Table of Contents

Introduction

Healthcare’s Spotty Record with Digital Adoption

The Need to Optimize your Therapies with Digital - Today

5 Key Steps to Achieving a Successful Partnership between Commercial and R&D

Leading Firms are Already Ahead in the Race to Digital

Introduction

As many healthcare organizations entered 2020, digital transformation and innovation were becoming increasingly popular ideas, and many biopharma companies began testing the waters more seriously. But as the COVID-19 pandemic arrived, spread and soon disrupted all aspects of life, having a digital health strategy shifted from a ‘nice to have’ to a ‘must have.’

Done right, digital health can make an organization more efficient, more profitable, and better able to serve and delight patients. It is this last point that is most important, and should drive any effort. Organizations that fully embrace digital will also gain significant competitive advantage in a crowded market, whereas those who don’t sign on will quickly find themselves among the laggards.

A successful digital health strategy requires an all-hands-on-deck effort, and that is especially true of Commercial and R&D. In this white paper we examine why it is so critical that Commercial and R&D form a close partnership in order to accelerate digital innovation, what should drive the strategy, what pitfalls they may encounter, and what 5 steps should be taken to ensure success.

Healthcare’s Spotty Record with Digital Adoption

When it comes to the adoption of digital strategies and digital technologies, the healthcare sector has seldom been viewed as leading the way. Indeed, in many ways, healthcare is in the middle phase of this lengthy journey.

If you compare healthcare to financial services or the airline industry, for example, it's just not that far advanced. If you were to ask me to score it, from zero to 100, it’s probably at 50 right now," notes Fred Hassan, Chairman, The Caret Group, Director, Warburg Pincus LLC, and Board member of Amgen, Precigen, Theramex and Vertice. "With something as regulated as healthcare, and with regulation being a bit of a moving target, there's a tendency to be more risk averse."

The good news: There is tremendous interest in digital innovation across all of biopharma to optimize therapies through digital, Hassan stresses. The result is that there isn’t a CEO at a top biopharma company today that doesn’t have digital health on their agenda.

Applying technology to healthcare will revolutionize the way we deliver care globally by making it more effective and efficient. There is a huge opportunity for technology to democratize healthcare and increase access for many more patients," notes Jeffrey Leiden, M.D., Ph.D., Executive Chairman of Vertex Pharmaceuticals.

Leading organizations are looking at using digital to make clinical trials more efficient and to capture more data in trials to generate more robust findings, particularly around quality of life measures," says Brent Saunders, Former Chairman, Founder and Chief Executive Officer at Allergan. "Commercial organizations seem to be in earlier innings when it comes to digital due to a lack of a real digital team and underlying infrastructure."

For biopharma, improved adherence is frequently the goal of a digital strategy. It has been for decades. And adherence improvement is the easiest business case to make to top executives or within your organization, says Paul Upham, Head of Smart Devices at Roche/ Genentech. In the case of higher price pharmaceuticals, a very small fraction of a percent increase in adherence rates in a given market is often associated with millions of dollars of additional revenue.

Saunders agrees that compliance and adherence are a bit of a holy grail in medicine. "There’s a very high percentage of solvable diseases that are simply not handled appropriately because patients don’t comply with their medications. Statins, glaucoma medicines, etc. are examples where patients stop taking the drug after three months or so, despite the fact that lack of adherence directly impacts quality of life. Adherence for these drugs are measured in hundreds of days, but should be measured in years."

Chris Easton, Senior Director, Global Commercial Lead, Personalized Health & Innovation, Innovative Patient Solutions, at Takeda suggests moving further upstream even before adherence.

"Currently, [in its simplest form] biopharma looks at where patients have a symptom, and provides a solution in terms of a drug. We need to move from treating symptoms to preventing episodes. Patients are worried about when the acute episode might come. For example, with hemophilia - how can I avert a bleed? Or how can I reduce a bleed? Digital innovation should be about being predictive, alert, informed and patient-outcome focused," Easton says.

Launching digital health solutions is all the more important now, of course, because of the COVID-19 pandemic.

