Monday, February 28, 2011

Pharma: It Must Invest in Improving Health Outcomes

If you're a businessperson and you see an opportunity, don't you take it? Especially if the opportunity is in a business that doesn't seem particularly interested in protecting its territory.

The territory we’re talking about: the quest for improving health outcomes. In a new Ernst and Young report, the authors say that non-traditional companies are investing in projects designed to improve health outcomes. To be sure, some of these partners are traditional, like Apple and Abbott Labs.

The non-traditional investments far outweigh those of Big Pharma. The non-traditionalists have spent $20 billion since 2006; Big Pharma’s figure was not given, but it wasn’t close to that, according to a Bloomberg story.

The authors say that Big Pharma has no choice but to invest in improving health outcomes, and for two reasons: the current health care system is not sustainable -- but new technologies can make it so. These technologies, the writers say, can drive behavioral change.

Examples of these projects include the insurer UnitedHealth Group, the YMCA, and Walgreens, which are working together in a diabetes management program. Others, according to Bloomberg, include GE, Telus Corp, a wireless carrier, and IBM.

One company, called PharmaTrust, based in Toronto, is creating a device called MedHome that dispenses the appropriate amount of medicines to patients in their homes. At the same time, it communicates with providers and caregivers about patients’ compliance, according to the report.

And Qualcomm, the mobile technology company, is hoping to increase compliance and health outcomes with its “connections:” an Internet-connected pill bottle cap designed to increase compliance and also lets patients refill prescriptions by pushing a button on the underside of the cap; and a “connected” blood glucose meter that tracks how often patients are testing themselves and reminds them when they are running low on supplies. They can even reorder from the device.

“Pharma is significantly behind the medical device industry in thinking about connectivity and using its power for productivity and business model innovation,” wrote one Qualcomm exec.

All we are suggesting is that innovation may quickly become the domain of others. What are the unintended consequences of this lack of pharma innovation? 

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