Navigating Disruption in the Metapharma Era

MEEFRO March 10, 2023

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While the life sciences industry has traditionally been shaped by large pharmaceutical companies, there are several transformational forces that are shaping the metapharmaera—the next stage of life science market innovation for large and mid-size pharmaceutical and emerging biopharma (EBP) organizations. This is due to the growing segment of EBP companies, a rising innovation start-up ecosystem, big tech’s investments in digital health, and the convergence of life sciences with the healthcare industry for offering holistic personalized care. Each is a transformational force impacting the changing face of the market. At the same time, global pharmaceutical growth is projected to slow down in the next five years. Thus, the question becomes: how do pharma organizations stay ahead of the curve in this ever-changing environment?

REVIEWING THE METAPHARMA ERA

In 2022, global pharmaceutical sales were $1.482 billion (vs. $1.450 billion in 2021), with 63% attributed to larger companies,30% to mid-small-size firms, and 14% to EBP companies.¹The top 15 large pharma companies grew by 9% overall; and when counting the impact of the COVID-19 vaccines, the figures more than double.1Drivers behind this growth are mature brands. In fact, 40% of total pharmaceutical growth is driven by just 25 brands, all of which belong to the top 15 companies.¹Looking at the pipeline, EBP organizations are responsible for approximately 65% of the molecules in the global R&D pipeline, and they are holding onto launching their assets, putting pressure on large pharma companies’ need for innovation, and current dependency onmature brands.²

Pharmaceutical growth has been healthy to date (a 7.3% five-year compound annual growth rate from 2016-2021),³but it’s expected to slow down to 3% to 6% CAGR through 2027 in almost all major markets—with the US market decreasing from 4% to 2% CAGR, while Latin America, Asia-Pacific, Africa, and the Middle East are expected to grow by more than 10%.⁴COVID-19 vaccines and therapeutics will add close to $250 billion globally by 2026.⁵The evidence clearly suggests that the pandemic years were challenging to launch new medicines and devices. Apart from a few exceptions, most new drug launches underperformed when compared to other historic launches. This underperformance has been driven by a combination of three environmental factors: 1) the reduction in available patients as journeys to diagnosis and treatment slowed and became more complex, 2) budgetary challenges on healthcare systems, and 3) the long-term changes to the healthcare professional (HCP) engagement model—which has become more virtual but also with reduced interactive engagement in many countries.

Healthcare practitioners are spending more time online, thus, pharma companies must embrace a hybrid model for engagement. For instance, in a February 2022 webinar, a poll of participants found that 66% of these firms were already embracing the hybrid interaction model and another 22% were piloting it.⁶Implementing a flexible, omnichannel model is what will lead to success.

GOVERNMENT REGULATIONS

To add to the challenges the pharma industry faces, governments are slowly shifting the focus from disease treatment to prevention as better health is inherently less expensive than poor health. In the context of rising costs of healthcare infrastructure, payers will prioritize healthcare delivery efficiencies and rationalize pharmaceutical spending, requesting additional evidence to support claims. In the EU, for example, €210 billion is being spent on the total cost of care with the major drivers of cost consisting of healthcare (excluding medication) at €95 billion, productivity losses at €54 billion, and informal care at €45 billion.⁷Preventative care, earlier diagnostics, and patient empowerment are major drivers to bring these costs down, which also becomes a goal of governments and pharma companies in the metapharma era.

THREE KEY AREAS TO GAIN EDGE

How can pharma organizations stay ahead of the curve in such disrupted times?The answer is taking advantage of three key areas of innovative investment:1)doubling down on digital transformation, 2) adopting artificial intelligence (AI) at a scale, and 3) embracing innovation at the core and not atthe periphery. Doubling down on digital transformation. Adopting digital at scale and predominantly across the patient care pathway is a market mandate, effectively catalyzed by the pandemic. It assisted in minimizing the disruption felt by patients during the pandemic with the offering of new solutions and engagement models.

Digital solutions have become essential for driving innovation in the healthcare sector. Digital therapeutics (DTx) and digital care products that incorporate software to treat, prevent, or manage specific diseases or conditions have been proliferating. There are more than 250 such products, such as DTx, digital diagnostics, and more now identified, including approximately 150 products that are commercially available and the rest are in development. Apps are increasingly focused on health condition management rather than wellness management, with the former now accounting for 47% of all apps in 2020 (up from 28% in 2015) and with mental health, diabetes, and cardiovascular disease-related apps accounting for almost half of disease-specific apps.⁸Enabled by digital technologies, such as medical devices for passive data collection, provider-patient platforms, and selfhelp disease management mobile apps, patient experience becomes key to expanding the value constructs; thereby, moving slowly away from basic drug treatment to holistic patient care.

