Progressions 2014

The pace of change

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Things have changed dramatically in just a few years.

It has been four years since the release of Progressions 2010: Pharma 3.0, our first report on the move to outcomes-focused health care systems. A lot has happened since then. The world we envisioned — empowered by changing incentives, an explosion of big data and the rapid rise of new technologies — is swiftly becoming real on many fronts.

  • The ways in which health care is delivered and paid for have changed rapidly over the last five years. Significant reforms are under way in major markets. Disruptive entrants and initiatives are emerging with novel approaches in data analytics, personalized medicine and patient-empowering, information-leveraging (PI) technologies. The movement toward transparency is accelerating.
  • For pharma companies, these trends are potentially disruptive. Companies could consider a range of potential responses — from developing value dossiers to support their products at one end of the spectrum to even moving into health care delivery at the other.
  • Despite the scale of disruption, pharma companies’ responses have so far mostly been in the form of ad hoc experimentation. Instead of reactive and fragmented experimentation, companies now need a coordinated, strategic approach.
  • While pharma companies may not feel much urgency to act because net margins in the traditional drug business have not yet shrunk significantly, wait-and-see may not be the best option. Early-mover advantages — for instance, from network effects and switching costs — will make it harder to enter the market later.

EY – major changes in the healthcare industry

EY – major changes in the healthcare industry