Since November 15, 2018, with the approval of the Central Committee for Comprehensive Deepening Reform, the state has organized a pilot program for centralized drug procurement. The pilot areas include 11 locations in Beijing, Tianjin, Shanghai, Chongqing, Shenyang, Dalian, Xiamen, Guangzhou, Shenzhen, Chengdu, and Xi’an. City (hereinafter referred to as 4+7 cities). With this news, the entire medical circle, like the Big Bang, set off a terrifying wave. With the national promotion of “purchasing with volume” and the increasing number of varieties and diseases involved, the impact on the entire industry is also increasing. When pharmaceutical and device companies stand at the crossroads of “mass purchase” and “life or death”, how should they choose?
It is imperative for the common people to use economical, safe, and effective drugs in a timely manner, to promote the supply-side structural reform of the pharmaceutical industry, and to realize my country’s leap from a major pharmaceutical country to a powerful pharmaceutical country. This policy accelerates the reshuffle of the industry and guides pharmaceutical equipment companies to the road of R&D and innovation. For the industry, the era of high-margin generic drugs is over, and the manufacturing industry will earn a reasonable profit rate in the future; medical insurance will free up more space to cover patented innovative drugs.
However, the road of innovation and development is not as smooth as we imagined. According to the “Statistical Report on New Drug R&D Efficiency” released by Deloitte in 2018, the return on investment of the world’s top 12 pharmaceutical companies in R&D is only 1.9%, which is the lowest value of the data reported by Deloitte for 9 consecutive years.
Deloitte-Measuring the return from pharmaceutical innovation 2018
For many pharmaceutical companies, it is hard for you to start the research and development of new drugs, and the preparations are complete, but before your new drugs come out, there are already new drugs of the same type on the market that have been approved for marketing. The time gap between domestic and foreign research is further narrowed. The follow-up time point has quietly moved forward from the marketed drugs to phase III, phase II, and even preclinical phases, and the number of competitors has expanded from a few in the past to a dozen or even dozens of local innovative pharmaceutical companies. An example in front of us can be seen, fast follow is experiencing “involution”. PD-1 monoclonal antibody today is very likely to be the tomorrow of fast follow for other targets. If inferred based on the application potential, even a high probability is not as good as PD-1. At the same time, with such a low return on investment, can companies stick to the great vision of “for human health” and a sense of social responsibility, and continue to invest resources to plunge into the boundless black hole of new drug research and development?
So where is the path of innovation and survival for pharmaceutical companies?
“Fortune 500 companies have ups and downs, sometimes companies enter, sometimes companies come out. The probability of being in the Fortune 500 after 30 years is not more than 50%. What kind of company can enter the Fortune 500, and Enduring prosperity for 30 years?——Enterprises must have an ambitious vision, which is the value and ultimate goal of the company’s existence. It can create value, wealth, services and products for mankind and the planet for a long time, and then it can last forever. .”』
Throughout the vision and mission of domestic and foreign pharmaceutical companies, we can read many beautiful and great keywords, “patient-centered”, “for the health of all mankind”, “technology creates a better life”, “guardian of human health” Life blooms”. Looking back on the development history of these century-old pharmaceutical companies, we can also glimpse their way of success, which is to continuously use innovation to implement their corporate vision. On the road of great innovation to realize the better life and health of mankind, they “by the way” achieved great commercial success and accumulated huge wealth.
We also mentioned in “Insights on Digital Therapy (1)” that health is a multidimensional and dynamic concept, a resource that can be relied upon and actively used for personal and social development. The influencing factors of health include biological factors, life behavior factors, environmental factors (including material environment and social environment) and health service factors. These factors affect the health of individuals and groups in a social ecological model that interacts on multiple levels. Among them, the most important factor affecting health is the way of life of the individual.
A large number of medical research results have proved that chronic diseases such as hypertension, diabetes, fatty liver, obesity, and cardiovascular disease have a strong correlation with patients’ lifestyles. These diseases cannot be controlled solely by drugs, but must be changed and avoided. The best results can be achieved by taking medication on the basis of the bad lifestyle.
Drugs are no longer the only measurement standard and intervention method for treating diseases. The medical model has gradually changed from a biomedical model to a health medicine model. The core goal has changed from “treatment as the center” to the establishment of a complete life cycle of health services and health. Management, health education and health promotion system.
All great companies with the vision of “improving human health” should not forget their original aspirations, uphold the mission of innovation in order to achieve their vision, and provide more comprehensive solutions for human health, and should not be limited to “pharmaceuticals” themselves.
In September 2017, a “digital drug” for the treatment of patients with drug use disorders was approved by the FDA, becoming the first prescription digital therapy and a milestone in the field of digital therapy.
Digital therapy: It is to provide evidence-based and verified high-quality software program-driven intervention programs to prevent, manage or treat diseases. Digital therapy can be used alone, in combination with drugs, or in combination with other therapies to improve the health of patients. We can understand it as software plus hardware that validates its effectiveness and safety through clinical trials, or just software products. The development of digital therapy is similar to drug research and development, and it also has the same final effect as the drug, and it can be prescribed as a drug.
We have also seen that some pharmaceutical giants, such as Novartis and Sanofi, have begun to deploy digital therapy in recent years. As a new and effective treatment method, digital therapy, in addition to supplementing existing treatments, can truly realize a “patient-centered” all-round solution based on the traditional business of pharmaceutical companies. Therefore, we believe that embracing the innovative solution of “digital therapy” is the “road to great innovation” for pharmaceutical companies.