"Digital health has advanced much further because of other sectors demonstrating how digital can provide you with a competitive advantage, especially during a global pandemic," Hassan explains. "Look at how online e-commerce has greatly taken over from the retail sector. Examining how other industries are adopting digital and differentiating – or not and suffering because of it – will dramatically move digital health forward in biopharma."

The Need to Optimize your Therapies with Digital - Today

It seems like every week there's a new partnership or investment or acquisition by a biopharma organization in the digital space - a race to be the digital health leader," says Dimitriy Kolodin, Vice President of Innovation at AbbVie.

It’s no wonder. In the biopharmaceutical industry, innovation is in the DNA of the entire sector, notes Saunders. "The reason we exist to begin with is to innovate around science. Our primary objective is to solve for unmet medical needs or to make people's lives better. Digital is simply another road for biopharma to travel down to do things that are innovative and exciting."

From a pharma perspective, the most important point for me is that digital health innovation should not be approached as an ‘add-on’ to a medication – neither from R&D or from the Commercial side. Instead, digital health innovation should be grounded in a deep understanding of patient needs," says Tobias Silberzahn, a partner at McKinsey & Company, who is based in Germany.

However an organization pursues its digital health strategy, there are several questions it must address upfront. They include:

  • What use case is the organization trying to address?
  • Does the organization need a separate digital group to drive the efforts?
  • What should the role of IT be in the effort, and what technology investments are needed?
  • Should the organization buy or build the required technology?
  • How flexible is the technology from an integration standpoint?

Organizations that have the right answers to these questions and are prepared to adopt a digital health strategy can quickly differentiate themselves competitively in a crowded market.

In fact, top biopharmaceutical companies are already there, and there are key areas where they are benefitting, says Kal Patel, M.D., CEO and Co-Founder at BrightInsight.

One benefit is in sharing insights gained by R&D through the use of digital tools to the Commercial side. "It’s really important that organizations build a loop between products being developed and being used in the real world. If you align the two, the digital innovations developed by R&D can translate as a huge benefit in the Commercial world," says Patel.

Not partnering will delay time to market for your new innovation (whether it be a therapy, device or digital product), and slow down the process of getting your product into the real-world (“the bench to clinic”). Organizations that lack this collaboration often have to restart the process when product development is handed off from the R&D stage to Commercial, since each side is working independently, Patel explains.

Part of the problem is that firewalls between Commercial and R&D have been built over time out of a risk avoidance posture to avoid regulatory challenges," says Dan Goldsmith, CEO at Tendo Systems, former CEO, Instructure, and former Chief Strategy Officer, Veeva. "Those firewalls grow roots, and organizations don't necessarily revisit the ‘why’ behind them. With digital, the barriers that have been established should be revisited."

But organizations that realize the importance of Commercial and R&D collaboration and act on it can use digital to leapfrog the competition.

"I've experienced some good examples at Roche, where even proactively, a Commercial team has been thinking very carefully and deeply about a digital strategy for a new product that's in development," Upham says. "These Commercial teams are often engaged while a product is in phase two, but more often than not, phase three clinical trials. The fact that they're engaged thinking about a digital strategy that early, when we know that the drug might not even succeed, are early signs of a much more sophisticated understanding of digital strategy."

Hassan has observed similar examples of partnership between Commercial and R&D.

"By phase two of drug development, Commercial leaders are already thinking about the digital components of a therapy. Partnership between Commercial and R&D is much more deeply established now than ever before in our industry," Hassan explains.

"One very good technique that some biopharma CEOs use is to always ensure that whenever there is a presentation from the head of R&D, the head of Commercial is in the room, and vice versa. This leads to tighter collaboration and alignment between the two organizations," Hassan explains.

"So the CEO starts speaking to them together as one team. Just simple tactics like that can make a big difference in the culture of any company," Hassan says.

Leading organizations will seize on the opportunity to use technology to accelerate digital innovation. Laggards will miss out and have a difficult time remaining competitive.

What’s clear from speaking with a number of biopharma experts as part of this research is that it’s important for Commercial and R&D to partner and drive digital together.

