era, our medical records continue to languish in paper format within manila folders in doctors offices?!


Figure. Andy De's Analysis of Wal-Mart's Retail Healthcare (Business-to-Consumer (B2C)) and Healthcare IT for Small Physicians Practices (Business-to-Business (B2B)) Strategy

Wal-Mart’s strategy (please see the service-market opportunity matrix above) for creating and penetrating this market is the stuff that business case studies from Harvard Business School articulate, to train their next cohort of consultants and managers (there is a current HBS case study on eClinical Works referred below)! Given that Wal-Mart’s Sam’s Club subsidiary has over 200,000 healthcare providers and physicians, it will offer the e-Clinical Works EMR and/or practice management software offering loaded ion Dell’s servers, for approximately around $ 25,000 for the first physicians’ practice and about $ 10,000 for each additional doctor within the same practice [Ref 1]. Following the installation and training, estimated annual maintenance and support costs are anticipated to be in the $ 4,000 -6,500 on an annual basis. Dell will provide the installation of the hardware with eClinical Works delivering the software installation, training and maintenance. As well, physicians can anticipate a hosted option - currently offered by eClinical Works, priced at around $400/month for EMR+ Practice Management or $ 250/month for EMR alone [Ref 3].

Can Wal-Mart’s Personal Health Record (PHR) be far behind?

Given this ambitious strategy to address the needs of both physicians and patients, Wal-Mart also has a significant opportunity to drive adoption of Personal Health Records (PHRs) with a competitive offering similar to those offered by Microsoft Health Vault and Google Health.

Wal-Mart is part of a consortium called Dossia – formed by a group of companies including AT&T, Pitney Bowes, Applied Materials, BP, Cardinal Health, Sanofi-Aventis. Dossia’s goal is providing employees, their dependents, retirees and others in their communities with an independent, lifelong health record, one that is personally-controlled, private, portable and secure [Ref 4].

Dossia's Founders are funding Dossia and its platform called Indivo, an independent secure, non-profit infrastructure for gathering and securely storing information for lifelong health records. At the request of employees and other eligible individuals, Dossia gathers health data from multiple sources. Employee participation as a Dossia user is completely voluntary and individuals have complete control over who sees their information.

Dossia’s PHR platform called Indivo, provides a secure data infrastructure that aggregates and stores health information for individuals to create a lifelong personal health record with medical information from multiple sources. Once gathered and securely stored in a decentralized database, the health information is continually updated and is available to individuals for life even if they change employers, insurers, or doctors.

Although access to Dossia’s PHR platform and database has been initially limited to the employees of founding companies including Wal-Mart, it is perhaps not inconceivable that this could be scaled to meet the needs of consumers of these companies as well in the foreseeable future. It is also not inconceivable that Wal-Mart could potentially offer this free to patients (consumers) of its in-store Health clinics as a loyalty building mechanism (similar to frequent flyer advantages offered by airlines) to build “stickiness” for both the clinics and its pharmacies. For instance, having your personal health records as well as all of your current medications on a secure server that only you can access anywhere, anytime, to retrieve your medication information for the pharmacy, or provide your physician in the event of an accident while on vacation, is compelling especially for the elderly or the technologically challenged, and could offer “barriers to switching” for Wal-Mart, going forward.

As well, bundling Dossia’s PHR platform and services along with the eClinical Works physician practice management and EMR offering (after rending eClinical Works interoperable with Dossia) would also make this even more compelling for physicians who can now not only digitize their medical records, but also potentially offer interested patients a digital and secure copy of their personal health records (PHRs) gratis, or as a fee based service. While this is perhaps easier said and done, given the lack of universally accepted Healthcare Interoperability standards, this could be a significant step in the right direction, especially given the incentives for adoption provided by the ARRA (American Recovery and Reinvestment Act of 2009) stimulus from the Obama administration, referred to above. While this is currently strategic prognosis on the part of this author at this time, monitoring Wal-Mart’s moves in PHRs will be interesting indeed, going forward.

Hey Doc, Wal-Mart is your IT Provider and you better believe it!

While the notion of purchasing your IT software, hardware and services from your retailer may pose questions for many physicians, Wal-Mart has adroitly mitigated this risk thru its partnerships with a well known brand like Dell and a well known small practice software offering from eClinical Works (currently used by over 25,000 physicians) [Ref 1,2]. Proof of this concept will be provided to prospective physicians thru the usage of this software and hardware within the retail clinics currently in place within the Wal-Mart retail stores.

Given the high cost of sales and marketing involved with selling healthcare IT to small physicians offices, the adoption, scalability and success of Wal-Mart’s “aggregator model” could potentially be a game changer in Healthcare IT. At the same time, the provision of quality, transparent healthcare at a low cost within its walk-in clinics, if successfully embraced, may well be the panacea for millions of Americans without insurance – the next 3-5 of years will be interesting indeed, as we monitor and perceive the progress of Wal-Mart’s Healthcare strategy and execution.

REFERENCES:

1. Wal-Mart plans to market Digital Health Records System, Steve Lohr, The New York Times, March 11, 2009.
2. eClincal Works: The Paths to Growth, Harvard Business School case study # 9-807-025 by Robert F. Higgins and Mark Rennella, February, 2007, Harvard Business School Publishing, Boston, MA.
3. www.eclinicalworks.com, eClinical Works company website.
4. www.dossia.org, Official Dossia web-site

Personalized Medicine - Myth, Pipe Dream or Realizable Promise?

Personalized medicine in recent times, has attracted significant hype as well as pessimism from a number of quarters including the Pharma industry that has often perceived this as “avant garde” and a grandiose vision that is way out there and not yet ready for useful value delivery to real-world patients and consumers.

So it was with a mixture of curiosity laced with healthy doses of pessimism that I attended the Personalized Medicine: A Call to Action Conference, November 29th and 30th, 2007, at the Harvard Medical School. The Conference was orchestrated by Dr. Raju Kucherlapati, Scientific Director of the Harvard-Partners Center of Genetics and Genomics and Paul C. Cabot Professor of Genetics at the Harvard Medical School, a pioneer and thought leader in the Personalized Medicine arena, in close collaboration with the Personalized Medicine Coalition (PMC) led by Dr. Edward Abrahams.

I must say I was pleasantly surprised by the august assemblage of stake holders from academia, large and incipient producers (pharma, bio-tech, diagnostics, medical devices), healthcare providers (physicians and hospitals), payers, as well as regulators. Michael Leavitt, secretary of Health and Human Services (HHS) delivered the opening, inspiring keynote address clearly signaling that Personalized Medicine (P/M) is a significant agenda issue and one whose time has come(1).

Equally encouraging was the keynote presentation by Kathleen Behrens, member of the President’s Council of Advisors on Science and Technology (PCAST) highlighting the progress made by this body on studying the relevant facets of Personalized Medicine, to craft their recommendations for the president in their report that is due in 2008. Their comprehensive recommendations will highlight pragmatic yet far reaching policy changes that will need to be implemented to overhaul the ailing US Healthcare system and bring P/M to fruition.

What is Personalized Medicine? Why is this significant for Patients and Healthcare?

“Personalized Medicine means knowing what works, knowing why it works, knowing who it works for and applying the knowledge for patients”, is perhaps the most succinct articulation of P/M from the honorable Mr. Michael Leavitt, secretary of Health and Human Services (HHS). This implies delivering treatment to patients that is proactive, predictive, personalized and participatory unlike the status quo today.

By way of the “trial and error” medicine (also sometimes referred to as “intuitive medicine”) practiced across the world today, the doctor makes a “most likely” diagnosis consistent with symptoms and them prescribes what he/she considers appropriate treatment comprising drugs, devices or surgery. If the treatment does not work and presents significant side effects or adverse events, the doctor most likely would alter dosage or prescribe an alternative medicine. This iterative cycle is repeated, until the diagnosis and treatment that actually presents the desired clinical outcome in the patient is reached. The paradigm has reached a point of diminishing returns as evidenced by the fact that most drugs prescribed in the U.S. today are effective in fewer than 60% of treated patients(2)!

Personalized Medicine, au contraire, uses far more sophisticated and refined diagnostic testing to arrive at the precise diagnosis aligned with the person’s genetic makeup at the molucular level, and hence is also often referred to as “evidence-based medicine” or “precise medicine”. P/M would first map a person’s genomic profile and then ensure mapping of this profile to the treatment to maximize efficacy and the best therapeutic outcome (often with life and death implications), while minimizing adverse events (please see the framework below). The closest real-world analogy to P/M is the recruitment process that matches a person’s job to his/her education, experience and skill sets as laid out in his/her profile (resume) to ensure the best fit for the job, or the “nirvana notion” of targeted marketing to “markets of one”. P/M is in essence, delivering “mass customization” to people in a healthcare context at an affordable cost.



Let’s consider what is perhaps the best known example of how P/M can actually save lives in the real world. Herceptin, a monoclonal antibody delivered by Genentech (often recognized as the pioneer of the bio-tech industry), has been found to be particularly efficacious as a first line treatment with chemotherapy, in treating aggressive forms of breast cancer in women whose tumors have an overabundance of HER 2, a protein that promotes cell growth. Herceptin has been found to reduce the likelihood of cancer spreading to other parts of the body in these patients by a remarkable 53% compared with traditional chemo therapy alone, according to a 2005 study. This is also compelling from a cost-benefit perspective. The tests to detect whether a breast cancer patient has an overabundance of HER 2 protein (and thereby a candidate for Herceptin) costs a mere $ 400 and potentially saves thousands of dollars by preventing the cancer in HER2 patients from spreading to other parts of the body and by not treating HER 2 negative patients with a drug that won’t help them (2).

