Healthcare Market Shift
Since 2012 the healthcare market has made a major shift away from the historical Price/Volume system to an outcomes/value based system. The traditional price-based healthcare model whereby the most drugs are sold to the largest patient populations at the lowest price is not just changing, it is becoming redundant. Price is becoming increasingly only one out of many criteria used in the selection of drugs and other healthcare products. Instead, the upfront cost of a product is being weighed against the social and economic returns it can generate now and in the future compared to available competition. Under this new model, the victors will be those who can deliver true long-term value to patients, prescribers and payers.
This shift has changed the focus back to where it always should have been and that is to better patient health outcomes. Patient non adherence and compliance to therapeutic drug regimens has always placed a major financial burden on the healthcare system with estimated costs being in the 100’s of billions annually. The more convenient and safe that we can make it for patients to self-administer pharmaceutical drugs and biotech molecules the better the health outcomes which benefits the patient, the prescriber, the health insurance companies and the overall healthcare system. This also provides major benefits for Pharma and Biotech companies as better patient adherence typically means using more drugs which obviously can increase revenues.
This shift has also seen a move towards the convergence of the pharmaceutical industry with the medical device industry. This trend will only increase in the next 5-10 years especially as biotech companies bring more complex large molecules therapies to the market. This also creates enormous opportunities for companies that have the vision to seize the moment and break away from the Status Quo.