As I re-familiarize myself with the LS/Pharma industry – specifically the use of Analytics for LS/Pharma, I’d like to share some assets that I’ve come across with you (for your pleasure reading and curiosities if you haven’t seen them already). I’ll summarize these findings/key stats for the ease of consumption.

Basis: See attached Analytics in Pharma and Life Sciences – Everest Research Group

Key Drivers for Analytics in Pharma/Life Sciences Industry

    • Compliance
      • Evolving stringent regulatory environment
        • Introduction of PPACA and PPSA, directly imposing changes in reimbursement mechanism and transparency.
        • Dr. Daemmrich (HBS) has a good paper on the impact of such policies on the Pharma Industry.
      • Rising cost of compliance
        • CMS estimates that the cost of compliance for the Sunshine Act (under PPACA) would be US$269 million, with subsequent years costing US$180 million to the broader pharma and life sciences industry.
      •  Significant risk of non-compliance
        • Timely and accurate reporting is critical for the Sunshine Act, as non-compliance penalties range from US$10,000 for each payment not reported (subject to a maximum of US$150,000) to US$100,000 for knowingly withholding information (capped at US$1 million).
    • R&D Productivity
      • Rising R&D expenditures
        • The crisis of R&D is highlighted in a new report by the Tufts Center for the Study of Drug Development. Back in 2003, the Tufts team estimated that the cost to research and develop a new drug was $802 million (in 2000 dollars). In 2013 dollars, that would be $1,044 million.
      • Falling FDA approvals
        • Source: Nature Biotechnology
        • The global life sciences sector’s general decline in R&D productivity is a frequent topic of conversation among industry stakeholders, investors, and analysts. Total projected value of late-stage pipelines for the 12 largest pharmaceutical companies showed a decline from $1,369 billion to $913 billion in 2013.
      • Static/Deteriorating health outcomes
        • Adverse event reports to the FDA increased at 4% CAGR from 2003 to 2011.
        • Serious/Death outcomes increased at 16% CAGR from 2003 to 2011.
    • Value Chain Digitalization
      • Increasing cloud-based services and mobility solutions
      • Proliferation of social media
        • Proliferation of media in general, and social media in particular, is increasing the public scrutiny on the industry.
        • Examples include: Patients Like Me; Treato
      • Innovative and customized delivery
    • Profitable Growth

One thought on “The Case for Analytics in Pharma/Life Sciences Industry

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