A very similar business case (4) also presents itself for patients with high cholesterol who are prescribed high statins for treatment – these tend to be ineffective or not completely ineffective in a significant number of these patients!

What are the Key Barriers to realizing Personalized Medicine (P/M)?

The conference (1) identified six challenges that need to be collaboratively addressed to bring P/M mainstream:

• Reimbursement – Who will pay for the incremental cost of delivering P/M? This is perhaps the most significant barrier given the already high cost of delivering healthcare today,that is growing at 10-13% annually and consumes almost a fifth of the US GDP today. According to Michael Leavitt, payment systems today are “fundamentally flawed and reward providers and physicians for volumes and not value delivered”. As well, health Insurance needs to be dramatically improved to assure affordable health insurance for every American. Besides, why should payers pay for P/M without clear, compelling and unequivocal demonstration and evidence of superior therapeutic outcomes in patients that can be delivered cost effectively?
• Business Models – What are the new business models that companies need to enable to render P/M a reality? The Pharma industry is largely driven by the Blockbuster model (please see my earlier blogpost “Branded Pharma – Who moved my Blockbuster Cheese?!”) that is being severely constrained today, with a huge fall in innovation productivity for most Pharma companies – a mere 22 NMEs (new molecular entities) have been approved by the FDA in 2007 against 80+ NMEs in 2000. Given this constrained innovation pipeline, what will viable business models that will ensure delivery of “targeted therapeutics” to very small patient populations for superior outcomes, while assuring profitability for Pharma/Devices/Diagnostics companies look like?
• Connectivity and lack of Business Process Integration – Given the archaic paper based processes, what is the IT infrastructure needed to integrate the Healthcare Value Chain into a coherent system that will enable P/M? Speaker after speaker at the conference pointed out the travesty of calling Healthcare a “system” given the lack of basic connectivity within the Hospitals and across the Healthcare value chain that presents really daunting challenges. These include facilitating collaboration among researchers, clinicians and the Healthcare Value Chain at large, accessing, processing and integrating clinical, genetic and genomic data from multiple, often heterogenous and disconnected sources, and having the robust IT platforms (software and hardware) built on common industry standards to do so.
• Regulations – How soon can a new innovation be delivered while assuring safety, quality and efficacy? Current regulations and the three tier approval process significantly drive up the cost of delivering drugs to market ($ 800 MM - $ 2 Bn per molecule) with times-to-market of 7-10 years which does not lend itself to driving the agility that is imperative for P/M to become main stream. A radical redesign of the drug approval process is imperative for P/M to come to fruition.
• Trust, Transparency and Confidence – What will it take for patients to see the clear and compelling value of P/M to enable large scale adoption? Patients today are extremely skeptical of the Healthcare and Life Sciences industries’ capabilities of delivering treatment at an affordable cost. Given the need to compile genomic profiles for each patient (priced at around $ 350,000 per profile today) at a reasonable cost while ensuring privacy, security and (laws to guarantee) non-discrimination further exacerbates these concerns.
• Physician Behavior – How can the current mindset and practices of physicians rooted in “Trial and Error” medicine be changed across North-America and the Globe? Educating the thousands of physicians in North-America and across the globe (trained in the current paradigm) presents a daunting challenge with enormous cost and change management implications.

How can these Challenges to Personalized Medicine (P/M) be overcome in the foreseeable future?

While the conference attempted to address each of the six issues identified above, potential solutions in three areas (reimbursement, business models, IT infrastructure) were deemed the most important, tactically addressable and are summarized below:

1. Reimbursement - Who will pay for Personalized Medicine (P/M)? The Payer Perspective

A number of large insurance companies as well as government officials articulated the need to support and enable P/M for the foreseeable future, which was extremely encouraging.

Cost containment (“potential savings from higher efficiencies”) is a high priority hot button issue for Congress (given that the government is the largest payer), especially in the light of the highest cost of healthcare in the world in the US. This is becoming a critical, “Big Picture” issue for the budget, finance and health committees in Congress, especially since rising Healthcare costs is compromising spend in other critical areas.

Comparing effectiveness of various treatment programs, services and products (including “Value-based Insurance Design”) is already being contemplated in Congress, as a first step to enabling metrics driven quality and performance improvements in Healthcare. Also significant is the awareness on enabling “holistic longitudinal accounting” i.e. increase spend upstream on accurate diagnosis to drive down costs downstream (treatment).

For insurance companies, having clear and compelling clinical evidence of superior therapeutic outcomes from P/M with accompanying data on driving down the “total costs of treatment” is imperative to demonstrate the value of P/M and drive a business case for funding, going forward. They still have a long way to go and are looking at harbingers of P/M like the Harvard Medical School - Partners Healthcare initiative on P/M to unequivocally demonstrate this value i.e. superior therapeutic outcomes at a lower total cost while minimizing possible adverse events.

Given the fatal flaw in the current system that pays for volume rather than value, the ability to measure (transparency) quality of delivered healthcare, comparable pricing for similar buckets of care and properly aligned incentives across multiple stakeholders, to deliver higher quality at lower costs are significant issues that need to be addressed for this to happen according to Michael Leavitt, the secretary of HHS. Policy amendments to effect these fundamental changes to healthcare reimbursement is currently being contemplated.

It was also startling to hear that 5% of all American patients (usually indigent and multi-morbid patients who use the emergency rooms as their mode of treatment in the absence of health insurance coverage) consume 95% of all healthcare costs! While bringing the 50 MM Americans currently without any health insurance into the healthcare system was a high priority for the government, it was also suggested that the most fungible way to design benefits enabling patients to choose the level of payments by “owning their own healthcare” and eliminating unnecessary and excessive spending while empowering them to make the best choices for themselves.

2. Who will deliver Personalized Medicine (P/M) and what will that business model look like? How do Regulations need to change to make this happen? The Producer (Branded Pharma, Bio-Tech, Diagnostics) Perspective

Advances in science and technology presents real potential in rendering P/M ubiquitous in the foreseeable future. The sequencing of the human genome has helped scientists link an ever increasing number of diseases to specific genes. As well, scientists have been making great strides in mapping the molecular pathways by which a change or mutation in a gene actually manifests itself in a disease. These innovations have enabled Pharma and Diagnostic/Bio-Tech companies to develop effective diagnostic tools like biomarkers that can distinguish the subtypes of what had been considered a single disease, as well as chemical agents that target each of these subtypes. This culminates in the ability to manage many fatal cancers as chronic conditions by attacking them early, resulting in more lives saved (2).

Critical to delivering P/M is a significant departure from the current Blockbuster Drug model by Pharma and life sciences companies. The economics of delivering a large number of molecules targeted at smaller patient populations will demand a radical transformation from the current model predicated on the discovery, development and commercialization of a very small number of molecules targeted at large patient segments. Given the dramatically declining productivity of current product pipelines (see figure below) in the large Pharma majors as well the potential loss of $ 160 Bn in revenues from expiry of current patents by 2015 (I have highlighted earlier in my blog posts “The 3 Questions that keep Big Pharma CEOs awake at night” and “Branded Pharma – Who moved my Blockbuster Cheese?!”) and the demand by patients and providers for better clinical outcomes at a more affordable cost, Pharma companies may have little choice save embracing the radical transformation demanded.

The biggest challenge, according to the Pharma companies, is the science of drug discovery – how to identify and validate a genetic association with a disorder and then develop a molecule to address this. Pharmacogenomics and related technologies have driven significant advances in this arena, but there is still a long way to go.

Presentations from Eli Lilly, Astra-Zeneca, Siemens Medical Systems (SMS) and Celera Genomics encouraging in that these companies are proactively moving forward to enable P/M and believe they can sustain and reinforce their competitive advantage by doing so.

• Tom Miller, Group VP of Siemens Medical Systems (SMS) emphatically declared that SMS was “betting the farm on P/M” and has invested over 10 Bn Euros in acquiring companies and capabilities for “accurately characterizing diseases” in advance. He also cited the lack of an educated patient population that is prepared to “buy the vision” as well as the absence of “holistic longitudinal accounting” (invest more upstream in accurately characterizing disease to save treatment costs downstream) as perhaps the single largest barrier to success. As well, given the promise and advances in molecular diagnostics, and newer technologies like Pharmacogenomics, Toxicogenomics, Biomarkers, Imaging and Bioinformatics, the time is ripe for pharma and diagnostic companies to collaborate and move P/M forward.
• Given that almost 50% of all patients fail to respond to a certain therapy or treatment, segmentation of patient populations in clinical trials with development of appropriate diagnostic tools (“biomarkers”) to identify the most suitable target population as well as those at risk of significant adverse events. “Tailored Therapeutics” leveraging Pharmacogenomics and Biomarkers, is Eli Lilly’s answer to P/M to deliver drugs targeted for specific patient populations, with optimum dosage, at the appropriate time for intervention, with information tools to accommodate patient diversity as well as as questions specific to buyers, payers, physicians and providers. Pharma companies like Pfizer and Lilly are increasingly seeking approval for companion diagnostics (e.g. biomarkers usually based on DNA testing) to filter out patients that are likely to have adverse reactions to new drugs – a need currently fulfilled by bio-tech companies that provide DNA testing and analysis on the data as services. Adequately validated biomarkers (including their use in clinical trials) are a prerequisite for P/M to be realized viably, along with reimbursements to incent innovation and acceleration.
• Eli Lilly also presented compelling quantitative data demonstrating a business case for developing targeted therapeutics. The Return-on-Investment (ROI) from the lower total cost of treatment resulting from the superior efficacy and clinical outcomes in a smaller targeted segment, appropriately pre-qualified using companion diagnostics (enabling higher revenues from higher consumption and faster uptake), as well as the significantly reduced cost of adverse events and liabilities was higher than that of targeting large patient populations, with 50 - 60% efficacy of treatment, with the additional liability imposed by adverse events.
• From a regulations perspective, these Pharma and Bio-Tech producers expressed the imperative for granting additional periods of exclusivity for innovations targeted at smaller targeted populations, similar to the 7 year exclusivity for Orphan Drugs and pediatric drugs. Without these additional periods of exclusivity, the current economics of drug development simply does not lend itself to rendering targeted therapeutics viable - they would go out of business. As well, the imperative for shorter development cycles and costs demanding a fundamental re-thinking of FDA regulations is warranted.

