John Carlson shares his insights on design, manufacturing and supply chain strategies to meet the medical needs of the marketplace.
With more than 20,000 investors and biotech executives gathering in San Francisco, J. P. Morgan's annual Healthcare Conference is the largest biotech investor event in the world. In between meetings, panel sessions and massive rainfall, Kal Patel MD, senior vice president of digital health at Flex, sat down with Joe Jimenez, former CEO of Novartis and member of the Board of Directors for General Motors on January 11, 2018.
Kal Patel, MD: What do you feel are the biggest challenges for pharmaceuticals when deploying digital health solutions?
Joe Jimenez: There is no denying that pharma and healthcare have been slow to adopt digital solutions, especially compared to other industries. The reality is that this is a highly regulated space, and this regulated environment has contributed to the slow pace of adoption.
However, I believe the industry is poised to make real progress in embracing all things digital, as the potential for disruption is significant. This challenge is two-fold as companies need to both deploy a cultural shift as well as acquire new skills to fully embrace and leverage the benefits of technology.
Kal Patel, MD: How real are the regulatory challenges, or are they manageable hurdles that companies use as an excuse to stall innovation?
Joe Jimenez: Having the right regulatory framework in place will be critical moving forward. The good news is that FDA Commissioner Scott Gottlieb has recognized this, and is working to change the FDA to help mitigate previous regulatory hurdles while creating a framework that is helping the industry advance innovation. For example, we have better infrastructure in place to support new, novel technologies in healthcare since the FDA’s creation of the new digital health unit.
Kal Patel, MD: What digital technology or trend are you most excited about for healthcare?
Joe Jimenez: I'm most excited about the potential for digital technology to help quantify the outcomes of our medicines and treatments. Eventually, pharma companies are not going to be paid based off of the number of pills that they sell. Instead, they’re going to be paid by the outcomes and the impact medicines have on patients’ lives and society.
At Novartis, we hope that we can leverage new technology to identify outcomes, which are beginning to shape pricing models. For example, for our CAR-T therapy, Kymriah™, Novartis is working with the Centers for Medicare & Medicaid Services (CMS) on a novel collaboration, offering a unique outcomes-based approach for the first indication that would allow for payment only when pediatric and young Acute Lymphoblastic Leukemia patients respond to this therapy by the end of the first month.
In the future, we may be able to use advanced analytics to quantify more outcomes. Equally important is the research and development side. We have a huge opportunity to accelerate the clinical trial process by leveraging digital tools such as advanced analytics, machine learning, and AI. By digitizing the R&D process, we expect to be able to speed up the time it takes to bring a new medicine to market, helping us to better identify the right patients for a clinical trial, and the best sites for a trial, as we develop more targeted therapies.
Kal Patel, MD: Novartis has been working to leverage digital health. What tangible advice would you give your C-suite peers in terms of structuring for success when introducing new digital solutions? What would you do differently?
Joe Jimenez: Looking ahead, I believe that the companies that are thinking about the technologies that can digitize a big portion of what they do and change what they do for the better are the companies that are going to be ahead of the competition. And the key to adopting these technologies is both culture and organizational change and flexibility. For example, at Novartis, we’re at the beginning of a data revolution and are looking at how technology can change how we innovate, operate and sell. We want to ensure that every associate is fully embracing digital technologies, advanced analytics and artificial intelligence in all aspects of our business.
Take clinical trials, for example. We have a ton of clinical trial data over the years, spanning millions of patients. Through AI and machine learning, we can take a closer look at this data to find efficiencies, for instance determining what trial sites to use. This may ultimately help reduce the time it takes to bring new drugs to the market as well as lower development costs.
Kal Patel, MD: What similarities and differences do you see in terms of how the incumbents in healthcare and automotive are responding?
Joe Jimenez: New and long-standing companies in both industries are responding by embracing data. Companies are increasingly realizing why more effective and efficient interpretation of data is crucial for their respective stakeholders—and are leveraging it.
In the automotive industry, this can be seen in connected cars. Car companies can now release software updates in real time, which is important during a recall. They can also use data from the car to analyze its performance and obtain valuable data on how drivers use their cars.
In healthcare, the industry is leveraging data to empower patients to make better decisions about their own health. For example, we’re seeing more and more apps, wearables and other technologies aimed to help patients monitor and manage a disease, and connect with doctors. At Novartis, we’re using data and technology for more efficient clinical trials. Overall, the industry is utilizing decision support technologies such as machine learning and AI to assist in making diagnoses and developing treatment options.
AI and machine learning are enabling better and faster management, storage, and sharing of health records from previous slower methods.
Kal Patel, MD: It seems digital trends such as autonomous driving, fully electric vehicles, and ride sharing are disrupting the automotive industry, but digital is still an afterthought, or of marginal focus, in most of the incumbent pharmaceutical companies. Would you agree that the pharma and MedTech industries are five years behind in terms of digital disruption?
Joe Jimenez: No, I wouldn't say that the pharmaceutical industry is five years behind in terms of digital disruption. But there is still work to be done. A major reason for the delay is the fact that the healthcare industry is highly regulated. Moving forward, the industry needs to focus on how digital can make processes more efficient and effective.
Kal Patel, MD: Do you see Silicon Valley and the technology firms playing a similarly disruptive role in healthcare as they have in the automotive industry?
Joe Jimenez: Yes, and they already are. But it’s not one-sided. Instead, it is an interdependent relationship as both sides are benefiting from each other’s expertise to make game-changing technologies and treatments a reality. For instance, pharmaceutical companies have a deep understanding of the industry, diseases, and patient needs, whereas tech firms bring their own digital tools to the equation. If we leverage both, we can bring exciting, unprecedented treatments and tools for patients in need.
Kal Patel, MD: Technology startups have a "fail fast" mentality and are structured to constantly update and iterate their solutions, whereas pharmaceutical companies come from a world with a more conservative approach with long product life cycles. What cultural or structural challenges exist within pharmaceutical companies that could prevent rapid digital innovation?
Joe Jimenez: In many companies, there seems to be a tendency to be afraid of failure. That’s why throughout my tenure as CEO of Novartis, I worked to create a culture where failure isn’t feared and where teams are mobilized around innovation. Ask any scientist, and they will tell you that failure isn’t an end-all. Instead, the big bets our teams work on together can bring new findings that could lead to new discoveries.
We can only lose by not challenging ourselves to innovate. And while our industry is by nature a highly regulated one, and the process of exploring the science does take time, we must embrace digital technologies that can help speed up key pieces of this process.
Another key challenge is the need for new skills, as companies must learn how to navigate automation, big data, and cybersecurity, among others. At the same time, they need to adhere to evolving rules governing privacy, security, and the handling of data crossing or within borders. There is a learning curve that must be overcome with the right expertise.