Digital biomarkers to remotely monitor patient health are being validated by feasibility studies with the intent to incorporate them into clinical trials and patient care. In total, 438 studies have examined 933 distinct biomarkers, with more than half of the trials in neurology, musculoskeletal disorders, and sleep.8Among these are digital biomarkers for neuromuscular disease to track muscular dystrophies and motor neuron diseases. Additionally, sensors and digital biomarkers are being incorporated into the design of clinical trials, enabling decentralized and hybrid trials with home visits, reducing patient and investigator burdens, and accelerating study timelines. Since 2016, the percentage of trials using connected medical device technologies doubled and is now 8%, with 10% of Phase II and III trials now including connected devices.⁸ Hybrid decentralized trials are expected to reduce the number of on-site visits required of patients in Phase II and III trials by 44% to 61%, depending on the therapy area, as visitsshift offsite.⁸There is also the rise of companion digital biomarkers and/or patient engagement apps for holistic treatment delivery. Clinical research organizations and an increasing number of startups are rolling out solutions to match patients directly to clinical trials, offering trials as a care option and, again, revolutionizing the patient experience of matching.

Digital engagement, as this relates to promotional activity, is also impacting patients and healthcare practitioners, although in different manners. Direct-to-consumer (DTC) advertising varies across countries due to regulatory guidance. However, AI embedded in sales and marketing strategies is effective to understand profiles and archetypes of patients and enhance pharmaceutical promotional activity for a patient-centric approach. For healthcare practitioners, the life sciences digital transformation is mostly focused on targeting the right practitioner through the right channel with the right content. Several offerings from small to large agencies are forever changing marketing to hyper-targeted approaches, embedding AI with behavior-changing intelligence for decision-making.

Doubling down on AI across the supply and value chain. AI is driving greater efficiency and providing an edge within the pharmaceutical market. This technology is finding application in a plethora of use cases, such as in drug development, clinical trials, during the drug approval and launch processes, as well as in real-world evidence. While use cases, such as AI in drug discovery and development, are now on the rise to be proven and mature, others are already delivering tangible proof points when employing AI compared to traditional approaches. Nearly eight out of 10 (78%) Phase II protocols and 69% of Phase III protocols have at least one substantial protocol amendment, and they average 2.7 and 3.3 per protocol, respectively.

It’s estimated that pharma and biotech companies spend $7 billion to $8 billion (USD) annually to implement protocol amendments. Previous research showed that 23% of these amendments were considered “completely avoidable” because they were due to protocol design flaws, inconsistencies, and/or errors.⁹We can also predict Phase III trial success with more than 80% accuracy. Using AI has demonstrated that 90% of protocols can be revised to mitigate risks before study start-up. It also helps to speed site identification and results in faster patient recruitment vs. historical benchmarks.

Another case in point is right patient identification with digital diagnostics and supporting HCP productivity. As an example, type 1 diabetes is often misdiagnosed as type 2 diabetes in adulthood, leading to treatment paradigms most characteristic of type 2 diabetes. Approximately, 40% of cases fall into this category.¹¹Up to 10 million people with type 2 diabetes in the US are likely to be receiving treatment for a disease they don’t have. As an example, IQVIA, in collaboration with JDRF, developed an AI solution to identify type 1 diabetes patients most likely to be misdiagnosed and generate the “true type 1 diabetes” population.¹²JDRF is currently planning deployment as a decision support tool for clinicians to aid in greater diagnostic evaluations.

Embracing and accelerating innovation.For large- and mid-sized pharma companies to stay ahead of the curve in the metapharma era, innovation should be embraced more broadly and reflected across applications on innovative mechanisms of action, new trial design, advanced drug delivery, novel reimbursements, and business models. The goal is to cater to patient affordability and health equity, offering the latest innovative solutions to century-old problems.

When it comes to launches, it’s not enough for the product to be innovative. The way it’s launched must be unique, too. In fact, embracing innovation is the only strategy that proved effective for drug launches during the COVID pandemic. Examples of successful launches in the last two years have brought forward some real innovation and disruption. Biohaven, with the migraine treatment Nurtec, addressed the unmet patient need by approaching the patient experience more holistically.¹³For instance, Nurtec combines prophylaxis and acute treatment with a dual action; while at the same time, Biohaven was unusually fast in rolling out its digital-first strategy in the US and had a highly impactful DTC campaign. At the height of the pandemic, the company used novel channels—such as TikTok, social media celebrity ambassadors, and a race car sponsorship—to elevate the solution, which was combined with a strong virtual infrastructure for diagnosis and prescription and an effective affordability campaign.

Novo Nordisk treatment Wegovy focuses on obesity. Innovation is not about breakthrough change with reference to the mechanism of action but also about the simplicity of dosing or patient convenience. Kesimpta, by Novartis, and Phesgo, by Roche, are good examples of improved patient experience and simpler formulations that take the burden off healthcare systems, while Kesimpta also stands out for a strong patient support program.

AI and digital transformation are driving forces behind innovation and successful cases in the metapharma era. This innovation also comes from healthcare startups that challenge the art of possible breakthrough solutions and partner with established pharma organizations to co-create disruptive solutions. With more than $100 billion invested in healthcare startups alone in 2021 and 1,300 global incubators in corporations,14there is no end in sight for how AI, digital reformation, and innovations will continue to push the industry forward.

The life sciences sector is growing, but the increase is projected to slow down while launch challenges, customer engagement, and broad disruption trials continue to persist. Digital transformation and AI technologies deliver tangible proof points on how to rise to these challenges. Embracing innovation is the key ingredient for success in the metapharma era.

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