3. How will Personalized Medicine be enabled from a Technology/ IT perspective?

It is astounding that in the 21st century, archaic, paper based medical records, the resulting inaccuracies and inability to access this information in life and death situations results in over 80,000 deaths annually in the US alone.

According to Michael Leavitt, connectedness and uniformity of standards in US healthcare sector does not exist today, hence does not quality this as a “system”. Lack of standards and best practices in gathering and storing genetic/genomic information into Electronic Health Records (EHRs) are not in place and are a prerequisite for wide spread adoption.

The adoption rates of (18-23%) for EHRs by physicians and an even far smaller (2- 4%) rate of Personal Health Records (PHR) adoption is a huge challenge as well as an impediment to P/M that needs to be addressed with urgency (please see my previous blogpost and analysis on EHR adoption, “Demand-Side EHRs: Who will make it Win-Win for patients to adopt?”)

Here are some of the IT solutions that were proposed, to enable the level of intra and inter enterprise connectivity across the Healthcare Value Chain, demanded by P/M:

• Pharma and bio-tech companies are "swimming in data" (per Dr. Nadine Cohen from Johnson and Johnson) – what is missing today are effective tools to analyze the data and deliver meaningful analysis that will help them commercialize drugs faster. Use of drug disease modeling and scenario simulation is an idea whose time has come, to drive decision making re: new as well as mature drugs. As well, lack of collaboration across functions and trading partners and little to no visibility into downstream demand and patient insights is costing the Life Sciences industry especially Big Pharma, billions of dollars in value leakage by way of excess inventory, stock outs with life and death implications. Also exacerbating this is little to late visibility into adverse events and complaints resulting in huge penalties that can be significantly alleviated with tools for analysis of post-marketing data to understand and proactively impact patients who show adverse reactions to new drugs.
• Empowering customers with the information and decision support they need, to result in the best possible outcomes at the lowest cost, is the key. Using Microsoft Health Vault and similar personal health record (PHR) platforms are possibly the first step to enabling Personal Health Networks (PHNs) of patients with similar therapeutic issues - the wave of the future. This is fraught with significant challenges I have highlighted in my previous blogpost, “My PHR in Microsoft’s Health Vault: Confessions of an Early Adopter”. Evolution of the PHR from a passive data base of records to a decision support tool that will proactively help patients make the right clinical choices, lower information search costs and enable better collaboration with their physicians and care givers is a compelling vision for the future that I have persevered to elucidate in my previous blogpost, “Demand-Side EHRs: Who will make it Win-Win for Patients to adopt?”
• The use of a robust computational platform as well as sophisticated predictive analytics similar to what other industries have already accomplished, is now long overdue in Healthcare to drive P/M. Bio-cities in Asia and the Middle East are developing comprising research, clinical and healthcare delivery within the context of one village or community that can deliver targeted treatment to patients.
• Enabling standards based interoperability, integration and exchange of data from EHRs (supply-side) and PHRs (demand-side), rules based decision support, as well as presenting them in a role-based context (what the physician demands vs. the patient needs) is a daunting challenge today. For instance, wouldn’t it be incredible if we could aggregate clinical and genomic data in the EHR, analyze this retroactively, to run in-silico clinical trials that will show physicians potential adverse events that may happen?
• Partners Healthcare in collaboration with Harvard Medical School has developed one of the first laboratories for P/M in this country within the healthcare system, harnessing genetics and genomics based data in the EHRs to drive decision support for real world patients. Some of the technical accomplishments at this initiative (3) are:
• o Structuring and digitizing genetic and genomic information and incorporation within EHRs
  o Creating applications to support genetic discovery and research
  o Identifying computational, storage and software requirements and building the right IT infrastructure supports the P/M vision at Partners Healthcare to:
  * Improve the quality and efficiency of research and clinical operations to positively impact and lower costs of delivering quality healthcare
  * Integrate genetic test results into EMRs and EHRs
  * Ensure the data integrity of the P/M business processes and workflows

This is a significant milestone and a harbinger to realizing P/M. The Harvard Medical School -Partners Healthcare Center for Genetics and Genomics is also driving significant thought leadership by documenting and providing the IT requirements, architecture and applications for enabling P/M, to the department of Health and Human Services (HHS). This is a significant accomplishment that can potentially help establish the standards and best practices needed to proliferate P/M across the US using a networked model.

Can Personalized Medicine (P/M) potentially disrupt the current US Healthcare Model?

Perhaps the most provocative perspective on P/M was presented by Dr. Clayton Christensen, Robert and Jane Cizik Professor of Business Administration at the Harvard Business School (HBS) and author of the seminal and immensely successful works on business strategy- The Innovators Dilemma, The Innovator’s Solution and the just released Seeing What’s Next.

According to Dr. Christensen, the ability of innovators to provide new products almost always outstrips the ability of most customers to adopt and utilize these innovations. Some of these are incremental while others are “disruptive” and have significant cannibalization impact on the incumbent technologies, with entrants nearly always winning! Disruption is facilitated when historically valuable and expensive expertise becomes commoditized thru scientific and technological advancements. Disruptive technologies deliver simpler, affordable, easer-to-use solutions at a lower cost of adoption for the customer. Combining disruptive technology with an appropriate business model is the recipe for assuring success

Applying his model of disruptive innovation to P/M in a healthcare context, Dr. Christensen prognosized the following:

• Molecular diagnostics and Interventional Radiology may be the “disruptive technological enablers” (“Precision Medicine” vs. “Intuitive Medicine”) of Healthcare that can potentially deliver simpler, most cost effective solutions with higher efficacy and safety for complicated diseases for patients.
• Therapeutics is where the money is made today but Diagnostics (coupled with Therapeutics) is potentially where money will be made in the Healthcare Value Chain, going forward. The analogy he provided was the shift in power in the PC industry from IBM to Microsoft and INTEL.

He however conceded that disruptive change in a Healthcare context is far more difficult given the power of the Payers and Regulators (unlike any other industry) to inhibit and constrain innovation. However, his presentation delivered some fascinating insights for the audience to ponder upon.

Key Takeaways from the Personalized Medicine Conference

The Personalized Medicine: A Call to Action Conference was a seminal event that presented a realistic perspective and overview on the promise, the challenges, as well as the pioneering work being done to usher in the era of P/M, thanks to the thought leadership of Dr. Raju Kucherlapati, Scientific Director of the Harvard-Partners Center of Genetics and Genomics and Paul C. Cabot Professor of Genetics at the Harvard Medical School and his team and the Personalized Medicine Coalition (PMC).

Here is a concise summary of the key takeaways from this conference discussed in detail above:

• "The Future of Personalized Medicine (P/M) is now" and needs to be collaboratively driven by all stakeholders: academia, government, payers, producers, providers and physicians to bring P/M to fruition and deliver value to patients.
• Personalized Medicine is a significant line item in the current US government’s Healthcare agenda with a report and pragmatic recommendations for rendering P/M a reality to be presented to the President by his Council of Advisors on Science and Technology (PCAST).
• Current payment systems are fundamentally flawed – payments for volumes and not value. Insurance needs to be dramatically improved to assure affordable health insurance for every American. Holistic longitudinal accounting is a paradigm shift that is needed to enable appropriate reimbursement for P/M.
• Fundamental rethinking of the regulatory regime to assure safety and efficacy is needed to drive the agility needed. As well, additional periods of exclusivity may be imperative for targeted therapeutics to be rendered viable.
• Science and technology are both constraints for Pharma, Bio-Tech and Diagnostic companies to truly enable P/M as are the current economics of drug discovery and development. However, P/M is the way forward given the 50% efficacy of most treatments and therapies as well as the high incidence and cost of adverse events.
• Connectedness and uniformity of standards in US healthcare sector does not exist today, hence does not quality this as a “system”. As well, this imposes huge inefficiencies and costs that are not sustainable, going forward. Transition to an electronic medical record (EMR)/electronic health record (EHR) system is imperative and will be driven by regulations.
• Lack of standards and best practices in gathering and storing genetic information into Electronic Health Records (EHRs) is a serious impediment, as is the abysmally low adoption of both EHRs and Personal Health Records (PHRs) by hospitals and patients respectively. The EHR is the cornerstone for connectivity to drive a 360 degree view of the patient as a first step to delivering value based treatment and superior therapeutic outcomes at the lowest cost.
• Trust, transparency, confidence, protection of the patient’s privacy and non-discrimination laws need to be in place for Personalized Medicine to become a reality. Consumer activism will happen once patients see value delivered from Personalized Medicine.
• Partners Healthcare in collaboration with Harvard University has developed one of the first laboratories for P/M in this country, within its healthcare system, harnessing genetics and genomics based data in the EHRs to drive decision support for real world patients. The ability of this initiative to clearly demonstrate benefits in the form of superior therapeutic outcomes and minimal adverse events at a lower total cost of treatment will be key to drive a business case for large scale adoption of P/M.
• P/M with its associated advancements and technologies can potentially disrupt the current Healthcare model in the US and lead to new classes of service providers delivery quality healthcare to the masses at lower costs.

