The Future of Personalized Medicine Hinges on Revolutionizing Business Models
The era of big pharma as product-first companies must end, as services become the larger priority.
Every day, new advancements are being made in the development of personalized medicines. Just recently, the FDA approved a gene editing therapy for treating sickle cell.1 Since 2020, personalized medicines have made up more than a third of new molecular entities approved by the FDA.2 And new discoveries are showing how promising the future of this field can be—like a gene therapy that has allowed an 11-year-old boy to hear for the first time.3
All sorts of developments in the field lie ahead. In fact, Mark Melton, vice president of the clinical trial execution platform Slope, predicts that, “2024 will be a breakout year for precision medicine.”4
For pharmaceutical companies, this is about much more than new forms of medicine. It’s about a fundamental shift in their role in the healthcare space. Today’s pharma executives will need to lead a transformation, turning their companies into service providers first, and product providers second. It’s a whole new business model, striking at the heart of how big pharma operates, how it helps to save lives, and how the sector makes money.
The waning patent cycle
For decades, pharma companies have focused on building single solutions for the masses, being first with a new drug or vaccine that can be prescribed to millions of people. It’s known as a “one size fits all” approach.5
This system has run on a patent cycle.6 With each new medicine available, they’ve been able to make money for years before generics are available. This fuels their operations as they discover and bring to market the next drugs.
Most personalized medicines are not patentable in the same ways. In much shorter blocks of time, healthcare professionals will have multiple options for companies to work with in ordering these therapies. But these same healthcare professionals also have new needs, which pharma companies can (and must) fulfill. Rather than products, these needs are primarily services.
Technology and customer experience
Personalized medicines don’t fit in neatly with many established medical practices. To determine which patients may benefit from which newly available therapies, healthcare providers need a whole new technological apparatus. The same goes for ordering personalized medicines and tracking their arrival to the facilities.
And that's only the beginning. Many hospitals, doctor’s offices, and medical centers need to undergo construction in order to administer certain therapies. For example, they need ways to monitor patients after they receive certain treatments—and as more and more patients become eligible to receive them, existing facilities won’t be able to handle them all. And some therapies involve exposure to radiation7, so special infrastructure is needed to keep patients and staff safe.
On top of all this, doctors, nurses, and others who work in healthcare settings need new training in order to understand everything it takes to deliver new and emerging personalized therapies to patients.
Pharma companies must help to provide all this. The ones that do a better job on all these fronts will be the winners. More and more medical facilities, from large hospital chains to individual medical practices, will choose to work with them.
Reorganizations needed
To do all this, pharmaceutical companies need to undergo internal reorganizations, building out new departments. They need robust operations focused on building user friendly technologies for healthcare professionals. And they need around-the-clock, top-notch customer service operations that can help these professionals with any challenges they face in delivering personalized medicines.
Traditionally, pharma has relied heavily on external providers to handle the logistics of distribution, and they have had relatively few touchpoints directly with customers. Now, they need to build all that capability internally. This means restructuring, as well as acquiring startups or scale-ups8 that already have these specialties and integrating them into the company.
The newly designed departments also need to cooperate heavily on a daily basis, which means ending silos9 that have long slowed operations and innovation in the pharma sector. A new culture of cooperation must take root, speeding up decision making and other internal processes.
It may seem overwhelming, but it can be done. Pharmaceutical executives know how to be agile and creative in order to meet the new needs of the population. Driven by a desire to save lives, improve people’s health and reward financial stakeholders, they can take on the role of change makers.
Through our work with companies in this sector, we see the tremendous opportunities ahead. When pharmaceutical companies provide the services that will allow healthcare professionals to get personalized medicines to patients, everyone will benefit.
Kostja Paschalidis is service design lead and Estelle Ricoux is director of product and strategy for Europe; both at Beyond
References
- F.D.A. Approves 2 Sickle Cell Treatments, One Using CRISPR Gene Editing. The New York Times. December 8, 2023. Accessed January 31, 2024. https://www.nytimes.com/2023/12/08/health/fda-sickle-cell-crispr.html
- Personalized medicines among FDA approved new molecular entities 2022. Statista. Accessed January 31, 2024. https://www.statista.com/statistics/688428/personalized-medicines-as-share-of-new-molecular-entities/
- Gene Therapy Allows an 11-Year-Old Boy to Hear for the First Time. January 23, 2024. Accessed January 31, 2024. https://www.nytimes.com/2024/01/23/health/deaf-gene-therapy.html
- Precision Medicine’s Breakout Year: 2024 Trends. Pharmaceutical Executive. January 16, 2024. Accessed January 31, 2024. https://www.pharmexec.com/view/precision-medicine-breakout-year-2024-trends
- National Human Genome Research Institute. Accessed January 31, 2024. https://www.genome.gov/genetics-glossary/Personalized-Medicine
- Health care in 2020: Key Themes. J.P. Morgan Research. Accessed January 31, 2024. https://www.jpmorgan.com/insights/global-research/current-events/health-care-2020-election
- Editorial: Nuclear Medicine in the Context of Personalized Medicine. PubMed Central. Accessed January 31, 2024. https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7296094/
- The Difference Between Startup and Scale-Up Companies (and Why it Matters). Techpoint. Accessed January 31, 2024. https://techpoint.org/startups-and-scale-ups/
- Breaking Down Silos in Biopharma Using Agile. Boston Consulting Group. Accessed January 31, 2024. https://www.bcg.com/publications/2019/using-agile-break-down-silos-biopharma
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