But how will this step change affect the way healthcare is provided as a whole? The answer: ubiquitous transformation. Doctors and caregivers will be compelled to redefine the scope of their responsibilities. Regulators will need to develop new outlines for this new influx of digital health solutions and data sharing. And finally, payers will need to accommodate new varieties and methods of spending.
Did we budget for this?
These considerable (imminent) changes to healthcare provision are accompanied by a seismic shift in the way budgets will be spent. Gone will be the days of focusing solely on treatment and care. Instead prevention, diagnostics and digital solutions will take centre stage. Digital is key: mobile apps, smart monitoring devices, and AI-powered analytics tools will revolutionize the way healthcare is done. And the numbers reiterate this. Some surveys put healthcare budget rises over the next decade at nearly 42%.
Technology will take the lead
The status quo is set to change further, for it will be tech companies that are set to spearhead the push to this new mode of healthcare, not the current biopharma behemoths. And research reveals that biopharma is fully aware of tech’s role in propagating these trends, while regulators are acknowledged as the gatekeepers that could slow things down. But why will tech be the protagonist? – due to their skills leveraging data and analytics.
Furthermore, big tech is already active in the prevention and diagnostics domains, having both initiated its own healthcare product developments and filed a rising number of patents in this very industry over the last few years. Meanwhile, big tech is encroaching on biopharma’s typical treatment domain via acquisitions and partnerships.
Not so cut and dried
This new paradigm will likely present a sizeable obstacle for biopharma businesses and has the potential to build a future comprising lower margins. If operating costs per patient remain stable, biopharma companies could see their operating margins drop by up to eight per cent, or even be erased completely.
However, it’s not all doom and gloom. While there are headwinds, there are also strong opportunities for biopharma – if it is willing to transition towards novel revenue streams. These include diagnostics, prevention, and digital health solutions. This means the onus lies with pharma enterprises to reenvisage healthcare’s future. There are three ways they can do this: seek out more efficiency; shift into new growth areas like personalized and preventative medicines and digital medicines; the third option is to embark on both.
The numbers foretell a bright future:
What is encouraging is that biopharma businesses appear fully aware that this new paradigm is encroaching rapidly:
- A resounding 96% are either fully or partially in consensus that healthcare’s future will be people-powered, preventive, digital, personalized, instilled into everyday life, and facilitated by novel organizational, regulatory and business models;
- A solid 68% believe this will represent “business as usual” in large healthcare markets within the next ten years;
- 75% regard healthcare’s future as a biopharma opportunity – contingent upon the industry being open to self-disruption;
- As many as 85% of biopharma enterprises state they have some of or all the core components of the future of healthcare on their business roadmap;
- However, only 25% are tackling this issue in a rounded manner.
To conclude, while acquiring these insights is a fundamental part of long-term corporate planning, time is scarce for biopharma enterprises to lay out a definitive strategy to create and seize new revenue streams whilst managing the obstacles created by a rapidly evolving healthcare paradigm. It’s safe to surmise that it is better to embrace and leverage the disruption once it arrives, rather than shirk it altogether and risk inevitable extinction.