Personalized Medicine (P/M) despite daunting challenges, presents enormous promise in terms of not only enhancing the quality of healthcare for patients i.e. each and every one of us, but also lowering the total-cost-of-healthcare.

Pioneering efforts like the Harvard Medical Partners Healthcare P/M initiative currently underway, the current portfolio of products already developed or under development, as well as the clear yet pragmatic commitments to P/M from all stakeholders involved i.e. academia, the government, the payers, the producers, the providers and the physicians was truly encouraging and inspires me to believe that P/M is no longer a myth, nor a pipedream and while not imminent reality, definitely a realizable promise that will positively and significantly impact the quality of our lives, in the foreseeable future.

As always, your comments and feedback are welcome.

REFERENCES:
1. Presentations and panel discussions at the Personalized Medicine: A Call to Action Conference, Harvard Medical School, November 29th and 30th, 2007
2. Realizing the Promise of Personalized Medicine, Mara G. Aspinall and Richard G. Hammermesh, Harvard Business Review (HBR), pp 109-117, October 2007
3. Collaborating to Create Personalized Medicine, Business Case Study on the Harvard Medical School-Partners Healthcare Center of Genetics and Genomics (HPCGG), Hewlett Packard Company, 2007

4. The Case for Personalized Medicine, Personalized Medicine Coalition (PMC), November 2006.

My Personal Health Record (PHR) in Microsoft’s Health Vault - Confessions of an “Early Adopter”

It is a well known and incredibly shocking fact that inability to access vital, accurate and current health information especially in an emergency (usually an unforeseen event like a cardiac attack, stroke, seizure etc.) on time, leads to the loss of well over 80,000 lives in the United States alone! I actually experienced this pain while helping my 72 year old father with his triple bypass surgery in India, in May of this year.

My father had a minor cardiac event while visiting us in the US a few years ago and was treated in a local Dallas hospital of repute and then discharged without any major intervention. He unfortunately forgot to secure copies of his health records before leaving this country. Having had a minor heart attack and being diagnosed with three clogged arteries that demanded a tripe bypass surgery, I needed to secure these records from his previous event for the cardiac surgeons in India.

Calling up the hospital in Dallas, sending them a written request from the doctor, having them dig up the relevant files and handing those off to my wife who then faxed them across to me in India, took all of 72 hours – and resulted in my father’s surgery being delayed by that length of time! Given his extremely precarious condition, this could have been potentially life threatening and could have been alleviated if I could have secured access to his health records on demand. Fortunately for us, my father’s surgery was very successful followed by a speedy recovery but the potentially devastating impact of not having right time access to his vital health information was an eye opening experience for me. I promised myself that this would never happen again as far as my health records and those of my family were concerned.

So given the release of Microsoft’s Health Vault Personal Health Platform this year and my firm resolution to ensure right time access to our health records on demand, I enrolled myself and secured my personal Health Vault account.

In my previous blog post (please see “The Demand-Side Electronic Health Record (EHR): Who will make this “Win-Win” for Patients to adopt?”), I have articulated the potential barriers to adoption and also painted a comprehensive forward looking vision on the evolution of the Demand-Side Electronic Health Record or Personal Health Record (PHR) over time. This blog post articulates my personal experience with creating my Personal Health Record (PHR) using Microsoft’s Health Vault Platform, including the challenges, for other early adopters like myself, as well as feedback for the product management team at Microsoft.

Creating my Personal Health Record (PHR) with Microsoft’s Health Vault Platform – The Process, Experience and Challenges

Once you have signed up to the Microsoft Health Vault using your e-mail and have created your profile, the key is to create your data repository with your current and accurate health records, that you will need to painstakingly collect from your doctor’s offices. Physically making the rounds of these offices and picking up a freshly printed copy of each of my reports/records in my case, was the best option since most doctors to this day, do not e-mail responses or records, and the constraint that fax copies often tend to distort data and information.

• The first step I put myself thru was to scan each record, chart or report at home and then turn these into Microsoft Word documents and PDFs for upload into the Health Vault. This, in itself, is a huge barrier to adoption for most people that are not early adopters or tech savvy like me. Microsoft has endeavored to alleviate this pain by partnering with MaxEmail that will provide you with a virtual fax number for $ 8.95/year that will automatically upload faxed copies of your records from the doctor’s office onto your Health Vault PHR. I personally did not try this service and cannot comment on its efficacy, but this again, involves a change in behaviors and hence, is a barrier to adoption for most consumers. Having a portable scanner (like a number of the low priced card scanning devices available today) that potentially, can “plug-and-play” with the option of converting the scanned documents into a format like PDF and then uploading these directly onto the Health Vault, would be eminently desirable and lower the barrier to adoption for large segments of users. As well, this is currently a static data repository and needs to enable users like myself to stratify and store records by context and content type. For instance, being able to discern my annual physical exam data from my cardiac test data or my blood examination reports would be desirable vs. seeing a listing of documents with tags I have created. Over time, this needs to become more dynamic and hopefully evolve into what I have termed a Health Historian capable of data feeds from medical devices like implantable defibrillators and pacemakers. For now, the ability to access this life saving data from any place with internet access is very gratifying indeed.

• I then proceeded to http://www.healthvault.com/ to sign into my previously created account. I would have appreciated the “sign in” or “create an account” buttons on this very screen on the left hand navigation bar to preclude having to go thru two additional screens to get to my PHR.

• I was fairly impressed by the security/permissibility of the Microsoft Platform that lives up to the Health Vault brand, and in my case secured reciprocal sharing for my wife and myself.

• Going to the health details tab enables you to create a rudimentary profile comprising name, address, gender, birthday, ethnicity etc. as well as the ability to upload a low resolution photo of yourself. Having access to more capabilities like inclusion of family history, a choice of key therapeutic areas that are relevant e.g. cardiac vs. neurological etc. would have been desirable.

• Uploading your health records in word, excel, PowerPoint or PDF (in my case I had converted all of my documents into PDF) was fairly intuitive, as is the ability to view the audit trail for each of these documents on demand on the “history” tab. Clicking on each document throws up a dialog box that enables you to download, print or delete, with the added ability to click on three tabs to view the properties, history and the people you are sharing the document with.

• Once you have uploaded all of your health records, you have the option of securing additional free as well as fee based applications and services from a number of vendors that Microsoft has partnered with including the American Heart Association, Cap Med, Healthy Circles and others. I signed up for the ones offered by the American Health Association and Healthy Circles to be able to enter data on my weight, blood pressure and exercise regimen to be able to see charts and how well my vital signs compare with my peers. The challenge I experienced was that I had to sign in each time I needed to access apps. from a different vendor to be able to enter data or see a chart showing trends, which is painful and again, a barrier to adoption. This is an obvious area of improvement. In an ideal world, Health Vault should provide me with an excel like tool where I can manually enter data or upload data directly from my blood pressure monitor or glucose monitor using the Health Vault Connection Center utility and drivers from leading blood pressure, heart rate and glucose monitoring devices offered by Omron, Polar and Johnson and Johnson’s Life Scan division - you will need to download the utility and the drivers to your computer. Having the choice of which vital signs are relevant for me (weight, blood pressure, glucose levels, cholesterol types etc.) and entering this data to be able to see a chart showing trends in my vital signs over time, would be intuitive and extremely valuable from my perspective. As an example, I entered weight, blood pressure, sugar and cholesterol for a fictitious patient I have called John Doe into Excel and then created a graph to show trends over time. A close look at this data immediately reveals the effectiveness of this patient’s health regimen including diet, exercise, medication, weight loss and their impact on the vital signs over time. Having something similar online greeting me everything I go to my Health Vault PHR would serve as a fairly simple yet high impact Health Dashboard (that I have referred to in my forward looking vision on the evolution of the EHR in my previous blog post “The Demand-Side Electronic Health Record (EHR): Who will make this “Win-Win” for Patients to adopt?”). Over time, mapping this to benchmark data from sources like the American Heart Association for instance (with permission based access), could potentially alert the patient if one or more of their vital signs violates a benchmark threshold and prompt him/her to see the appropriate doctor for treatment. These data entry and online analytics capabilities are very well developed today and Microsoft would be well advised to offer these within the Health Vault Platform, perhaps for a fee that “enlightened prosumers” like myself would be happy to pay, for the incremental value these would deliver. These would be the first steps towards delivering a Healthcare Expert System that I have envisioned in my previous blog post.

• One of the most impressive capabilities of the Health Vault is the integrated Health Search capability. Searching for a term like “coronary artery disease” returns a well stratified stack of information for education and learning, research, useful tools and references neatly delivered within a navigation bar, web links as well as ads for suggested books from vendors like Amazon and other ad sponsors. This also offers the capability of including useful links and resources into a “scrapbook” that can be added to your Health Vault PHR for future reference.

