Decoding the Value of Big Data in the Pharmaceutical Industry
The operating environment in the US pharmaceutical industry has become grimmer amidst losses on account of expiring patents, tighter government regulations, and the rising demand for low-cost generic drugs.
Compounding the competitiveness are growing concerns around dwindling R&D productivity in the US pharmaceutical industry, which has led to the rising cost of innovation. Pharmaceutical companies are spending a fortune to create new drugs and get them out of research labs and into the marketplace. A recent Forbes article pegged the estimated median cost of R&D to get a new drug through the FDA approval process to be $4.2 billion for companies that have more than 3 drugs in the market and $351 million for a company with only one drug on the market.
According to a PricewaterhouseCoopers (PWC) study, in 2007 the US Food and Drug Administration approved only 19 new molecular entities and biologics - a smaller number than at any time since 1983. The need for companies in the pharmaceutical industry to reinvent themselves in the light of these challenges couldn’t be stronger. A new report titled The Global Use of Medicines: Outlook through 2017, released by IMS Health, a global healthcare intelligence company, shows some tell-tale signs of this much anticipated resurgence. According to the IMS Health Study forecast, global spending on medicines is expected to reach the threshold of $1 trillion in 2014 and $1.2 trillion by 2017.
In order to foster innovation at sustainable rates, pharmaceutical companies will be forced to find new ways to drive innovative R&D by using big data and analytics to drive decision-making. McKinsey estimates that big data strategies could drive up to $100 billion annually across the health care system by making research trials more efficient and creating new tools that health care professionals and consumers can use to manage an individual’s health and well-being.
Today, data is available in abundance from several information collection points such as caregivers, physicians, patients, universities, insurance companies, researchers, and pharmacists. This historical information is helping pharmaceutical companies cut the staggering costs of R&D and make informed choices in the process. This helps pharmaceutical companies improve the success rate associated with drug launches and gain unprecedented speed to market advantages.
Clinical trial efficiency is also poised to improve in the light of breakthrough big data technology. Trials can be monitored in real-time to arrest deviations that are in conflict with set goals or come in violation of constantly changing safety guidelines, thereby preventing cost related issues.
In the light of the tremendous potential of big data, many big pharma companies have broken the shackles when it comes to sharing of clinical data and are collaborating with each other to find cure to big diseases.
Interested in hearing more on the subject? See the video below from this year’s Forbes Healthcare Summit 2013 for an interview with GlaxoSmithKline CEO Sir Andrew Witty titled “Big Pharma Collaborating on Big Data to Save the World.”