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Future of Health: How to transform BioPharma for the upcoming LIFEcare system

Future of Health
Dr. Thomas Solbac & Patrick Grünewald

Challenging the way we think, manage, and deliver health has been the engine that drives meaningful healthcare innovation. As a result of the technological, regulatory, and socioeconomic disruption, healthcare systems and the pharmaceutical industry have undergone tremendous changes at increasing speed.

For example, regulators have paved the way for more dynamic and faster decision-making, have approved new technologies, including digital health solutions, and have facilitated new reimbursement pathways; and medical and biological research has accomplished breakthroughs with emerging technologies, such as in-silico protein folding prediction, novel cell therapies and other treatment platforms.

The overall impact has been to make healthcare more focused on human needs. In the future, healthcare will inevitably become yet more personalized, digitized and preventative, with healthcare solutions seamlessly integrated into daily life.

In our latest global Future of Health study, based on survey responses and interviews with 150 senior healthcare executives, we paint a detailed picture of how these trends are likely to manifest themselves within what we call the LIFEcare system. We explore the resulting implications in the healthcare space, with a particular focus on the pharmaceutical industry.

What is new about the LIFEcare system is its holistic perspective, expanding beyond the legacy paradigm of reactive disease treatment (disease care) towards active health preservation and management (WellCare). People enter the LIFEcare system at birth and seamlessly move between the converging WellCare and disease care regimes throughout their lifetime. The ultimate aim is to improve human health and quality of life.

The WellCare system strives to keep people in good health by introducing new behaviors into an individual’s daily routine. These range from better nutrition and additional exercise to social engagement and personal use of digital health solutions. To an increasing extent, future WellCare regimes will seek partnership models with corporate health programs and reach partial reimbursement agreements with insurers.

Disease care systems, meanwhile, will focus more on early detection and on the targeted and personalized treatment of adverse health conditions. While the principal goals of returning the patient to better health and improving quality of life will continue, disease care will take a more holistic approach to treatment, spanning a full range of solutions. Patients will play a more active role in defining their treatment pathway, while the ultimate decisions on that treatment will consider new sources of information, such as lifestyle data.

Executives believe that LIFEcare systems, characterized by the convergence of WellCare and disease care systems, will start to dominate. In fact, 75% of healthcare executives agree that LIFEcare systems will be widespread by 2035.

As the focus of LIFEcare shifts towards keeping people healthy, we will see a corresponding adjustment in global healthcare expenditures. Healthcare executives in the survey predict that around 20 percent of private and public healthcare expenditures will be devoted to WellCare in 2030, up from 11 percent in 2021 and representing a CAGR of 10 to 12 percent.

In monetary terms, this would entail total global WellCare spending of between US$ 2.8 and US$ 3.5 trillion by 2030. Conversely, disease care is expected to grow at a CAGR of only 3 percent in the same time period.

It is notable that future healthcare growth will come predominantly from revenue outside BioPharma’s core traditional business model. Indeed, the forecast strongly implies that this business model will face significant financial pressure in the coming years. BioPharma companies must transform their value chains in order to prosper in a future characterized by increasing technological disruption. Moreover, they need to reinvent their business model to remain relevant.

Our survey reveals that the most serious disruption to the pharmaceutical value chain is expected in relation to data systems and analytics (80 percent), followed by their ecosystem partnering capabilities (68 percent), research and development (67 percent), commercial operations (59 percent) and people and culture (32 percent). A smaller proportion (15 percent) expects BioPharma supply chains and operations to be the most disrupted facet of their companies.

To succeed in the LIFEcare system, pharmaceutical companies will have to rethink and develop their business model. We outline three ways in which they can position themselves in the future – as a solution provider, as a disease and WellCare orchestrator, or as an infrastructure provider.

For almost one-third of respondents, orchestrating disease care is perceived as the most financially attractive archetype for the future. It is not surprising, therefore, that a similar share of BioPharma executives signal they will aspire to this positioning. However, an analysis of 50 European health ecosystems suggests that this aspiration is still in its infancy. BioPharma companies participate in only 26 percent and orchestrate only eight percent of these 50 ecosystems.

Pharmaceutical companies setting their sights on this particular role face major challenges. These include regulatory obstacles to data access, competitive dynamics within the industry that hinder the necessary collaboration, and limited digital, data, and analytics capabilities and infrastructure.

In order to become disease care orchestrators, pharma companies need to strengthen a number of important capabilities, incorporating lessons from case studies outside the BioPharma industry. These include a sharp focus on a particular disease area or part of the care journey, proximity to the customer through direct access and by prioritizing customer experience and trust, a scalable business, and operating and data models.

The continuing BioPharma emphasis on disease care, despite the financial attractiveness and future potential of WellCare, is a striking conclusion of the survey. BioPharma companies thus risk leaving the field open to WellCare players and missing a potential opportunity.

In particular, we expect major investment from non-health players in the cardiovascular area, medicalizing their offering and eventually securing reimbursement. One example is Peloton, an online sports platform that partners with corporates and insurers on funding and reimbursement models.

Our study suggests that the transformation of healthcare is proceeding at full speed. By 2035, BioPharma companies will face a significantly different market environment from today, generating immense risks to their business model. One thing is clear – wait and see is not an option.

Instead, BioPharma executives must transform and develop their value chains to capitalize on the potential of new technology, data-driven approaches, and changing regulatory landscapes. At the same time, they must revamp their business models to stay competitive in a rapidly evolving marketplace.

About the Authors

  • Thomas Solbach advises clients in the healthcare and life sciences industry globally. He specializes in helping biopharma, diagnostics, and digital health solution providers to develop differentiated strategies, capabilities, and resilient operating models with a particular focus on precision medicine. He leads Strategy&’s EMEA pharma and life sciences commercial practice. Based in Frankfurt, he is a Partner with PwC Strategy& Germany.
  • Patrick Grünewald advises clients across the healthcare and life sciences industry globally. He is passionate about innovation in healthcare and focuses on digital health solutions and ecosystem strategies. He works with biopharma, diagnostics, and digital health solution providers to formulate winning strategies, design attractive business models, and build up the required organizational capabilities. Based in Frankfurt, he is a Director with PwC Strategy& Germany.



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