Curating the life science data cloud
As lifetime earnings for pharmaceuticals decrease, commercialization expenses increase and payers tighten their belts on reimbursement, life science companies will be faced with shrinking margins over the next few years. In order to maintain basic operating margin levels and continue investing in research and development at current levels, life science manufacturers will be forced to reduce costs by more than $35 billion by 2017, according to results from a new survey of 70 life science organizations from the IMS Institute for Healthcare Informatics.
In order to produce cost savings and keep their businesses operationally efficient in the advent of change, IMS suggests in its new report, “Riding the Information Technology Wave in Life Sciences: Priorities, Pitfalls and Promise,” that the most reasonable approach is to adopt a strategy based on data integration and cloud-based technologies. To preserve operating margins, drug manufacturers need to incorporate new technologies and streamline the transfer and curation of data both internally and externally.
To offset rising expenditures, companies already have begun to reduce their marketing teams, outsource some of their in-house functions and adjust their drug development strategies to focus on specialty medications and therapies associated with smaller patient populations, noted the report. “We believe the large global pharmaceutical companies have more restructuring to undertake to remove costs from their business operations,” noted Murray Aitken, executive director, IMS Institute for Healthcare Informatics. “Further efforts are needed to bring efficiencies to the commercial operations of life sciences companies.”
The authors of the report explained that the best use of the new, more efficiently packaged data housed on the cloud would be to inform future campaigns and improve multichannel marketing operations, track audience engagement and feedback through social media-based applications and patient mobile apps, and run commercial operations applications, such as those used by sales teams. Rather than spend money to produce and store company data, manufacturers could run these company functions through cloud-based applications. In addition, according to IMS, “companies typically experience a minimum of 20% to 30% on operating costs and lower total cost of ownership when moving their infrastructure to the cloud.”
Although pharmaceutical manufacturers have historically been resistant to the uptake of social and mobile applications, the report stated there is a new willingness to shift to the cloud, as cloud companies are improving compliance and becoming more sensitive to HIPAA-related issues. Plus, 74% of respondents reported a high or greater level of need to derive insights and value from data, particularly from specialty patient populations.
The report predicted that cloud-based technologies would contribute to better coordination across departments and would save time that would normally be wasted on data reconciliation, however, there could be some potential risks associated with the use of this technology, including security breaches, the intellectual property issues surrounding ownership of the data and/or the loss of control of the data, the report suggested. In addition, while the report noted that there may be a large cost associated with switching data from a “legacy” system, it does not address the costs associated with training employees on the new technology.
While the report contended “healthcare-specific data models with standardized fields are needed to merge and share patient electronic medical records,” there also could be some instances where companies don’t want to share what they consider to be proprietary data. Some pharmaceutical manufacturers don’t necessarily want competing companies to know which fields they are capturing within their forms, and some clinicians could argue that there is no such thing as a “standard” field in data collection, especially as it relates to complex medications that fall into the specialty or oncology category.
However, IMS’ Aitken predicted the adoption of integrated systems will allow for the “democratization of analysis” and will help manufacturers make assessments and conclusions about the success or relative failure of a drug launch and its marketing activities.
“The healthcare industry is beginning to speak the language of real-world evidence,” Aitken said. “We think this is a significant step forward in helping life science companies not only understand how their products are being used but, more importantly, how they should and can be used to lower costs, as well as achieve improved patient outcomes.”
For the full report, including the charts, click here.
Johnson & Johnson showcases wellness solutions
SCOTTSDALE, Ariz. — Johnson & Johnson on Monday hosted a 30-minute walk-through of the Johnson & Johnson Health & Wellness Experience. Over the course of the presentation, J&J executives showcased a number of consumer and corporate wellness initiatives implemented by J&J, including its Corporate Athlete Program, the 7-Minute Workout app, the Digital Health Scorecard app and the Care4today app.
“What we wanted to do is to make our retail partners aware … of a lot the of J&J offerings and solutions to really help them with their personal health mission,” Patty Reger, J&J director of sales, communication and administration, told Drug Store News.
“These solutions can have a tremendously positive impact on your lives,” said Chris Jordan, director of exercise physiology of the Human Performance Institute, a J&J company.
For example, the Corporate Athlete Program, offered by HPI, helps individuals better manage their energy levels. The course, based upon 30 years of working with elite athletes, helps identify better food choices, including portion control and frequency of consumption, as well as the implementation of a dedicated exercise program.
