Highly Crowded & Highly Segmented: The Structure of the RWE Market

Back in 2017, I had the opportunity to speak about real-world evidence (RWE) to investors gathered for the J.P. Morgan Healthcare Conference—what RWE is and why it’s critical to the commercial viability of new medical interventions (click below for that article).

Now, six years later, the market for RWE services has continued its impressive growth—much of it fueled by private equity and venture capital—to the point where an assessment of market structure may be in order.

When we take a panoramic view of the RWE market we see that it is jam-packed with a number of long-standing players and an even greater number of new start-ups. But what is equally striking is how different these companies can appear, not just in size but in scope of what they offer. In short, the RWE market structure is both highly crowded and highly segmented.

It’s important to understand the nature of the market segmentation as it bears implications for how others may choose to enter the RWE market. The graphic below depicts my take on the key market segments as well as a nonexhaustive list of example business entities within each.

Let’s take a look at the main segments:

1.???Contract Research Organizations (CROs). The global CROs have the research infrastructure (people, process, technology) to enable primary data collection all over the world, which gives them a leg up on the conduct of some mainstay approaches to RWE generation, including prospective observational studies, patient registries, and pragmatic clinical trials. Given the high entry barriers (building all that infrastructure is expensive!), this segment has been relatively stable over time, with a handful of entrenched large-scale competitors.

2.???General Data Aggregators. This market segment consists of suppliers of real-world data (RWD), usually healthcare claims, sometimes electronic health records (EHRs), and sometimes linked claims/EHRs. Some of the players in this segment are long-standing, while others are relatively new. These companies license access to raw data and, in some instances, to products (eg, informatics dashboards) that facilitate insight generation.

3.???Oncology Data Aggregators. Companies in this segment aggregate data from oncology unit EHR systems and, because so much critical detail is in free text fields, use manual and machine-based methods to extract data from the unstructured part of the EHR. The oncology data providers license access to the data and usually have analytics teams to provide research services.

4.???Platform Providers. This segment contains a heterogeneous mix of companies that offer their own proprietary technology platform. These can be subcategorized as platforms for (a) data analytics; (b)?remote data capture (eg, eCOA/ePRO); or (c) decentralized clinical trials (DCTs). These companies have in common that their platforms emerged from technological advances in coding (eg, R open-source language), cloud-based data storage, and connected devices (eg, smartphones).

5.???Proprietary Registry Providers. Companies in this segment build their own patient registries in specific disease areas to collect RWD prospectively over time. They then license data cuts and/or partner with study sponsors for customized supplemental data collection within the registry. Sometimes, the registry is leveraged as infrastructure for conduct of embedded clinical trials.

6.???RWD Market Makers. Companies operating in this segment create online marketplaces that facilitate the exchange of RWD sources between suppliers and buyers. Prospective buyers can use the interface to specify their data requirements and the sources that will potentially meet those requirements are listed (usually anonymized). Price negotiations follow until the transaction is consummated and data access granted. ??

7.???HEOR Consultancies. This segment has a healthy mix of long-standing competitors and upstarts. What they tend to have in common is that they do not have proprietary RWD sources or analytic platforms in-house. Instead, they are “data-agnostic,” accessing the most appropriate RWD source(s) for the research questions of interest, and perform advanced analytic methods beyond what is available on existing analytics platforms.

8.???AI Analytics Providers. The newest and most fluid market segment, by far, the AI providers apply artificial intelligence techniques to extract insights from RWD sources. Natural language processing is used to create structure from free text fields in EHRs and machine learning methods are used to explore complex correlations in variables in RWD sources. The recent introduction of large language models (eg, GPT4) is providing impetus for further innovation in this segment.

So why does this matter? In my consulting work, companies frequently tell me they want to get into the RWE market, but they typically don’t know how to go about it. They find the market bewildering, with companies as different from one another as IQVIA and Optum enjoying prominence. The value of the market segmentation analysis is that it provides a basic framework to structure the thinking and planning around our discussions of strategy and tactics. Companies can determine which segment(s) they plan to enter, whether they want to compete or partner with incumbent players, and so on.

It’s all foundational to the more in-depth strategic business planning needed to execute a successful entrance to the highly crowded and highly segmented RWE market.

#rwd / #rwe, Rubidoux Research LLC