That Apple ($APPL) watch you are wearing may allow you to text and listen to music, and it can track your activity. But it may also be conducting a postmarket study that will help cut the price of some of your prescription drugs in the future.
A new study from PWC says that drug company pipelines are pumping out some remarkable drugs, but they come with some remarkable prices. At the same time, new personal devices have ways of getting patient data. Payers and providers looking to contain costs are putting together databases of info about their patients and how they respond to certain drugs. And in some cases, the study says, drugmakers concerned about their pushback, are working to link all of this data together and put drug prices into context. Its catchphrase for this is the "new health economy."
Those who are not in any of these new collaborations, need to think about working, not only with payers and providers, but also with tech companies and patient groups to better understand how their drugs work in real life situations, according to the report. That is how they will be able to create the kinds of products that will be winners in the market. "Biopharmaceutical companies cannot afford to sit on the sidelines as patients and health plans negotiate access to their products."
One example it points to is the Accelerating Medicines Partnership (AMP), which has 10 drug companies working with the NIH, the FDA, and 12 patient organizations to investigate and develop new drugs for critical diseases. It has committed $233 million over 5 years to speed work on drugs for Alzheimer's disease, Type 2 diabetes, rheumatoid arthritis and lupus.
As a company-specific example of how this kind of data sharing can work, the report points to a contract between AstraZeneca ($AZN) and Cigna ($CI). The insurer agreed to pay for AstraZeneca's cholesterol lowering drug Crestor, at $200 a month, instead of the $4-a-month generics, for those patients where medical and pharmacy data identified patients at a higher risk for atherosclerosis.
The next step, PWC says, is to begin adding data that patients are willing to provide through the use of personal health devices. It points to a pilot program by PatientsLikeMe and Biogen ($BIIB) to use Fitbits to collect a steady stream of data.
While these are baby steps, the report predicts that drugmakers are looking at a future where they will not be paid so much for specialty drugs themselves as for the results that come from them. To stay competitive, they will need to put the pieces together.
Roger Longman at Real Endpoints says in the study: "The only way the drug industry is going to be able to continue to charge premium prices for specialty products--or any products--is by being able to demonstrate disproportionate value against the competition."
- here's the study (PDF)