The United States accounts about 40% of the global pharmaceutical market.
On July 10, 2015 a bill for the 21st Century Cure Act passed in the US Congress with a huge majority of 344 to 77 votes. The bill is currently before the Senate and, while nothing in life is certain but death and taxes, it is expected to pass later this year.
The 21st Century Cures Act will have a huge impact on the pharmaceutical industry nationally and globally. According to Statistica, the United States accounts for about 40% of the global pharmaceutical market which was valued at around $365 million in 2014.
All of the major pharmaceutical companies target the United States, and in the same way that businesses who trade with America must comply with US Sarbanes-Oxley financial accounting regulations, they will have to comply with the 21st Century Cures Act if they work in health care.
The aim of the Act is to accelerate the approval and lower the cost of bringing drugs to market. From inception to release drugs take years of research and development time.
While major drug companies spend an average of at least $4 billion with some medicines costing an eye-watering $11 billion, according to InnoThink Center for Research In Biomedical Innovation.
The approvals process at present is extremely thorough, and rightly so, the 21st Century Cures Act will not water down the process, rather it will speed things up by taking advantage of technological advances in data collection, management and analytics.
In reality this type of data collection and analysis is happening already with patients taking matters into their own hands but obviously not at the envisioned scale. Today, citizen scientists with rare diseases are tracking their own condition and in some cases experimenting with compounds.
Experimenting with unapproved, unlicensed drugs is nothing new of course, and brings to mind the events popularised by the Oscar winning movie The Dallas Buyers Club, in which HIV/AIDS treatments were sourced and distributed in the 1980s with apparent success until the FDA changed the regulations to make unlicensed drugs illegal.
In the movie, the FDA is painted as the villain of the piece, but it goes without saying that allowing citizens to self-prescribe potentially dangerous unproven drugs is something no government would countenance. Speeding up the process of approvals on drugs will save both lives and money.
Precision medicine, meanwhile, is a programme announced by the Obama administration last January. With an already approved budget it is an emerging approach for disease treatment and prevention, which includes a patient’s variability in their genes, environment, and a person’s lifestyle.
What has the precision medicine initiative got to do with the 21st Century Cures Act?
Precision medicine would allow the inclusion of much more technology driven healthcare innovation and would permit the introduction of additional personal data and information into health science. The bill mentions and defines precision medicine specifically again in the section “FDA Advancement of Precision Medicine” as an advanced analytical subset approach.
The requirement to get drugs to market faster is evident. However, a lack of interoperability poses a huge challenge when it comes to getting patient data consolidated in time for clinical trials. A large part of the new legislation is aimed at trying to connect the research and development arms of life science companies to health IT or digital health specialists.
With fresh funding flowing into the market and an acknowledgement that technology will be the great enabler, the opportunities for IT services and solutions providers in the health care sector have never been better.
From one perspective, ultimately, all pharmaceutical companies will benefit from the Act as they will be able to get their drugs out faster. On the technology side, the major beneficiaries of the Act will be the big data analytics players, since this lies at the heart of speeding up approvals.
On the devices side (data collection) we’re likely to see many more wearables coming to market. There is already a great deal of consumer and business interest in wearables that passively monitor vital signs — it is likely that this will be escalated as pharmaceutical firms issue contracts for these companies, even the Fitbits of this world will be embraced to collect more data.
One of the biggest regulatory hurdles for pharmaceuticals firms in a world of data sharing and analytics is maintaining the security of personal information. Pharmaceutical companies will need to find a way to ‘de-identify’ or depersonalise the data while still being able to track back to an individual, not a named individual, but an individual.
Technology health care providers could look towards the blockchain protocols employed by Bitcoin to de-identify, but verify personal information, and 2016 could well see the emergence of start-ups using blockchain in health care security.
In addition to security, another challenge lies with the pharmaceutical supply chain. Supply chains today are based around the fully understood and drawn out time it takes a drug to get into the wild. If the clinical trials speed up and they go to full production faster it means the pharmaceutical supply chains need to be more flexible.
Future supply chains must adjust much more quickly with the right set of traceability in order to report on where the drugs went, who bought them and how, if not individuals, then at least at the wholesale and pharmacy level.
Pharmaceutical supply chains today are simply not that flexible. Big pharma is global, the supply chains feature plants around the world, located in different continents from the compounds being used to create the drugs. Add to that the complexity of global distribution networks and we start to see that the logistical challenge of speeding up this latticework of sources and suppliers will pose a huge challenge for the pharmaceutical industry if/when the Act goes through.
The good news is most (if not all) of the major players are fully aware of the challenges and opportunities of the Act. Perhaps some of the smaller biotech players are less prepared, but on the plus side, they are smaller and more agile.
In the short term, life sciences, especially big pharma, will invest heavily in order to speed up the approvals process, they probably won’t see the return on investment for a number of years. For these players, the major initial incentive will be the regulatory requirement to play ball. For technology providers, in the space if/when the Act passes, it is game on.
About the author
Eugene Borukhovich is senior vice president and Healthcare Global Vertical Practice Leader at SoftServe. Eugene is an international expert on health care information technology innovation, where he previously served as VP and CIO of International at a Fortune 15 pharmacy benefit management company before SoftServe. Eugene was also a co-founder and chief evangelist officer at healthcare startup, HealthWorldWeb.