Finding Opportunities in the Information Value Chain
At a recent meeting with a molecular diagnostics client, I went around the room and asked each executive to tell me what business he/she was in.
Each one had a similar response: “We’re in the diagnostics business,” or “we sell lab equipment,” or “our customers look to us for innovative assays.” But when I came to the head of sales, he had a more thoughtful take. He talked about how their tests generate critical information that drives treatment decisions, and how the value of the tests is derived from the accuracy of the results. Finally, he concluded “if you think about it, we’re really in the information business.”
Pharmaceutical and biotech companies bring products and services to market through a well-established and understood industrial supply chain, in which value is created and captured throughout production, sale and distribution. However, this manufacturing-based model overlooks opportunities for value creation and capture that are arguably more important and meaningful to our industry today. Companies should be looking at their growth strategies through the information value chain, to identify opportunities to turn data into competitive advantage.
I first used the information value chain about 10 years ago as a consultant to the publishing industry, demonstrating how the digitization of their content allowed them to both create and capture new value. Now I’d like CROs to apply this framework to their industry, in order to make strategic decisions about where to focus and invest and how to better deliver value into the healthcare system.
While CROs represent nearly 10% of the $245 billion R&D market, according to a 2014 ISR report, growth in total R&D spending has flattened out, resulting in more intense rivalry among CROs. To grab a bigger share of the pie, they will need to examine the information value chain globally to identify new opportunities. Here are a few:
- Crowdsourcing trial design: According to Adam Chasse, president of RxTrials, protocols are becoming more complex. More people are adding to the list of exclusion criteria, there is little prioritization of the criteria, and they are not evaluated against real-world constraints. Blogger Matthew Katz, M.D., suggests “patients, community doctors and nurses, administrators and advocates all may find problems that limit the ability to offer a specific trial.” Crowdsourcing has the potential to turn R&D on its head by bringing together cross-functional stakeholders and leveraging real-world data and expertise to create better protocols. By improving trial design, trial expenses can be reduced and time to market can be accelerated. And engaging stakeholders earlier in the process can raise public understanding of the availability of clinical trials, thus increasing participation.
- Advancing feasibility studies: Another area in which CROs can create and capture value is through feasibility assessments to reduce the burden sites currently face when trying to find, enroll and retain patients in unrealistic timeframes. Predictive modeling technologies can have a significant impact on establishing realistic enrollment goals for sites. Additional information technology tools can help support patient identification and engagement.
- Optimizing trial operations: The global market for bioinformatics—the application of information technology to manage biological information—is projected to pass $12 billion by 2020, according to a new study by Grand View Research. While North America holds the lion’s share of the market (42.4%), the Asia Pacific market is exploding, with year-over-year growth expected to be more than 25% during the next six years. In addition to outsourcing to Asia to gain skilled workers at lower labor costs, CROs can leverage bioinformatics to manage the large amount of data produced during and after clinical trials and deploy cloud solutions to improve standardizing response evaluations and reduce variability in multi-center clinical trials.
- Communicating study outcomes: In an article from FierceBiotechIT, Germany-based Boehringer Ingelheim was highlighted and praised by social media giant Twitter. Boehringer used the #COPDChat hashtag (Chronic Obstructive Pulmonary Disease) and paid promotional tweets to raise its profile during the 2013 European Respiratory Society Congress. The end result was a 7% jump in the number of people following the company and over 1.7 million tweet chats impressions. That many impressions in such a targeted audience can exponentially expand the communications reach of important clinical data.
CROs have an opportunity to create value by closing the loop between upstream crowdsourcing and downstream dissemination of important trial outcomes among key stakeholders and influencers through social media.
Matthew Howes is head of strategic services at inVentiv Digital + Innovation, the digital center of excellence for inVentiv Health. A leader in digital strategy, Matthew has provided the fuel for digital businesses visited by over 100 million people every month and generate billions of dollars in revenue every year.
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