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Time for life science industry and healthcare to reinvent itself

The Big Pharma business model where the development of a new drug takes 15 years and billions of dollars in development costs is clearly heading towards a dead end. “The large clinical trials have become too expensive. The challenge now is for the academia to devise less expensive trials. We have to find new ways to do this.” said Lennart Persson, director of Uppsala University Hospital. Richard Bergström, director general of EFPIA, agreed: “We need new study designs to shift focus to effectiveness.”
The Big Pharma business model where the development of a new drug takes 15 years and billions of dollars in development costs is clearly heading towards a dead end. “The large clinical trials have become too expensive. The challenge now is for the academia to devise less expensive trials. We have to find new ways to do this.” said Lennart Persson, director of Uppsala University Hospital. Richard Bergström, director general of EFPIA, agreed: “We need new study designs to shift focus to effectiveness.”

Communication is crucial in bridging the gap between science and healthcare. But in spite of the abundance of information in the health systems of developed countries today, information isn’t always available or useful. “A doctor typically receives less information about his patient than a car mechanic who is about to repair a car.” said Ulf Landegren, professor of SciLIfeLab, Uppsala University. As a result of lack of communication within the health system patients suffer. The over-medication of elderly people is a well-known phenomenon. In Sweden, half of the elderly people come to emergency rooms as a result of drug poisoning. “It’s crazy. We have employed ten pharmacists with the primary task to withdraw drugs from patients. One particular problem is how drugs interact with one another. If you have 20 drugs on the list, how do they interact?” said Lennart Persson.

The much hyped concept of personalised medicine could have an important role to play, Ulf Landegren pointed out: “the goal is that the patient will not have to be the guinea-pig when it comes to how drugs interact, but that will be known on beforehand. This, however, would probably be to the detriment of the pharmaceutical industry, because it would lead to fewer drugs being used.”

In Asia, a more business centred approach to healthcare is emerging. “We are looking at the healthcare system the other way around. The perspective is always what one can afford to do on a national or individual level. This results in a very value for money based healthcare.” said N. Krishna Reddy, chief executive officer of Care Hospitals. Lim Cheok Peng, managing director of IHH Healthcare Berhard added that his company always first looks at the country and its GDP when deciding how to create good, basic, affordable healthcare systems. “There is no one-size-fits-all in healthcare. In Malaysia, there are even mobile buses with operating theatres and X-rays, providing healthcare to the rural areas. At the same time there is also a market for premium care in Asia. One segment must subsidise the other.”

Financial necessities were also at the heart of the presentation of Miklós Szócska, Hungary’s Minister of State for Health. The financial crisis is hitting Europe hard, and this also affects national healthcare budgets. When you can’t afford to spend more than 4 percent of GDP on healthcare – what do you do? Hungary has opted to create a completely new model for the healthcare system, based on real needs. Social networking analysis has been used to visualise patient movements, resulting in a number of inefficient hospitals being closed and a new, more effective healthcare administration structure.

One mistake that healthcare systems and policymakers often make is assuming that we are all ultimately rational human beings who will make rational choices if provided with enough information. This assumption could be a severe stumbling-block when trying to get implementation right. Behavioural scientist Pelle Guldborg Hansen, said “stakeholders put their money in the hospitals. It is weird to me since it must be better to prevent people from ending up at hospitals.”

Paul Grundy, global health director of healthcare transformation in IBM, agreed: “what drives the change? That the cost of healthcare is unsustainable. Instead of paying for hospital care, it ought to be possible to pay the health care system for preventing sickness and need of care. We are paying for the wrong things. There is no correlation between how expensive healthcare is and how good it is.”

Gerald Poetzsch, business director of Philips Healthcare Nordic, stressed that as healthcare is changing, so are business models: “We no longer just deliver equipment. We build, operate and manage facilities, entire hospitals even. This is why there is a need to change the procurement process, since increasingly it is more about procuring a long-term partner than a product.”

Life Science Frontiers summit brought together over 120 senior executives from around Europe and 22 speakers including Miklós Szócska, Minister of State for Health, Hungary Dame Julie Moore, chief executive of University Hospitals Birmingham NHS Foundation Trust, Nigel Darby, vice president biotechnologies and CTO healthcare life sciences of GE Healthcare Life Sciences, Ilona Kickbusch, director global health programme of Graduate Institute of International and Development Studies in Geneva, Jeremy Nicholson, head of the department of surgery and cancer, Imperial College London.

Full list of speakers is available on: www.economistconferences.com/lifesciences . Life Science Frontiers was organised by Economist Conferences, part of The Economist Group. The premium sponsor was Världsklass Uppsala, with Philips as supporting sponsor. SciLifeLab and the University of Uppsala were official supporting organisations.
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