Life sciences companies are at risk of losing market share if they don’t create new consumer-focused business models.
The warning comes from the latest EY report Progressions 2018, Life Sciences 4.0: Securing value through data-driven platforms.
The report mentions that over 75% of life sciences organisations currently included in the Fortune 500 are at risk of falling out of this ranking by 2023. Companies should be looking beyond novel devices to provide data-driven health services that are convenient and consumer-focused, the report states.
Speaking to leaders in the life sciences industry, EY analysed patents submitted by technology companies and looked at over 150 digitally focused partnerships between life sciences companies and other stakeholders.
Emerging technology companies are highlighted as direct competitors to the life sciences industry. Many of these companies are moving away from cloud-based storage and fitness products and are now looking at disease management.
The report states that three of the largest technology companies have filed more that 300 healthcare patents since 2013. This represents a 38% increase in the number of health-related patents filed by these companies every two years.
Pamela Spence, EY Global Life Sciences Industry leader, said:
“The rapid emergence of technology companies in the life sciences space, coupled with changing expectations by consumers is creating a disruptive shift toward a more participatory health system, where consumers are defining value in terms of the ability to deliver affordable, personalized health outcomes that advance lifelong health goals. To seize the upside of disruption in this transformative age, life sciences companies must look beyond novel drugs and devices and invest, participate in or build platforms of care. Harnessing platforms of care will help life sciences companies to collect and structure real-world data and create new – or enhance existing – products and services.”
The report also highlights the importance of platforms of care, which collect and share health data in real-time. Since 2014, life sciences companies have signed nearly 90 digitally focused deals. Of those with a clear therapeutic area focus, 50% of them involved platform capabilities in the diabetes or respiratory areas, while 14% involved products or services to support cancer patients.
Spence says: “These investments are important but don’t go far enough to eradicate the risks. Further investments need to make sure that connective technologies are placed at the heart of any offerings. Success in this new market paradigm requires the adoption of flexible, platform-based business models that allow life sciences companies to deliver affordable, improved health outcomes and unlock the power of diverse data streams that reside outside the traditional health ecosystem.”
“Consumers are at the centre of this new market paradigm and they are demanding better data experiences from life sciences companies. If life sciences companies can leverage platforms to combine their deep scientific and clinical proprietary data with environmental, behavioural and financial insights, they can position themselves to capture maximum future value in the market.” Spence concluded.