"Part of the challenge is that R&D, Medical, Market Access and Commercial are – at least partially – different organizations in a pharma company," Silberzahn explains. "This means that they often have different organizational incentives, or definitions of what success means for their respective organization. For example, does it make pharma R&D successful if their research includes digital health innovations? Is a medical organization incentivized to increase patient satisfaction via digital health innovations?"

5 Key Steps to Achieving a Successful Partnership between Commercial and R&D

Different groups and functions within biopharma have traditionally worked in silos over the years. Consider the "device" groups within biopharma that were built 20 years ago, and compare them with the digital groups today.

These device or combination product groups worked independently and didn’t share insights or information, at the expense of advancing the organization.

Digital shouldn’t make the same mistake, and in fact, necessity is now driving tighter collaboration between Commercial and R&D.

Experts agree there are five key steps to developing strong alignment between Commercial and R&D execs to ensure an organization’s success with digital innovation.

STEP 1: Have a strong business case for pursuing digital, and define your success metrics upfront

It is important for the organization to define what success with digital innovation looks like upfront, and to put metrics in place that will properly measure progress toward those goals. Do not embark on a digital journey just for the sake of saying the organization did so. It must be driven by a clear patient-focused and business objective.

"Digital for digital’s sake is a very big potential pitfall," Hassan says.

Start by ensuring that everyone has a very crisp, clear understanding of what a well-thought out digital strategy looks like, Upham stresses. That can avoid a lot of wasted time, effort and money.

"Get access solutions teams and reimbursement experts involved early to think through, not only the digital ecosystem, but also what the business model that sits behind this should look like," Upham advises. "Is it going to be a traditional biopharma model, and all these digital tools are given away, or do the digital tools become an enabler of value-based contracts?"

One method for defining success with digital innovation is to figure out the best commercial model first, and then work backwards to determine metrics and mileposts," says a digital health executive at a leading life sciences company.

"You have to flip the pharma equation," Arora says. "In the typical business model it sometimes takes a decade for a product to go to market. But as your costs come down, your margin improves, and then you get a handle on the model that is the right fit. Digital health is sort of the opposite of that. You almost have to figure out the commercialization first and then work backwards. You must ask, ‘What must I do in terms of clinical proof points?’ How would I measure success? How will I scale? Who's going to pay for it? When are they going to pay for it?

What is the minimum viable product (MVP) that I need to build? You have to figure out your commercial model first, and then work your way backwards."

It’s also important to avoid complexity in defining the goals of a digital innovation strategy and establishing proper success metrics.

"Don’t over-complicate it. Keep it simple," Easton urges. "Use the language that your patient would understand to tell a story for all of the stakeholders. Speak the language of the internal customers you’re trying to convince."

STEP 2: Take an Enterprise-wide Approach

Commercial and R&D execs across biopharma organizations need to think about digital jointly, as a team. They should take an enterprise approach when it comes to developing digital health products and selecting the supporting platforms and technologies.

Taking an enterprise approach with digital begins with engaging the C-suite. There simply must be a digital champion at the executive level.

"You need to have champions that have influence inside the organization - the people who can influence the culture, the attitude, the ability to get things done," Saunders stresses. "There is always natural resistance inside an organization for anything new or different. If I'm the CEO, I'm going to pick somebody who is respected inside the company and someone who's got a track record of getting things done. I don't care what department they come from. That's the person I'm going to ask to really get momentum behind a digital initiative."

Hassan agrees. “It always starts with the CEO and his or her championship of digital as a productivity tool. It is very easy to get lost in the system if there is no champion at the top,” he says.

Once the C-Suite is engaged, you need to examine what sorts of resources will be required to maintain a digital innovation strategy. The associated costs for them will depend on how many markets the organization is launching a new product in and the analytics tools needed to support decision-making.

Even if some budgets and projects reside in R&D and some in Commercial, aligning on a common infrastructure that can scale in a compliant way across regions and projects is critical. But you won’t have these sorts of discussions unless Commercial and R&D are partnering.

"I also believe that a separate budget owner makes a very big difference; it sends a very clear message," Hassan says. "For example, if a company's digital spending is 2% of sales, and the benchmark is for 4% of sales, the CEO should be asking the question, ‘Why are we below the benchmark when digital will be such an important aspect of our competitive differentiation?"

