For life science companies, a pivot to the patient is the best form of defense

Successive waves of disruption are reshaping healthcare. And like other asset-heavy industries, the life sciences sector is heavily exposed to compressive disruption that slowly erodes growth, profitability and value. At the same time, incumbents are facing fierce competition from new players. Everyone wants a bigger share of the healthcare value chain—with many intent on changing it. What happens next will shape the industry for years to come.

Disruption in the sector means that the industry incumbents are more vulnerable than before. Companies can no longer rely on significant barriers to entry to shelter the incumbents in asset-intensive businesses like life sciences from sudden and radical change. In addition, large incumbents with a long track record of success in their core businesses often overestimate the lifespan of their business models and under-invest in building new ones.

All of this means that some of the biggest industry players have realized that to stay competitive and profitable, they need to evolve from selling products at volume, to delivering value through better patient outcomes – a pivot to the patient.

This approach provides the opportunity to reinvent the patient experience and redefine the future of healthcare. New business models are at the heart of the changes.

The consumerisation of healthcare where many people expect support and treatment to allow them to live normally despite any illness, are now happening against the backdrop of new technology and changes in the scientific landscape. Both are set against the changes in socio-economic trends across the world. In some countries, the costs of healthcare are rising faster than GDP, while globally the population is aging. The number of people over 60 is expected to grow by more than 50 percent, from 901 million in 2015 to 1.4 billion in 2025. Alongside this the industry needs to consider the impact of chronic disease as it grows at a similar rate, increasing by 57 percent by 2020.

So what direction should the major players be taking? Specialized medicines are expected to contribute to 52 percent of top 100 product sales by 2024, while mapping the human genome is providing breakthroughs in personalized treatments where investment and efficacy can be more certain. This focus on the individual patient is the direction the industry has started to adopt, helped by a convergence of science and technology that focuses on the treatment of the individual.

This will be enhanced as life sciences companies harness big data sets produced by a range of sources including payers, health providers and devices. I cite devices because they are set to become an ever-richer source of data as a combination of AI, IoT, cloud and wearables allows for real-time insight. We are entering the realm of “always” on patient care.

As they transform their core business, life science companies need to invest in products and capabilities to create new value, becoming more competitive and able to drive and harness innovation. The focus for this can be on creating market dominance in select therapies or driving value from advanced data analytics. Most companies should also be considering how to connect with patients in new ways as well as embracing smart connectivity with the help of Industry X.0.

For industry players that want to reinvent themselves is to harness digitally-driven innovation to change their focus. This may include applying intelligence and services to the scientific and therapeutic model across their value chain to attract new customers and compete with new entrants. There is also a significant opportunity to reposition offerings as outcomes-driven programs. And they should also look to drive value, grow revenue, and build a competitive advantage through new platform offerings.

For those ready to seize the opportunity, it’s creating infinite new possibilities to reinvent the patient experience and redefine the future of healthcare. Some in the life sciences industry have started to shift from a traditional focus on delivering volumes of products to delivering improved patient outcomes and value to the healthcare system. This is what patients are seeking. Brands are not major influencing factors when patients consider new pharmaceutical products. More than two-thirds of patients we surveyed said the product’s benefits – i.e., treatment outcomes – are more important than the brand itself, with less than one-third citing a strong affinity to brands in a healthcare setting. The race is on to deliver better, measurable outcomes for patients, shareholders and the broader healthcare ecosystem.