Think different? Pharma turns to tech partnerships for beyond-the-pill moves

Beyond the pill. It's a catchphrase that cropped up a few years ago, when pharma's patent-cliff suffering was intense, drug development lagged and, facing budget constraints, payers in various countries were putting the screws to pharma prices. The idea was--and is--that drugmakers would need to move beyond pushing products to delivering outcomes.

There's not going to be a beyond-the-pill revolution in 2016. Frankly, pharma doesn't yet have the technology to upend the status quo. But drugmakers are teaming up with major technology players like Google ($GOOG) and IBM Watson Health--Novartis ($NVS), Sanofi ($SNY) and Novo Nordisk ($NVO) among them--in deals that marry Big Data record-sifting with cutting-edge patient-monitoring gadgetry, and that's the kind of infrastructure necessary for big moves beyond the pill.

For instance, some drugmakers have been pushing new performance-based pricing deals with payers. Novartis, for instance, wants to strike deals on its heart failure drug Entresto, which reduced hospital visits for patients in clinical trials. Hospital visits are costly. So, Novartis wants to be paid more if Entresto keeps patients out of the hospital, and less if it fails to do so. That sort of payer deal requires a combination of patient-tracking tech and data analytics.

Amgen ($AMGN) pulled off an outcomes-based arrangement on its $14,100 cholesterol-fighter Repatha. The drugmaker and Harvard Pilgrim Health Systems agreed on LDL cholesterol targets for various patient groups, and if Repatha doesn't help patients hit those goals, the insurer collects bigger rebates. More rebates are due if Harvard Pilgrim's spending on the drug surpasses an agreed-upon threshold.

Novartis CEO Joe Jimenez

"The basic infrastructure of electronic medical records, let's call it 'real-world data', is going to have to increase so that we can easily track and monitor outcomes," Novartis chief Joe Jimenez told the news service. "If you move to that kind of pricing system over a period of years, you will be able to take out a lot of waste."

Expect more technology-oriented team-ups in 2016 as drugmakers bring new monitoring technology into clinical trials--and later, into the real world. Biogen ($BIIB) used fitness trackers in a trial with multiple sclerosis patients, monitoring patients' movements as a way to gauge the results from its treatments. AstraZeneca ($AZN) and GlaxoSmithKline ($GSK) have signed onto "smart" inhalers that track dosing and trigger reminders to help patients follow their prescribed regimens. The inhalers will first be used in trials, but there are obvious real-world advantages.

Likewise, Novartis' "Trials of the Future" initiative with with Qualcomm ($QCOM) brings biometric data from a variety of sensors into clinical trials. Its first test was in patients with COPD, and the mission--so far--is to improve the quality and speed of trial-data collection, getting away from logging errors and self-reporting. But the technology could move out of the trial setting to fuel outcomes-based approaches.

Pharma has realized that if it doesn't hook up with giants like Google, Apple ($AAPL), IBM ($IBM) and others, those companies will innovate right past drugmakers. Turf that pharma might otherwise claim would be ceded to the tech industry. With the pace of tech developments ramping up, pharma's work will, too.

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