Upham recommends an organization like the one used at Roche.

"We have a global product strategy organization which is focused on looking at strategic initiatives that might be leveraged across the portfolio. Those Commercial team members play a critical role in determining what the trends are that influence different therapeutic areas, different types of stakeholders, and where our markets are moving. They can really set the tone for a particular market or a particular set of therapeutic areas in terms of encouraging lifecycle teams to be paying attention to the digital dynamics," Upham explains.

STEP 3: Understand How Regulatory Requirements Impact your Digital Strategy

It’s critical that even from the start – in the development stages – that you are building your digital health products on a regulated infrastructure.

"Regulation should not be an excuse to not innovate. It is something that you should be aware of, and something you should keep top of mind when selecting digital health vendors. Having a platform that natively meets regulatory requirements is much easier," says Goldsmith.

Diana McKenzie, Board Member, Change Healthcare and Vertex Pharmaceuticals, Technology Advisor, and Former CIO at Workday and Amgen agrees, "Validating medical software requires an investment that, quite frankly, exceeds the regulatory requirements that even financial services companies must adhere to. It is also, generally, not an area that is well-understood."

Ensuring that your digital health products and their supporting platforms are compliant means a more seamless path to market and commercial launch. If you don’t pay attention to this up front, you can have huge delays.

"Tight collaboration with not only R&D and Commercial, but also medical affairs, government affairs, regulatory, quality and privacy is important, especially as the digital tools become more sophisticated and move up the regulatory maturity curve," notes Upham.

With that collaboration ensured, there is tremendous opportunity for regulated digital health products to improve patient outcomes and drive efficiencies. Dosing algorithms, patient engagement apps, connected combination products, and software-as-a-medical device are all examples of regulated digital health products that leading biopharma companies are developing. We’re beyond thinking about digital just as a channel for marketing and are seeing game-changing digital health products being built.

Hassan shares a few examples of compelling digital health use cases.

"You can monitor patients in real time through biomarkers. You can actually monitor a patient based on how they feel." Hassan says. "Real-time monitoring enables patients to provide frequent feedback that can be analyzed very quickly. You don't need to wait a year or two to find out if a drug is working or a treatment or disease management program is working. You can learn that much more quickly through digital."

Data collected from connected devices and digital biomarkers, etc. can also be translated into new intellectual property.

Data can be translated into new algorithms that help an organization know something about a patient population or about a disease that its competitors are unlikely to know, because they haven't been collecting the same data or doing the same analytics, explains Upham. "To me, that value can be greater and more meaningful, especially from a long-term competitive advantage perspective."

STEP 4: Take a Strategic Approach with IT and Third-party Vendors

Taking a strategic approach with IT and third-party vendors can significantly accelerate your time to market.

"The pendulum has swung back and forth over the years as to whether life sciences companies want to also build deep software development capabilities. Again and again time has shown that if your company’s core DNA is science and therapies, you shouldn’t try to be a software company. While biopharma IT groups can support customized technology needs in specific areas, it’s not a scalable and sustainable approach," says Goldsmith.

Building, buying and managing systems to support digital health products is a new game for many IT organizations. A big challenge is that many biopharma organizations are finally starting to develop systems and technologies that are not just for internal use, but where patients or prescribers are actually using a company’s digital health products. IT organizations have not historically had this external-facing mindset.

But that external-facing mandate mindset is critical to getting into the digital innovation space.

"Partnerships are going to drive success in this space. Pharma organizations shouldn’t try to be digital experts. They should partner," stresses Hassan.

Partnerships are especially important for biopharma organizations that don’t have adequate digital expertise in-house.

"When you think about digital, and particularly regulated digital innovation, there is a broad set of skills that are required, and biopharma companies typically don’t have that expertise," Patel points out.

"We’ve seen many biopharma and medtech companies fail at trying to homegrow the best infrastructure, ensure it will scale and be compliant around the extensive and changing requirements for regulatory, privacy, security and so forth. You want to find the best partner for that and focus your internal resources on developing differentiating IP around your digital products."