My first experience with creating my Personal Health Record (PHR) using Microsoft’s Health Vault Platform was a fairly positive experience. It is user-friendly, reasonably easy to use, intuitive most of the time and perhaps most of all, backed by the Microsoft brand’s promise of security, quality and reliability. As well, having integrated search capabilities to lower search costs, as well as the capability to upload data from blood pressure or glucose monitoring devices via the Health Vault Connection Center, are significant additional benefits. Having a portable version of the PHR especially for travel to other parts of the world where the Internet is anything but ubiquitous would be eminently desirable. Being the early adopter that I am, I have actually created my portable PHR (that I can carry in my wallet without damaging it) with an exact replication of the data I have uploaded into the Microsoft Health Vault, using the really tiny yet robust USB memory device that Sony appropriately brands as the Micro Vault. The Health Vault and the Micro Vault both as PHRs – now is that a coincidence or what?!

So for now, the “enlightened prosumer” in me stands safe and secure in the knowledge that all of my vital and current health information can be easily accessed in the event of an emergency, or on demand, online via my Microsoft Health Vault PHR or thru my portable/mobile PHR on the Sony Micro Vault in my wallet. This is very reassuring and a comforting feeling indeed with the hope that I will not need to use this information under distress, in the foreseeable future!:-)

The “Demand-Side” Electronic Health Record (EHR): Who will make this "Win-Win" for Patients to adopt?

In my previous blogpost ("Can Life Sciences and Healthcare enable my evolution from “Passive Patient” to “Enlightened Prosumer”?), I have articulated my vision for the Electronic Health Record (EHR) and the incumbent benefits that would potentially enhance both quality and span of life, predicated on a paradigm shift – proactive, intervention based healthcare that would be far more cost-effective to deliver and yet assure timely and superior therapeutic outcomes.

In this context Microsoft’s announcement of its EHR Platform, the Health Vault, for Personal Health Records (PHR) under Peter Neupert’s leadership, and the support of Microsoft’s leader Steve Ballmer and its visionary founder and philanthropist par-excellence, is indeed encouraging. Particularly compelling is the support from partner organizations like the American Heart Association, Johnson & Johnson LifeScan, New York-Presbyterian Hospital, the Mayo Clinic and MedStar Health, a network of seven hospitals in the Baltimore-Washington region, that augurs well for Microsoft, given their success in driving alliance enabled solutions into the marketplace. Given Revolution Health’s (founded by Steve Case) announcement of it’s EHR last year and potentially, a competing EHR solution from Google in the foreseeable future, large scale patient adoption of a “Demand-Side” EHR solution for Personal Health Records (PHRs) from one of these vendors will be mission-critical for success.

As well, Healthcare Solution Providers like G E Healthcare (headed by Joe Hogan), Siemens Medical Solutions (headed by Janet Dillone), Cerner, Misys and Enterprise Software Providers like SAP, and many others also provide what I call “Supply-Side” EHR solutions (or simply EHR) targeted at Physicians and Hospitals.

Any new solution for Healthcare needs to address the needs of the 5Ps – Patient, Physician, Payer, Producer and Politicians. Given President Bush’s mandate for EHR adoption across all US hospitals by 2010 (which addresses politicians, payers and producers), the single largest challenge for EHR adoption and ubiquity, is patient adoption on the demand side and to a lesser extent, the physician/nurses/hospital adoption on the supply side.

EHR adoption by Customers - Daunting Challenges

Key to enabling this adoption is an understanding of the issues and challenges that I have modeled on the framework below, adapted from a seminal article entitled, ’Eager Buyers and Stony Sellers - Understanding the Psychology of New Product Adoption’ by John T. Gourville, Harvard Business Review (HBR), June 2006. The key premise is that the greater the level of change in customer behavior needed, the greater the barrier to customer adoption, despite the promise of value delivered by the new product. Gourville makes the point that producers of innovation often overestimate the customer adoption by a factor of 3X while consumers allocate significant value to their current product or service and demand a value proposition that is practically 9X times that offered (perceived) by their current product or service.

This framework enables stratification of new products and the consumer change behavior needed for adoption, into four logical categories, stratified into the four quadrants as shown below:

• Low Product Change (“me-too” products) with Significant Change in Customer Behavior needed, usually is a recipe for disaster (“Sure Failure”), and is manifested in the 70% of new products and services that fail within a year of introduction or less.
• Low Product Change demanding little change in Customer Behavior (product line extensions of a very successful category like the iPod for instance) is classified as an “Easy Sell”, and primarily involves market and channel awareness to drive sales.
• High Product Change (significantly enhanced perceived value from a new category, for instance) with a Significant Change in Customer Behavior will call for a “Long Haul” and slow, phased user adoption based on psychographic and benefit segmentation (early adopters and innovators acting as references for the mainstream market). Demand-side and Supply-Side EHRs and products like the Segway can be currently estimated to be positioned here.
• High Product Change (significantly enhanced perceived value) that demands little change in Customer Behavior is usually the recipe for a “Smash Hit”, since the compelling value proposition without significant learning curve effects, is sufficient for the customer to adopt. Apple’s new iPhone is an exemplar in this category.
  

Using this framework as the blueprint for EHR adoption, I have mapped demand (PHRs) and supply side EHRs below as “Long Hauls” that will demand significant efforts from the vendors to enable large scale customer adoption to turn these into "Smash Hits" as shown above. One can argue that legislation and regulations demanding EHR adoption in hospitals across the country, and availability of patient records in electronic format using outsourced transcription services etc. will ensure rapid supply-side EHR adoption and the more daunting challenge is getting patients to embrace the demand-side EHRs like Microsoft’s Health Vault.

That is rather simplistic and does not address significant challenges associated with supply-side EHR adoption such as common industry data standards, data interoperability across competing solutions, data capture and analysis etc. that need to be solved to ensure large scale adoption, and presents a huge opportunity for healthcare solution vendors like G E Healthcare, Siemens Med. Solutions, SAP, Cerner, Misys etc.

I will choose to focus this blogpost on demand-side EHR (or PHR) adoption by patients and will devote my next blog-post to the issues and challenges associated with supply-side EHR adoption.

The 'Demand-Side (Personal) EHR Product Lifecycle' and associated challenges - An "Enlightened Prosumer’s" Vision and Prognosis

Demand-Side EHRs or Personal Health Records (PHRs) using a platform like Microsoft’s Health Vault, can be prognosized to evolve over a four stage “PHR Product Life Cycle” as below, from my “prosumer vision and perspective” with their associated challenges that will need to be addressed, to ensure significant customer adoption, as below:

1. Personal Health Record (PHR) with Healthcare Search– a repository of patient records searchable by keyword, date and therapeutic area that can be shared with physicians and hospitals on demand i.e. the current state, exemplified by the Microsoft Health Vault Platform. The typical records Microsoft envisions being stored in the Health Vault range from fitness-related activities to basic measurements, such as blood glucose and blood pressure, discharge summaries from hospitalizations, lab results, medications and health history.

The single largest challenge today is to enable patients to collect, scan, upload, store and share electronic copies of their paper data that is currently stored in the manila folders in their physician’s offices, which is not trivial, by any stretch of the imagination. While tech-savvy “enlightened prosumers” are sold on the benefits of anytime, anywhere access and can easily scan and upload copies of their medical records, or leverage utilities like Microsoft's Health Vault Connection Center, to do so, this can be a daunting proposition for the majority of consumers/patients, who are challenged with even mastering their computers, cameras and cell phones.

It is this author's prognosis that there is an "Adoption Paradox" that will significantly impede customer adoption of the Demand-Side or Personal Health Records (PHRs). Most healthy patients have little incentive to create a PHR to be able to access their records on demand, anytime, anywhere. The PHR presents the most compelling value proposition as a life saving tool for patients with acute or chronic conditions who are vulnerable to sudden, unforeseen attacks that could potentially be fatal. Unfortunately, most of these patients (the prime target segment for the PHR) are also the least likely to have the technical expertise, resources or penchant for creating their PHR and putting it online, given the complexity involved.

There are at least three ways to alleviate this burden. First, provision of a scanning, and upload service ideally at a physician’s office that may demand a shared investment in the hardware and software from the EHR vendor and the hospital. This is far easier at hospitals that have already adopted supply-side EHR that usually provide PDF documents as standard outputs. Secondly, creation of a credit card sized USB based hardware device that would serve as a data capture, storage and retrieval device i.e. the mobile PHR that the patient can carry anywhere and access on any PC worldwide. Uploading the documents in PDF, word or graphic formats at the physicians office and automatic upload on linking with a broadband Internet connected PC via the USB ports at home, would go a long way towards enabling adoption. The third and most obvious, yet challenging mechanism is for patients to obtain electronic or hand written copies of their records and scan or enter them into the PHR at home at their convenience, leveraging utilities such as those provided by Microsoft(Health Vault Connection Center) above. Easing the burden of data entry, paper record scanning and upload is perhaps the single largest barrier to patient adoption that Demand-Side EHR or PHR vendors will have to transcend.

Linking content pertaining to cardiac disease management or diabetes from providers like WebMD, as well as embedded search algorithms (like Microsoft’s Health Vault Search) enables prosumers and patients to educate themselves on the latest research and their associated therapeutic outcomes and also lower their search costs on finding the best possible treatment from an array of branded, and reputed companies like Johnson & Johnson, Novartis, Pfizer, Medtronic, St. Jude Medical, Boston Scientific, Amgen, Genentech or the Mayo Clinic as examples.

Another real design consideration is the potential dissonance from Physicians and Hospitals since availability of PHRs would lower the cost of switching providers for patients and also provide hitherto impossible transparency into the costs of treatment. However, given the current regulations to drive mandatory adoption of EHRs across hospitals, this is the “new reality” that providers (physicians and hospitals) would need to reconcile themselves to and tradeoff against the significantly improved efficiency, cost-effectiveness and patient empowerment and satisfaction.