Pharmaceutical companies deploy the “value” of digital therapy
The essence of the commercial activities of pharmaceutical companies is to benefit more patients through standardized diagnosis and treatment. A scientific study conducted by our team on medication compliance of 11,505 patients with hypertension in a community health service center in China found that up to 46% of patients gave up medication in the first month. This data is consistent with the guidelines for diagnosis and treatment of hypertension. The requirements are far from each other. Even in the field of cancer with a higher fatality rate and a higher disability rate, the standardized treatment of full dose and full course of treatment has not yet reached the standard. And digital therapy can bring unexpected gains to drug companies in the management of patient compliance. At the same time, digital therapy can be used to bind treatment plans to resist pressure from competing products. For companies that lack pipelines, digital therapy can also be used as a supplement to pipelines to get rid of the single-variety commercial risks.
The “advantages” of pharmaceutical companies’ deployment of digital therapy
According to the “eight-step method” of digital therapy mentioned in “Insights on Digital Therapy (1)”, the research and development process of digital therapy and traditional medicine is highly consistent, and it is believed that the future application and promotion model in the field of therapy will be very similar. Place. Therefore, for traditional pharmaceutical companies, the deployment of digital therapy has natural advantages.
1. Disease Insight
The pipeline layout of the pharmaceutical company itself requires it to conduct in-depth research and exploration of diseases, constantly seek new “targets”, directions, and mechanisms of action, and continue to explore treatment blind spots to solve the diagnosis and treatment problems that have not yet been overcome. The profound understanding and insights into diseases that pharmaceutical companies have accumulated for hundreds of years are also the foundation of digital therapy research and development. They should be born to know which treatment areas are more suitable for the development and application of digital therapy.
2. Clinical trials
Digital therapy must pass clinical verification of effectiveness and safety before it can be approved and registered for marketing. The standardization and systematic management of clinical trials required in the process of clinical verification are the housekeeping skills of pharmaceutical companies. The high-quality historical data accumulated by pharmaceutical companies in drug research and development can be used as a control for digital therapy clinical trials in certain fields, saving a lot of research and development costs.
3. Registration and listing
Pharmaceutical companies have a dedicated registration team in the existing organizational structure, with a mature product registration process and management mechanism. Over the years, it has maintained good interaction and smooth communication channels with the regulatory authorities. Even if the regulatory process and policies of digital therapy are not yet perfect in China, it is believed that no matter what the policy direction is, they will all be the beneficiaries of the near-water building.
4. Commercial operations
In many years of business operations, from the pioneering establishment of a medical information consultant model, to the formation of a complete set of marketing methodology. Pharmaceutical companies have a deep understanding of the Chinese pharmaceutical market. A new product has gone through product pricing, commercial cooperation, bidding and procurement, hospital listing, and clinical promotion from the time it was registered and listed to being prescribed by doctors. Pharmaceutical companies have a systematic approach in every link. This is also destined for pharmaceutical companies to have a solid foundation in the commercialization stage of digital therapy.
In summary, the ability of pharmaceutical companies to accumulate in their main business can better support the layout of the entire industry chain in the field of digital therapy. As possible players, pharmaceutical companies are more likely to stand out from the competition in the blue ocean of digital therapy.
The “disadvantages” of pharmaceutical companies’ deployment of digital therapy
In the process of R&D and operation of digital therapy, the underlying R&D and digital operation capabilities of the product are also required. This is also a huge challenge for pharmaceutical companies to enter the digital therapy market.
1. Low-level logic
In addition to the insight into the disease and the pursuit of treatment effectiveness, the core of digital therapy products has another core logic, which is the research and intervention of patient behavior. Most pharmaceutical companies lack in-depth research in this field. We won’t talk about it here, and there will be topics to continue sharing in the future.
2. Compound talents
In recent years, some pharmaceutical companies have also invested a lot in the digitalization of the industry, but we have also found many problems in this process. The main reason is the lack of compound talents who have a deep understanding of both the medical and digital fields. , Purely technical talents or medical talents with a single background have cognitive gaps in cooperation that lead to communication barriers, and often get a result of 1+1<2, and talents with a single background also have the ability to innovate due to cognitive boundaries and solidification of the knowledge system. Confined by thinking, it is difficult to make greater breakthroughs in cross-border integration and innovation. Only talents with medical and digital experience can better utilize the efficiency improvement and innovative industrial layout brought by digitalization in industrial transformation.
Although compound talents are extremely scarce in the industry, I believe that with the advancement of industry digitization, these two types of problems will be gradually resolved. At this stage, pharmaceutical companies should focus on discovering and digging for such talents in the digital therapy layout.
In the era of change, opportunities and challenges coexist. Pharmaceutical companies are facing dilemmas such as low R&D efficiency and turbulent business environment. How to use its own advantages to transform long-term accumulation into a driving force for innovation and maximize value is an urgent task for every pharmaceutical company. In the era when medical care embraces technology, digital therapy brings a brand new solution to this problem.
On the way of innovation and exploration, each of our individual cognitions are limited, and the boundaries of innovation are unlimited. We look forward to having the opportunity to have in-depth exchanges with colleagues in the industry and learn from each other.