In addition, Kolodin recommends that organizations establish a cross-functional group to best determine what to buy versus what to build, and that they create a culture around digital strategies. Organizations should invest in technologies "that don’t box you in. Interoperability is key."

Easton also reiterates that organizations need a broad, cross-functional team when driving digital: "IT, regulatory and quality stakeholders, and commercial brand owners all need to be involved, since you’ll be driving support towards their brands."

STEP 5: Measure your Success as You Go

It is important to report back to the C-suite and expand your programs as you show results. Reinforce the original success metrics you set forth, e.g. remind the team that app downloads wasn’t the metric that you cared about, but actual improved patient engagement.

The best practice is to get quick wins, Saunders advises. "Get some momentum and you’ll find wind at your back. And then you can take on bigger and more complex projects."

Over-communicate the benefits of digital, Kolodin stresses. "Celebrate the successes. You can convert more champions when people can experience the benefits of digital and data, and remember that different stakeholders are going to be receptive at different times. How and when you approach the laggards versus the early adopters of digital varies. I recommend starting with the early adopters to build more digital champions internally."

Hassan notes that digital-enabled successes don’t necessarily need to be dramatic improvements in outcomes or something similar.

"If an organization is early in bringing digital innovation to their product and service offerings, the metrics are often different," Hassan says. "They're probably not quite as business oriented. They can be about showing success in building capability, showing success in gaining expertise, and showing success in learning."

The bottom line: demonstrate success and progress in advancing your biopharma organization’s digital capabilities.

Leading Firms are Already Ahead in the Race to Digital

It might be tempting for many organizations to want to hunker down in survival mode and wait out the pandemic, especially with the focus on vaccines. But that would be a big mistake. Digital transformation and digital innovation simply can’t wait. If an organization doesn’t act now, it will probably be disrupted by known or unknown competitors.

"Digital is often seen as something that you add at the end, and that’s just not the way you’re going to have clinical impact or commercial impact," Patel stresses. "You want to be thinking of digital from day one."

A biopharma company that understands that and takes an immediate, holistic and strategic approach, and recognizes that digital transformation impacts the entire organization, will emerge from the competition.

Those organizations will quickly find that digital health can play a significant role in expanding data points and sources (including wearables, remote patient monitoring, etc.), improving clinical trials, enabling faster and better identification of adverse events, and bringing therapeutics to market faster.

Most importantly, there’s no doubt that digital health will generate meaningful impact for patients, and can have meaningfully impact on revenue, trials, etc. - if Commercial and R&D can successfully partner. Going forward, biopharma organizations will need to combine digital and clinical innovation to offer the next blockbuster therapy. Quite simply, digital innovation applied on top – and during - drug development will be what differentiates your therapies.

Contributing thought leaders:

Chris Easton
Senior Director, Global Commercial Lead, Personalized Health & Innovation, Innovative Patient Solutions, GPLS, Takeda

Dan Goldsmith
CEO, Tendo Systems, former CEO, Instructure, and former Chief Strategy Officer, Veeva

Fred Hassan
Chairman, The Caret Group, Director, Warburg Pincus LLC, and Board member of Amgen, Precigen, Theramex and Vertice

Dimitriy Kolodin
Vice President of Innovation, AbbVie

Jeffrey Leiden M.D./Ph.D.
Executive Chairman of Vertex Pharmaceuticals, and Advisor, BrightInsight

Diana McKenzie
Board Member, Change Healthcare and Vertex Pharmaceuticals, Technology Advisor, Former CIO at Workday and Amgen, and Advisor, BrightInsight

Kal Patel, M.D.
CEO and Co-Founder, BrightInsight

Brent Saunders
Chairman and Co-Founder, Vesper Healthcare Acquisitions Corp, Former Chairman and CEO at Allergan, Advisor, BrightInsight

Tobias Silberzahn
Partner, McKinsey & Company Inc., Germany

Paul Upham
Head of Smart Devices, Roche/Genentech


By:

David Weldon
Technology Journalist

Jamie Burgess
VP, Marketing, BrightInsight

 


David Weldon is a freelance technology and business writer in the Boston area. Contact him at dweldon646@comcast.net.