This would assure significant value to patients in terms of anytime, anywhere access to their critical healthcare information, the ability to share this information with physicians, relatives and hospitals on demand, and also lower their search costs on finding the best possible health alternatives.

2. Personal Health Dashboard and Health Commerce – is the next stage in this evolution of the PHR, aimed at providing a single unified overview of a patient's health, lower search costs, as well as enable online commerce to re-fill prescriptions, order home devices, and schedule physician and service provider appointments (in an ideal world).

Given the sophistication of currently available portal technologies like Microsoft’s Sharepoint and SAP’s NetWeaver to name a few, delivering a rapidly configurable personal health dashboard, targeted at tech-savvy early adopters and innovators is highly desirable. Having a single dashboard display the results of my last annual check up, my vital signs including height, weight, blood pressure, sugar and cholesterol levels, hyperlinked to their associated medical records, physicians, and potentially content research resources (like WebMD, for instance) would be extremely useful.

Additional desirable benefits would be electronic reminders (both online as well as text messages sent to cell phones or PDAs) to re-order prescriptions from mail order providers, as well as the ability to schedule appointments for annual check ups with a general practitioner or with specialists as needed. Integration of the PHR with the supply side EHRs and content from insurance providers like Aetna, would also enable access to the transactions associated with each physician visit or cost of medications, to track healthcare expenses accurately.

Over time, with evolution of common data interoperability standards, it is not inconceivable for supply side EHRs from hospitals to be integrated with the demand–side (personal) EHRs as shown in the adoption blueprint above, that will further accelerate both patient and physician adoption.

This would enable fairly painless data transfer from the hospital/ physician’s EHR to the patient’s PHR and also provide transparency into the costs associated with treatment, procedures and medication that is a huge challenge today.

Key anticipated benefits to patients would be a single unified view of their critical vital signs, superior compliance with needed diagnosis and medication, higher transaction efficiency, as well as higher transparency into the procedures and associated costs.

3. Dynamic Personal Health Historian with Exception based Management is the logical next step in the evolution of the demand side PHR. Given the huge numbers of perhaps the most prosperous retirees in the history of North America who will demand proactive intervention based healthcare (as envisioned in my previous blogpost - Can Life Sciences and Healthcare enable my evolution from “Passive Patient” to “Enlightened Prosumer”?), the PHR will need to evolve into a Personal Health Historian. This will demand that diabetes monitoring meters from J&J’s Life Scan division, or implanted medical devices like pacemakers and defibrillators from Medtronic, St. Jude Medical and Boston Scientific can interact with and upload streams of vital sign data (blood pressure, sugar levels, pulse rates, electrical impulses etc.) into both demand and supply side EHRs, wirelessly (leveraging blue tooth, RFID or wireless telemetry) to enable proactive intervention when these vital signs are in violation of physician determined threshold levels.

While this is a daunting challenge, this problem of a far greater complexity has already been well addressed in a manufacturing environment. Data Historians from companies like Invensys Wonderware, G E Fanuc and Siemens Automation capture very large amounts of data at a milli-second frequency from manufacturing equipment on the plant floor and also enable data retrieval, analysis and exception based management. Companies like G E Healthcare and Siemens Medical Solutions can be anticipated to borrow these currently available technologies from their sister organizations to render them viable in a supply side EHR context. The challenge then for a demand side EHR solution like Microsoft’s Health Vault is to capture these data streams and appropriately store them for retrieval, analysis and exception management for the patient. This can potentially be accomplished thru the mobile PHR/EHR solution referred to above, with blue tooth, RFID or wireless telemetry capabilities. As well, ability to interact with this mobile PHR/EHR need to be built into the next generation of devices from companies like Life Scan, Medtronic, St. Jude Medical, Boston Scientific etc., as well as the next generation of home based monitoring devices like blood pressure monitors.

For instance, sugar levels in diabetic children being monitored by a Life Scan device could be transmitted to the PHR. Violation of physician prescribed threshold levels, could trigger alerts to parents and the physician, ensuring rapid intervention to preclude further exacerbation. A similar paradigm can be envisioned for middle aged and senior patients with wearable or implanted devices, triggering off compliance reminders or proactive intervention before a serious life impacting event takes place, that would serve to both enhance their span and quality of life as well as lower costs of treatment, by minimizing emergencies, as laid out in my previous blog-post (Can Life Sciences and Healthcare enable my evolution from “Passive Patient” to “Enlightened Prosumer”?)

As well, bidirectional propagation of data on unforeseen outcomes in patients, transmitted to Pharma or Medical Devices manufacturers in near time would alert them on the adverse event implications of their products and enable them to address this within their innovation life cycle, to minimize the unforeseen and undesirable patient and financial impact of their new products. This is distant reality but definitely within the realm of possibilities.

There are significant benefits that can be delivered to patients using an exception based management approach to personal healthcare as suggested above. These include a higher quality and span of life thru superior therapeutic outcomes delivered at a lower cost per patient.

4. The Personal Healthcare Expert System is perhaps the “Holy Grail of Personal Healthcare” that PHRs should aspire to evolve into. This would involve incorporation of state-of-the art heuristics, neural networks, learning agents, decision support and predictive analytics based technologies that would be integrated with the Personal Health Historians from the previous stage.

In this paradigm, healthcare data would not only be stored but also analyzed against patient history and benchmark data from similar patient populations. Learning agents would assimilate patient history, behavior and responses to previous treatment to prognosize potential events well before they happen. This would alert patients and point them for diagnostic check ups from qualified physicians, with data on allergies, adverse reactions to medication types etc. to ensure a superior therapeutic outcome pre-empting and precluding incidence of debilitating events like cardiac or diabetic attacks or strokes, the largest causes of deaths in North America today.

The impact of these personal healthcare systems would be significant in terms of significant life impacting events avoided for the most “at-risk” patient population as well as the huge reduction in treatment costs that would result from their adoption. As well, this would potentially free physicians from mundane checkups and free up time to devote to critical patients as well as keep up with the latest research to better equip them to deliver the best possible outcomes for their patients.

Significant benefits for patients and providers from deployment of such systems would include reduction of life threatening events (and risks thereof) and associated costs for patients especially, the "at-risk patient population", as well as the Total Cost of Healthcare (TCH) per patient per treatment, which would significantly contribute to making healthcare more affordable in North America.

This is my humble attempt at visioning the product life cycle that demand-side EHRs or Personal Health Records (PHRs) can be anticipated to evolve thru, to enable widespread patient adoption and also meet the needs of the “enlightened prosumers” that “passive patients” are transforming into. It will indeed be fascinating to observe and map the trajectory that Microsoft’s Health Vault Platform for PHRs and competing solutions move thru, to enable customer adoption, against this "outside-in blueprint" and more importantly, the impact of this adoption on quality and cost of patient treatment. As always, your comments, feedback and perspectives are welcome.

Will Siemens, GE Healthcare, Johnson and Johnson, Medtronic and INTEL evolve into Senior Citizen Service Providers (SCSPs) in the near future?

Most of the population across the Western world, especially North-America and Europe is aging, without significant replenishment, as reflected in the declining birth rates in those continents. This is both a significant challenge and an enormous opportunity. The challenge comes by way of trying to provide Medicare and Social Security for these aging baby boomers with the financial responsibility of doing so, spread over a more modestly sized young and working population.

At the same time, given that most of these aging baby boomers have lived thru possibly the most affluent economic period over the last 100 years, providing what I term Quality Healthcare for Senior Citizens (QHSC), represents one of the most significant business opportunities of our times, and one that has the significant higher purpose of ensuring that our senior citizens have the very best in healthcare in their twilight years.

Given some of the challenges confronting the Life Sciences industries highlighted earlier (“Who moved my Blockbuster cheese” and “The 3 Questions that keep Big-Pharma CEOs awake at night?”), consolidation across industry segments (especially Pharma and Bio-Tech) is inevitable, and in fact, is happening as we speak. Compounding this will be the pressure from the government, patients and senior citizens to temper the rising costs of healthcare to a level close to inflation, especially given the ever increasing number of people who cannot afford health insurance (currently 47 million in the US alone).

A strategy for Life Science companies to deal with this challenge and exploit the incredible opportunity presenting itself, would be to either acquire or partner with companies across segments, to form an alliance of service providers to deliver healthcare services for senior citizens (as an example that can then be extended to the general population) focused by therapeutic area(s). For instance, it is not difficult for me to imagine an alliance of what I call the drugs-devices-diagnostic (D-D-D) producers like Johnson and Johnson, Medtronic and Siemens Medical Systems or GE Healthcare converge (in association with leading healthcare providers, or not) to create a network of healthcare centers focused on the needs of senior citizens, to deliver quality healthcare with the best outcomes at the most economic price points, given their economies of scale and scope.

Economically, this is an idea approximately similar to moving from “selling wine by the bottle to wine by the glass” whose time has come. Given the large number of high net worth senior citizens in North-America alone, who will demand and expect the very best possible healthcare, it makes business sense for companies like Siemens, GE, Medtronic and INTEL to collaborate and deliver what could potentially be very profitable services (relative to those on selling their products alone) leveraging the cutting edge technologies that they have already developed. These could all be deployed to create state of the art healthcare communities for senior citizens that would not only assure a great quality of life and social networking, but also proactive healthcare intervention predicated on a prevention/mitigation paradigm rather than cure, which can be anticipated to significantly drive down the total-cost-of-healthcare (TCH) per senior citizen, except in extreme cases.