Designed by Jordan, the 7-Minute Workout app features 36 exercises and 12 additional workouts that can be individually customized and is great for the road warrior, as it requires no additional tools and can be done in a hotel room. Since January, 500,000 users have downloaded the app. “We are literally helping thousands of people participate in regular activity,” Jordan said.
The Digital Health Scorecard app is designed to help users understand their risk of developing a common chronic illness based on answers to seven health questions that generates a personal health risk factor score. The app has been downloaded by 65,000 users across three platforms and would be an ideal tool for practitioners in prompting health discussions in their conversations with patients. It’s much like a credit score in that it’s directional. Depending upon the lifestyle choices a user makes, the score goes up or down. Currently, the average health risk factor score is 73 on a 1-to-100 scale.
Another tool that can be used in conjunction with a patient consultation is the Care4today app, a personal tool to help users keep track of the right doses of medicines administered at the right times. “It has a database of prescription drugs, over-the-counter medications, vitamins and supplements with pictures of the products,” Jordan said.
IMS: Rx spending increases in 2013
Total spending on U.S. medicines increased 1% on a real per capita basis in 2013, while the use of healthcare services rose for the first time in three years, according to a report by the IMS Institute for Healthcare Informatics.
The study, “Medicine Use and Shifting Costs of Healthcare: A Review of the Use of Medicines in the United States in 2013,” found that total dollars spent on medications in the United States reached $329.2 billion last year, up 3.2% on a nominal basis and a rebound from the 1% decline in 2012. Primary drivers include the reduced impact of patent expiries, price increases, higher spending on innovative new medicines and greater use by patients of the healthcare system.
Patent expiries in 2013 contributed $19 billion to lower medicine spending, compared with $29 billion the previous year. Overall utilization of healthcare services grew slightly as consumers returned to the healthcare system — primarily through more office visits to specialist physicians, as well as outpatient treatments — following several years of self-rationing.
“Following several years of decline, 2013 was striking for the increased use by patients of all parts of the U.S. healthcare system — even in advance of full implementation of the Affordable Care Act,” said Murray Aitken, executive director of the IMS Institute for Healthcare Informatics. “Growth in medicine spending remains at historically low levels despite a significant uptick last year, and continues to contribute to the bending of the healthcare cost curve.”
The report’s key findings include:
- An increase in the utilization of healthcare services and medicines. The number of physician office visits, hospitalizations and prescriptions filled all increased in 2013. The number of patient office visits to primary care physicians fell by 0.7% in 2013, while visits to specialists increased by 4.9% overall and by 9.5% for seniors. The number of hospitals visits increased last year, most notably by patients who were commercially insured and received outpatient treatments. Patients filled an average of more than 12 retail prescriptions last year, up nearly 2% year over year. Those ages 65 years and older filled an average of 28 prescriptions annually, down slightly from 2012;
- Spending on medicines. While drug-spending levels have contributed to slower growth in healthcare costs since 2007, nominal spending rose sharply last year. The largest single driver of the 4.2 percentage point shift in spending growth in 2013 was the $10 billion lower impact of patent expiries. Price increases for branded products added $4 billion more in spending growth last year compared with 2012; however, net price growth was essentially flat year over year, reflecting off-invoice discounts and rebates. Overall spending on medicines remained concentrated in traditional small-molecule pills dispensed through retail pharmacies, even as higher growth was seen in biologics and specialty drugs;
- Transformations in disease treatment. Patients gained access to 36 new molecular entities in 2013, including 10 new notable cancer treatments — the most in more than a decade. A total of 27 new oncology drugs have launched in the past three years. Additionally, clusters of innovation are transforming patient care in hepatitis C, multiple sclerosis and diabetes, as well as stroke and acute coronary syndrome. Seventeen orphan drugs — developed for patient populations of fewer than 200,000 individuals — launched in 2013, the most in any year since the passage of the Orphan Drug Act in 1983; and
- Patient payment for health care and medicines. Patients with insurance are incurring higher out-of-pocket costs for healthcare services despite lower co-pays for many prescriptions and additional discounts for preventive medicines. Prescription drug costs paid by most patients are declining, with average out-of-pocket costs of less than $5 for 57% of all retail prescriptions filled. At the same time, 30% of total patient out-of-pocket costs relate to just 2.3% of prescriptions, often high-cost specialty medicines.
To see the full report, including charts, click here.