In an interview, Jeremy Haigh talks about the digitalization of the life sciences industry and explains what constitutes a good location for research and development work.
Jeremy Haigh: Although healthcare payers and providers may benefit more quickly from the adoption of digital technologies, there’s a broad range of near-term R&D opportunities in both discovery and development. For example, the identification of new drug targets, image analysis and phenotypic screening of drug candidates, repurposing of existing molecules for new disease areas and the use of AI to improve safety signal detection for managing pharmacovigilance and regulatory reporting. Improvements in the speed and accuracy of patient identification and site selection should have a positive impact on development costs.
Martin Rohrbach: From a technical point of view, it seems that almost anything is already possible or will be in a few years. But in order to reap the real value of the digital revolution, its full potential needs to be embraced. This in turn requires answering certain fundamental questions on data security, data privacy and regulators’ processes beforehand.
Haigh: I think the conventional model of R&D in the pharmaceutical industry is already under pressure as ROI falls and vertical integration is harder to sustain. We’ve already seen large companies outsourcing core capabilities, trying to de-risk their portfolios and develop a more efficient and predictable process. The consequence is much greater reliance on network activity. You will see a lot more partnerships and collaborations, more interdependencies between big and small companies. The importance of digital partnerships will also increase. All companies will have to think about digital approaches from the very start and not, as currently, merely an add-on or afterthought to their existing processes. Digitization will significantly change the way in which R&D is convened in the commercial environment.
Rohrbach: Speaking of re-thinking processes: what I expect is a move to a more data-driven process overall. So, data processing and analyzing skills will be essential in the R&D function. Those skills might even become as or even more important as pure medical aspects.
Rohrbach: The greatest challenge I see is the human capability to deal with data. What I mean is: asking the right questions and thereafter reaching the right conclusions. Are we able to decide which data to use for which purpose? Are we able to read and interpret the data accurately? Nowadays you see more and more algorithms predicting outcomes. As these algorithms are set up by human beings, they tend to be biased. Let me give you an example: I’m buying a DNA test online. As of that instant I receive emails and pop-up ads for DNA tests. But: how likely is it that I will buy a second one? These are key questions and decisions that still require a lot of human judgment and cannot be digitalized completely.
Haigh: Digital adoption also brings with it some inherent risks, especially the issue of trust. We are enormously dependent on data integrity and governance particularly, but not exclusively, with respect to the privacy and security of patient data. Regulation and harmonization of data collection and curation is crucial but not yet assured. Regulatory authorities are quite conservative and will need a period of time to get used to the inclusion of digital/in silico data in regulatory submissions alongside conventional animal and human data. Payers and patients will demand transparency, and the proper integration of such methods in the R&D environment. I don’t think the solution is obvious but rather a process that we need to go through step by step, advocating a more flexible approach to R&D.
Haigh: First: Easy access to key talent. I think people are rather less mobile than they used to be, so you need to be in a location with a strong indigenous workforce or one where you can very easily attract and retain the necessary breadth and depth of talent.
Second: Networks are increasingly important. It’s very helpful being in a hub location, surrounded by like-minded people and companies. It enables cross-fertilization of ideas and ambitions. These things are hugely important given the interdependencies I mentioned earlier.
Rohrbach: I would add access to a network of education facilities and a welcoming research environment in terms of laws and regulation.
Haigh: Changing demographics will drive significant investment in some countries as preferred R&D locations. China would be an obvious example - it’s hard to ignore a huge commercial market as well as a very large indigenous talent base; these are factors that influence investment decisions.
Rohrbach: We also see China as a key challenger of the established hubs due to its regulatory improvements and its market size.
Haigh: Countries which historically have hosted little R&D activity may become more important due to the scale of their populations and healthcare needs. Governments understand these dynamics and will certainly support such decisions with tax incentives and other inducements, potentially affecting R&D investment in some established territories. Life sciences R&D is an attractive and durable opportunity.
Rohrbach: The emergence of new hubs should definitely not be underestimated. The world is changing rapidly in terms of what and how challenges are addressed. This will also impact what will be developed where.
Haigh: The impact of Brexit is hard to predict, which is why so many people are trying! There will obviously be regulatory implications with the movement of the EMA to Amsterdam, and the potential loss of a single European marketing authorization effective in the UK which might slow market access. The UK has become reliant on a common regulatory process and despite the undoubted strength of the MHRA there is much speculation about what should take the place of such a coalition. There is also an issue for the labor market: life sciences thrive on cross-border interactions and limitations on this will have significant consequences for the competency of the UK workforce, the attractiveness of the UK for top talent in the sector, and the breadth of training opportunities for aspiring scientists. Investment may also suffer if the UK loses access to EU funds such as Horizon 2020 and ceases to be regarded as the logical platform for accessing Europe by other investing nations. In a world increasingly dependent on collaboration and partnership, isolation in any form becomes a challenge if left unaddressed.
Haigh: Besides the obvious increase in investment into diseases of the elderly, an aging population sees the conversion of previously terminal conditions into chronic indications requiring continuous management. While good for the individual patient, this has an enormous financial and societal impact, and we are beginning to see the consequences on healthcare delivery and drug development, both of which are unsustainable in their current forms. We need to ensure quicker, cheaper and more predictable drug discovery that maintains a focus on novelty, resets our expectations of benefit and risk, and reflects a sector which is payer led and patient centered. From an R&D perspective this demands quite radical changes – the normal process of evolution won’t be sufficient; disruption is necessary and digital solutions are likely to provide it.
Rohrbach: Life expectancy has increased significantly in many countries around the world. At the same time, the years that one lives in good health have not increased at the same rate. Recent studies show, there is an urgent demand for new treatments and medicine in parts where we do not have a focus today. Look at Alzheimer’s for example. Research has been extensive but no major breakthrough has been made so far. This is a huge challenge and extremely complex. We still understand very little when it comes to this prevalent disease.
<p>© 2018 KPMG Holding AG is a member of the KPMG network of independent firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss legal entity. All rights reserved.</p> <p>KPMG International Cooperative (“KPMG International”) is 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.</p>