For instance, it is not a stretch to imagine an INTEL inside hand held device, or one that can be worn like a wrist watch, that will not only help a senior citizen comply with the prescribed dosage of medicine but also monitor vital signs like blood pressure periodically, that can be transmitted leveraging wireless telemetry, over a cellular,WAN or WIMAX network to a central monitoring location, not dissimilar to that used for home security monitoring today. Technologies like Care link from Medtronic would also enable the same model to work with implanted or embedded medical devices like pacemakers, implantable defibrillators and even, perhaps, drug eluting stents, going forward. Remote monitoring of key health performance indicators and any variation thereof, would invite proactive intervention from a qualified nurse or a doctor, (based on the severity) who would of course, secure the patient’s electronic health record (EHR) on demand.

As well, having access to cost-effective access to the latest diagnostic technologies like 256 slice CAT scanners either on-site or in close proximity, and reasonable periodic screening, would significantly cut down the costs of treatment given that most chronic conditions (coronary heart and artery disease, risks of stroke or early signs of cancer) can potentially be detected early and treated appropriately, rather than detected when its too late and extremely expensive to diagnose and treat. Physical monitoring of the data centers could potentially be outsourced to low cost centers around the world, given the proliferation of data, call and even high end diagnostic centers in countries like India (it is fairly commonplace today for neurologists in India and Israel to perform the initial diagnosis on brain scans of American patients that are electronically routed to them) that have developed a robust healthcare system and support infrastructure.

I hope I have articulated well what in essence, is my vision for the high quality healthcare I will expect as a senior citizen, aligned with the vision of "Personalized Medicine for Enlighted Prosumers" elucidated earlier and would not be the least bit surprised to have these delivered by brands like Siemens, Johnson and Johnson, GE, Medtronic, and INTEL in the foreseeable future! If you believe this is far fetched, please take a close look a the mandate and mission of the recently formed Continua Health Alliance, with INTEL as one of the primary orchestrators of this shared vision. It would appear that my prognosis for affordable, Quality Healthcare for Senior Citizens (QHSC) enabled by these industry leaders in bio-pharma, medical equipment and devices, is a distinct possibility in the not-so-distant future!

Can Life Sciences and Healthcare enable my evolution from “Passive Patient” to “Enlightened Prosumer”?!

Most industry segments are focused on empowering consumers with information for buying decision making and in turn, receive customer insights that is deployed for better packaging, personalization, demand forecasting and product development. This is well aligned with the notion of the “demanding prosumer” who has radically evolved from the “passive consumer” of yesterday.

I, and millions of “passive patients” like me, in North-America and around the world, aspire to evolve into “enlightened prosumers” in a healthcare context, since this is in fact, "high-involvement buying decision making" that is potentially far more mission-critical and significantly impacts both span and quality of life, as compared with buying consumer electronics, staples and commodities.

Here is an articulation of my vision below.

What does this mean for me? For starters, I would like to have access to my medical records from anywhere, anytime, via the Web (electronic health record -EHR), that are currently locked up in the manila folders in my family or specialist physicians office, especially if I am involved in an unforeseen event or accident. Lack of access to this data on-demand today, results in thousands of deaths that can otherwise be easily prevented. Given that I am far more concerned about compromising my financial information, I simply do not understand the prevailing paranoia about loss of health data privacy especially when real lives are at stake. It makes no sense whatsoever, to enter my personal data every time I see a new doctor, or am subject to diagnostic tests, especially if, I cannot access that data when my live is at stake and I need it most! Consider the fact that over 80,000 lives are lost every year in the US of A alone, because of inaccuracies arising from manual or multiple data entry, prescription and deciphering errors or lack of timely access to healthcare records, and the severity of this issue becomes self-evident. Companies like Revolution Health (founded by Steve Case) are taking the first steps to make healthcare information accessible on demand, via the internet. On-demand access to your EHR anytime, anywhere, will save and prolong lives, and is absolutely an imperative whose time has come!

Secondly, I need better, more current therapeutic and clinical information at my finger tips on the web. For instance, if I am diagnosed with coronary arterial disease (CAD) by my family physician during my annual check up, I would like to be able to research all possible forms of treatment with data on associated therapeutic outcomes, and costs thereof, to be able to make some rational decisions (drugs–which one, or medical devices or both), collaboratively with my doctor, based on this qualitative and quantitative clinical trial and outcome data. I would also like to have the option of attending info. web seminars or live events delivered by Pharma or medical device companies informing me of the efficacy of their treatment options, based on validated clinical research data, ideally delivered by physicians and doctors who are unbiased experts, with opportunities of engaging with other patients who have been treated to get a true, fact-based and unbiased perspective.

Thirdly, If I am prescribed new medication and experience any side effects, I would like access to a help line from the manufacturer with a trained nurse at the other end advising me of what I need to do, especially if I need to wait 48 hours or more to secure an appointment with my doctor. I would like to have the option of informing my insurance company of the side-effect with the opportunity of getting alternative, potentially more expensive medication, if needed, predicated by the need for a superior therapeutic outcome, which would be more cost-effective for my insurance company in the long term.

Over time, it is not inconceivable for me to have treatments prescribed precisely for my needs, driven off my genetic profile, to minimize side-affects and assure optimal medical outcome. While this vision of “Personalized Medicine” seems like a distant dream today, I am very optimistic that I will live to see this vision transmuted to reality, to hopefully, positively impact the quality of my life.

As I grow older and have devices like pacemakers, defibrillators, drug-eluting stents implanted within me, I will need to be proactively monitored, to minimize risks. I would greatly appreciate remote monitoring of my vital signs using diagnostic, wireless and other pertinent technologies, that will proactively inform me if my blood pressure, pulse rate or insulin levels is out of whack and advise me of the appropriate remedial actions to take, to save my life. Having a watch like device on my wrist with data on the medications I need to take and when, would go a long way to ensure compliance with my medication and serve to significantly enhance my quality of life and lower the cost of treatment that logically, is anticipated to increase with age.

It is extremely encouraging to see the organizations like the Continua Alliance (a consortium of leading Pharma medical equipment, devices, bio-tech, software and hardware vendors including Astra Zenica, Medtronic, Boston Scientific, Siemens and Philip Medical Solutions and many others including Intel) work together this shared vision of personalizing healthcare and empowering patients, to assure higher therapeutic outcomes while lowering the total-cost-of-treatment for the individual, leveraging the best technologies and treatments available now, and in the near future.

I have laid out my vision for what it means for me to evolve from the "passive patient of today" into the “enlightened prosumer” of tomorrow with access to personalized, yet affordable medicine, to assure superior therapeutic outcomes and a higher quality of life. My research and analysis of the life sciences and healthcare industries tells me that this is eminently realizable in the foreseeable future.

In my next blog post, I will analyze why this is a win-win and makes business sense for producers, payers, providers, the government and all relevant stakeholders in the global healthcare value chain.

The 3 Questions that keep Big Pharma CEOs awake at night...

Apropos my earlier post "Who moved by Blockbuster cheese?", we see evidence of considerable turmoil in the Big Pharma segment from the often unforeseen impact of a blockbuster drug falling off the pipeline in the very late stages of development, as experienced by Pfizer recently from the loss of Torcetrapib, as well the more publicized loss of Vioxx by Merck.

Given the potential loss of almost $ 16o Bn in revenues from expiring blockbuster patents by 2015, year over year declining margins, and some of the challenges I have highlighted in "Who moved my Blockbuster cheese", it is my hypothesis that the economics of Big Pharma will potentially see a significant structural change with the questionable sustainability of this current model. The math is pretty simple - if you have market segments that cannot deliver $ 1 Bn annual revenue streams per drug, then you cannot produce these drugs at a cost of $ 800 MM to $ 2 Bn per molecule at the rate of one molecule in 25 turning into a commercially viable product, since you would be hard pressed to recover the fixed cost of the drug development, and also fund your innovation pipeline from the resulting profits. As well, spending 30 to 35 cents of every sales $ on sales, marketing and advertising - almost 3-4 X that spent on R&D become unviable.

Given these game changing and economics altering issues that is already causing a huge churn in CEOs and negatively impacting their tenures, what are the top three questions that Big Pharma CEOs need to challenge themselves with, and find solutions to?

1. Given the potential decline of the Blockbuster Factory model, what can we do today to dramatically reduce cost and time-to-market and significantly improve R&D productivity to preserve grow our revenues and market capitalization?

• How can we leverage Pharmacogenomics (Bio-Tech) and related technologies to decrease the concept-to-patient lifecycle from the current 7- 9 years and lower the current attrition rate of 1 drug from 25 compounds by 50% or less?
• How can we significantly lower the cost of development per drug ($ 800 MM to $ 2 Bn) by 30- 50%, to render it viable for smaller targeted market segments?
• How can we "fail" unviable products early in the product life-cycle to minimize astronomically expensive losses late in the development cycle, which can potentially impact our very survival as an organization?
• How can we leverage our brand to secure incremental generics revenue streams from drugs that will lose patent protection in the foreseeable future?
• How can we “re-position” existing drugs in the market for new indications and incremental revenue streams?
• How can we enter new markets with cost-effective delivery models, especially in emerging markets like the BRIC (Brazil, Russia, India and China) countries?
• How can we improve our acquisitions/ alliance / licensing management processes to improve agility in bringing products to market?
• How can we viably outsource non-core processes like Clinical Trial Management to high-skill/ low-cost locations like India, especially for re-positioning existing compounds?
• How can we leverage scientific/ technological advances to assure superior therapeutic outcomes in our target patient population?

