Precision medicine holds tremendous potential to remake the healthcare industry. By applying a deeper understanding of diseases with richer patient data and advanced analytics, precision medicine can help physicians tailor medicines to the needs of individual patients, rather than by broader populations, leading to better outcomes at potentially lower costs.
Our survey of global leaders in the pharmaceuticals industry shows that companies are aware of the promise: 92 percent have identified precision medicine as an opportunity, and 84 percent have it on their corporate agenda. Most point to clear advantages in drug development, such as reducing time-to-market and making R&D processes more efficient. Even a conservative estimate puts the cost savings in drug development at 17 percent, leading to a potential annual savings of US$26 billion for the industry worldwide.
Despite this bottom-line impact, however, most companies have yet to harness the full potential of precision medicine. External barriers include insufficient access to high-quality data, an unclear regulatory framework, a lack of standards, and data privacy issues. Internally, many companies lack the capabilities — particularly regarding the generation, integration, and analysis of non-trial-related patient data — that precision medicine requires.
These are not easy issues, yet pharmaceutical companies must begin to address them today. Rather than waiting for regulations and data standards to emerge, companies should actively work with regulators and policymakers to jointly develop standards. Internally, most companies will need to partner with existing players and new market entrants that specialize in data, or possibly hire external experts. Either approach will require a new operating model and organizational culture — one that is more agile and responsive to changes.
Precision medicine will transform the entire pharmaceutical value chain, from early development to companies’ go-to-market models, and the next five years will be a crucial window for pharmaceutical companies to capitalize on this promise. Companies simply cannot sit on the sidelines during this period. Instead, they need to take risks and more actively engage with stakeholders throughout the healthcare ecosystem.
How can pharmaceutical companies forge the right partnerships? First, companies must ask themselves, “What gaps in capabilities do we need to fill?” A clear analysis of the company’s existing capabilities is an essential first step, before making a determination as to who or what might fill the gaps.
Second, companies must decide which partners are most appropriate to fill those gaps. Because they have limited experience in this new data field, companies will need to understand the landscape before they decide on specific external partners or experts to work with. To be clear, all risks will remain with the pharmaceutical player; regulators will not allow the risk to be transferred elsewhere — all the more reason to ensure the quality of the candidates.
Once a suitable partner (or partners) has been found, the next issue is establishing the right engagement model. Companies will need to trust both their new business partners and the new technologies at the same time, and that will be a tall order. It will require a significant cultural overhaul, particularly given that development cycles in technology are often measured in mere weeks or months. Companies will have to transform their organizational culture and embrace a more agile startup mentality. Among our survey respondents, 72 percent agreed that the right culture in the organization was vital, but only 14 percent said their company had sufficiently transformed its culture to meet the challenges of precision medicine. (More distressing, 39 percent said their company either had not yet started a cultural transformation or had no plans for one.)
We expect the next five years to be crucial in establishing the playing field for precision medicine, the rules of the game, and who the competitors are. Accordingly, pharmaceutical companies need to begin taking action today. Among other imperatives, that means engaging and collaborating with key stakeholders as follows:
In sum, precision medicine represents not only a business opportunity but also a clinical opportunity. At a time of greater healthcare challenges, it is a clear means of using emerging technologies to deliver better care to patients. That, in essence, is the responsibility of pharmaceutical leaders. As one respondent in our survey put it, “Precision medicine will happen, and it’s better to be one of the shapers than a follower. Pioneering and taking risks to get on the train may afford greater opportunities than resistance or avoidance.” In other words, pharmaceutical companies can seize this opportunity — or ignore it and watch their competitors pass them by.