Pharma needs ‘radical change’ says report
pharmafile | April 9, 2014 | News story | Medical Communications, Sales and Marketing | Chris Stirling, GSK, KPMG, digital
The pharma industry needs a complete overhaul of its entire business model with a greater focus on the patient, according to a new report from management consultants KPMG.
KPMG’s analysis says that pharma’s return on R&D expenditure has fallen from an industry average of 20% two decades ago to just 10% today, while price-earnings ratios have fallen ‘dramatically’.
“The business model that has powered the pharma industry over the last few decades is showing signs of fatigue,” says Chris Stirling, global head of KPMG’s life sciences practice.
“Costs are sky-rocketing. Breakthrough innovation is ebbing. Competition is intense and sales growth is flattening,” he adds.
It all adds up to investors attributing less value to companies’ pipelines, KPMG contends.
The perception of the pharma ‘value chain’ needs to change to a new ‘value ecosystem’ “which puts the patient and the customer at its centre, with other business services wrapped around their needs”, KPMG believes.
“Despite testaments to the contrary, the fact remains that the current industry model does not put the patient at the heart of its decision-making,” Stirling suggests.
“Judgements are instead driven by developments that create blockbuster products, which in turn are expected to drive blockbuster returns for shareholders. Such an approach demands an all-consuming focus on products, and all too often leaves the patient as an afterthought,” he says.
Pharma will argue that KPMG is describing a change that is already taking place, with patients increasingly seen as crucial in the development of drugs.
And the blockbuster model has long been seen as outdated by pharma, which is switching R&D efforts to reflect a move towards greater personalisation of treatments.
KPMG describes an unnamed life sciences company’s approach to diabetes – with a pilot project delivering a text alert service reminding patients to take their medication and providing treatments for other aspects of the disease such as eye tests – as the way forward.
“Such a model truly addresses the full spectrum of patient needs, and not just the symptom of high blood sugar,” Stirling says. “Ultimately, the approach has led to better patient outcomes through improved compliance and glycaemic control.”
Pharma is already making moves in this direction as health services recognise the potential benefits of increased self-management. KPMG suggests that collaboration between pharma firms is “imperative” to make this change – but acknowledges that initiatives such as clinical trial data sharing are already in place.
It says open-source R&D is ‘being pioneered in India’ to speed up discoveries in treatments for diseases such as tuberculosis, malaria and HIV.
However, such efforts are more widespread than that: last week GlaxoSmithKline announced it was putting £25 million into Africa’s first ‘open lab’ for non-communicable diseases – a model it already has up and running to look at diseases of the developing world such as malaria, tuberculosis and leishmaniasis at Tres Cantos, Madrid.
Adam Hill
Related Content
GSK’s Exdensur receives MHRA approval for asthma and rhinosinusitis
GSK’s Exdensur (depemokimab), a twice-yearly biological medicine, has received approval from the UK Medicines and …
Multiple myeloma treatment approved in Japan
GSK’s Blenrep (belantamab mafodotin) combinations have been approved by Japan’s Ministry of Health, Labour and …
US FDA expands Jemperli (dostarlimab-gxly) plus chemotherapy approval to all adult patients with primary advanced or recurrent endometrial cancer as the first and only immuno-oncology-based treatment to show an overall survival benefit
PHILADELPHIA–GSK plc today announced the US Food and Drug Administration (FDA) has approved Jemperli (dostarlimab-gxly) in combination …