2. How can we embrace Operational Excellence to significantly improve efficiencies across our business processes, and reduce operational costs to grow our operating and net margins?

• How can we collaborate effectively with our customers to drive a more accurate demand forecast?
• How can we integrate our supply chain with those of our customers and trading partners to deliver high customer service levels and minimize stock-outs, with significantly lower inventory, given that we practically have the largest inventory levels of any industry and the lowest inventory turnovers (see graph above) and yet fail to deliver service levels comparable with our peers in consumer products and hi-tech as examples?
• How can we produce product of the highest quality in all of our manufacturing facilities (and those of our contract manufacturing partners) using Good Manufacturing Practices (GMP), and in compliance with national/ local regulatory requirements?
• How can we embrace Lean and Six-Sigma to lower waste and operational expenses and continuously improve processes across our manufacturing and supply chain?
• How can we ensure product authentication and track and trace products from product to patient to combat counterfeiting and fraud?
• How can we deploy analytics via role-based dashboards to monitor, measure, analyze, control and improve performance across people, processes, partners and assets?
• How can we secure a 360 degree view globally, of all our compliance requirements and automate and manage these by exception, at the lowest cost of compliance?

3. Given possibly the highest sales and marketing spend (see figure below) that we currently have relative to any other industry, how can we improve sales and marketing productivity, lower costs, and provide superior information delivery on-demand, to providers, patients, payers and the general public?

• How can we train and effectively rationalize and deploy our sales reps. across product lines and geographies to eliminate overlaps and ensure maximum return per provider interaction?
• Given the information overload that physicians are subjected to, how can we effectively detail our offerings and train them to appropriately position our offerings to patients?
• How can we proactively leverage the Internet as a channel and CRM/ Portals /e-detailing and similar technologies to effectively deliver information to providers, patients, payers and the general public on demand, and also lower cost of information dissemination?
• Can we leverage thought leaders and media leaders effectively as spokespersons for the benefits delivered by our products, to influence and shape patient demand?
• How can we effectively monitor, measure, analyze and improve (on a 360 degree basis) our sales and marketing initiatives to drive revenue and brand uplift at a lower cost of SG&A?

I firmly believe these are the key questions that CEOs of Big Pharma companies need to challenge themselves with, analyze and find solutions to, to prepare themselves for the game change in the economics of the pharma industry that will unfold over the foreseeable future.

The great news is that with the highest margins of any mainstream industry (see above) and innovative technologies like Proteomics, Genomics and Pharmacogenomics that present incredible possibilities, Big Pharma is well positioned to deal with this structural change if and only if, CEOs can ask the tough questions to challenge the status quo and lead the change management needed to alter the well-entrenched and highly inefficient processes and practices that have served Big Pharma well in the Blockbuster years, like Jeff Kindler, the new CEO of Pfizer is attempting, in sharp contrast to some of his peers. We will find out soon enough whether he succeeds or not!

I will analyze each of these challenges and their business implications and potential solutions, in my future posts - please stay tuned.

Please let me know if I am addressing the pertinent questions and issues or am way off mark - I welcome your feedback and perspectives.

Branded Pharma - Who moved my "Blockbuster Cheese"?!

Despite enjoying the highest operating and net margins of any mainstream industry (see below), life-science companies especially Branded Pharmaceuticals find themselves challenged with expiring patent protection on Blockbuster drugs, that will potentially put at risk over $ 160 Billion in revenues by 2015!


Indeed, it is time to question the sustainability of the Big Pharma Blockbuster model, because of the following macro and micro-economic factors impacting the business environment:

1. The need for superior clinical outcomes from treatment at a lower cost, from patients
2. The ability of generic manufacturers, especially across the world, to quickly bring a blockbuster substitute to market, following patent expiry
3. The rising cost and time-to-market of drug development (> $ 700-800 million per drug) and reduced productivity (approx. 1 in 25 compounds makes it to the market as a viable commercial product) that is impacting the margins of the Pharma industry as a whole - margins have stadily declined over the last four years
4. Pricing pressures to combat the higher-than-inflation price increases of insurance and treatment from the government, payers, businesses and patients themselves

Given this reality and the impending decline of the Blockbuster Factory model, branded pharma CEOs face the daunting challenge of bringing a larger number of drugs to market faster at a lower cost, and targeted to smaller market segments with annual revenue potential of less than $ 1 Bn per drug that most blockbuster drugs have delivered over the last 10-15 years.

This calls for a radical re-thinking of the current paradigm and potentially, a transformation of the Blockbuster factory model. Potential imperatives to render this new model viable, for success and competitive advantage include the following:

1. Deploy automated target screening technology to be able to screen a far larger number of target compounds, using "in-silico" drug discovery platforms
2. Focus on therapeutic areas of strength to preclude dilution of resources and leverage economies of scale, scope and learning curve advantages
3. Leverage (build, buy or partner) bio-tech and pharmacogenomics in combination with traditional combinatorial chemistry based development, to innovate faster and potentially cheaper - pharma companies currently have cash on their balance sheet considerably greater than the combined market cap of all bio-tech companies combined - in the next 5-10 years, I prognosize that the lines between Pharma and Bio-Tech will blur and metamorphose into Bio-Pharma
4. Explore re-positioning of existing drugs to find new, targeted and potentially highly lucrative indications, to assure new revenue streams
5. Clinical trial management often contributes 50-60% of the total drug development costs, and can be outsourced to hi-skilled, lower cost locations like India and China, and to companies that have developed Clinical Research Outsourcing (CRO) as a competence, like Biocon, the largest bio-tech company in India
6. Develop a collaborative platform for drug discovery, development, and manufacturing to connect the silos that exist not only between functions, but also enables intra and inter-enterprise collaboration with partners across the globe
7. Embrace operational excellence (please read my impending blog on "Why can't Life-Science companies become like P&G, Dell and Toyota?") to slash current inefficiencies across R&D, manufacturing, supply chain, procurement, compliance and sales and marketing. As an example, life-science companies deliver far lower customer service levels (98.4 %) and have the lowest inventory turnover (just 1.5 to 3 times annually) despite carrying the highest inventory levels of any industry (100-200 days on average). Addressing operational excellence would enable CEOs to release cash flow for innovation
8. Life-Sciences companies approx. spend 30-35 cents of every sales $ on sales and marketing- among the highest of any industry segment. The model of adding highly paid but often not-adequately trained sales people to secure face time with physicians and push their products is fast reaching the point of diminishing returns. The model needs to be transformed based on well-trained "solution sales professionals" targeted at physicians based on their life-time revenue potential for the company and sales person. Also, deploy e-detailing and automated marketing techniques leveraging the Internet as an effective channel to reach beyond physicians, to influence buying and paying behavior of patients, payers, governments and all relevant stakeholders and nodes in the Healthcare Value Chain
9. Last but not the least, securing, analyzing and using patient insights to shape new treatments and demand is currently a distant, but not so impossible dream. Being able to secure access to Patient Electronic Records (espeically from clinical trials) and running advanced analytics would not only enable life-science companies to prevent astronomically expeensive late stage product failures, but also proactively communicate efficacy of new treatments with the patient population afflicted with that disorder (Multiple Sclerosis as an example) to drive superior clinical outcomes and potentially, highly profitable revenue streams

Please re-visit this blog for future posts that address some of the solutions I have enumerated above.

Apropos the well known Chinese proverb, "May you live in interesting times", these are interesting times for the life-science industry, and especially branded pharmaceuticals, for sure!

Why am I Passionate about Life-Sciences and Healthcare?

After 16 years of product marketing and management experience across 3 continents, one expects to have seen it all. However, I was little prepared for the gut wrenching experiences that the death of a loved one or my own health issues would foist upon me.

The introspection and soul searching that culminated, led me to some serious revelations about myself, what I truly care about and cherish, and perhaps most importantly, what I would like to devote the rest of my life to.

I came to the conclusion that my life would be best devoted to "the cause of life" - enabling technology to enhance the quality of human life, not only in the United States or North America, but globally, given that more than 80% of the world's population do not have access to what can be called adequate healthcare by any stretch of the imagination.

Wouldn't it be extremely worthwhile to be a part of the next-generation of advances in diagnostic imaging such as 256 slice CAT scanning equipment or bio-markers from Siemens Medical Solutions or GE Healthcare, which can abet in the early detection of disease, that not only provides a greater probability of a superior patient outcome, but also considerably reduces the cost of treatment across the world? Wouldn't it be an extremely gratifying experience to contribute to life-saving solutions that sit at the cusp of drugs and medical devices like drug eluting stents from companies like Medtronic, Boston Scientific or Johnson and Johnson that I deeply admire? Is there a higher purpose in life to aspire for, than to experience the joy and fulfillment of seeing real people being delivered from the excruciating agony, the loss of dignity as well as the "death sentence" imposed by highly debilitating diseases like Alzheimers, Multiple Sclerosis (MS) and AIDS, or helping alleviate the suffering and fatalities in infants and children, in the developing areas of the globe?

This is what I am passionate about more than anything else in the world and aspire to harness, deploy and fulfill my passion now and in the foreseeable future. Dedication to "the cause of life" is my idea of 'a purpose-driven life' -making a difference to, and giving back to society that has provided me with an incredible education as well as the freedom and the opportunity to realize my potential.

Am I way too naive or does my dream and passion make any rational sense at all? Considering that the greatest minds and leaders of our times (Bill Gates, Warren Buffet, Bill Clinton and countless others worldwide) are focused on measurably enhancing the quality of human life globally, it probably does!