Conclusion

Conclusion

Global healthcare systems are evolving to deliver better patient outcomes at lower costs. This shift to paying for outcomes rather than units or episodes raises new challenges for the life sciences industry. We believe that by transforming their approach from the traditional supplier role to one of a solution provider through multiple partnerships with key stakeholders, life sciences companies can deliver sustainable long-term value to payers and patients alike and will drive superior returns for shareholders.

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Conclusion - More than medicine

Existing corporate structures aligned with the old-world product supplier model will be difficult to change, especially as, in the short term, there is likely to be a divergence of strategy required to deal with the volume growth of demand in the emerging markets as well as the low-growth reality of today’s developed economies.

Hard questions need to be asked about how the industry will transform to deliver value in the healthcare systems of the future.

We see an opportunity for the establishment of new business units focused on professional services. These new clinical professional services units would collate external solution requirements, integrate internal pharma products with external partnered diagnostics, provider services, patient biometric input and compliance incentives and payer delivery models and services. This proprietary solutions-based approach could drive increased brand value, higher margins and improved business performance.

Hard questions need to be asked about what products are being developed by R&D and how these products will be positioned to deliver value in new healthcare systems. In today’s environment, having an effective product appropriately priced to gain reimbursement may not be enough. Companies need to go one step further: is there also an effective service model to consider in which the new molecule can be used? Bold decisions will need to be made about clinical development programs to ensure that the latest hot compound is compared with the best new marketed competitor, and not simply the standard of care. The earlier the indications that no significant advantages are realized, the more R&D dollars can be reinvested elsewhere.

As always the customer is king, but the kingdoms are changing fast. Corporate cultures should demand that ‘know your customer’ be a central message for every general manager in every country.

The industry has to change: the new healthcare environment demands a fresh approach.

© 2017 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.

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