Retaining Value Learning and Future Insights throughout the Value Chain
February 17, 2015
Integration across multiple elements of the biopharma industry value chain should be a core aim for most service provider organizations who wish to differentiate their business and build a ‘higher barrier to entry’ service portfolio (as discussed here). Of course while it is possible to articulate the value of doing this, most large biopharma organizations are just not set up to procure services this way, particularly in the late stage clinical and commercial environment, because of the decentralized local affiliate model and also because of silos within other therapeutic or functional groups.
However, with the need to control healthcare system expenditure becoming ever more acute and consequently the need to show true ‘product value’ in terms of real world outcomes more critical than ever, it is unlikely that this model will remain sustainable.
Introducing a new molecule into a healthcare environment with heterogeneous treatment pathways and variable outcomes, coupled with the need to recruit and retain patients ‘on therapy’ to show clinical benefits, means that biopharmaceutical companies must adopt a far more altruistic approach to tackling unmet need. How does a biopharmaceutical company help build an evidence base to facilitate ‘best practice’ and ‘best outcome’ treatment pathways in the local healthcare system and therefore pave the way for new product introductions to show further incremental value? How do biopharmaceutical companies break the siloed approach so that patient management models can be built based on awareness of what outcome data to gather at a regional or sub regional level and how to leverage it with payers /providers to accelerate adoption.
Third-party service providers can be that neutral broker between the industry and the healthcare system facilitating change at a local level. They can design integrated commercial operations models to link patient management with real world outcomes far more easily and without the organizational inertia or cultural baggage of large biopharmaceutical companies. They can create an environment in which biopharma can incubate and pilot these models prior to scaling and adoption.
Horizontal integration is not an option but a necessity in today’s developing integrated healthcare system environment, but nevertheless still an aspiration, a ‘work in progress’. For biopharmaceutical companies the problem remains the same, how to ensure that value, learning and future insights are not eroded at the many transition points in the value chain between internal units and particularly when third party service companies are involved. How does a biopharmaceutical company integrate horizontally and partner with specialist service organizations to improve the probability of success? The short answer is by creating new organizational layers; market based resources and strategic partnerships; cross functional teams and models that operate at key value chain transition points bringing multi-stakeholder value metrics and insights to bear on asset development and commercialization.
In order to do this however the procurement of services must change, current categorizations of service company must be re-defined based on delivered value within a healthcare system rather than delivered service in a location. This inevitably means a stronger role for global procurement teams working more closely with local procurement teams in order to benefit from this ‘added value’ across multiple geographies or healthcare system archetypes and ultimately increase the probability of success.