The number of Pharma 3.0 initiatives increased by 78% in 2010

Source: Ernst & Young.
Chart shows cumulative number of initiatives by pharma companies in existence per year.

There’s an app for that: investments in smartphone apps soared in 2010

Source: Ernst & Young.
Charts show number of pharma company initiatives by type, as identified by Ernst & Young.

Seeking unmet needs: investments diversified across disease categories in 2010

Source: Ernst & Young.
Charts show number of pharma company initiatives by type, as identified by Ernst & Young.

“It has been eye opening to realize how significantly we will need to invest in transformative partnerships and the broader health care ecosystem to be relevant in 3.0.” Kim Park, Johnson & Johnson

Summary: Pharma 3.0 is our term for a collection of trends signaling a new direction for healthcare. Pharma companies have expanded the number of Pharma 3.0 initiatives by 78% since 2010. Yet non-traditional players have invested even more in Pharma 3.0. Pharma companies need to increase their focus to stay ahead in this rapidly changing ecosystem.

Increasing Pharma 3.0 initiatives

The pace of change in the Pharma 3.0 ecosystem is accelerating. Pharma companies have expanded the number of reported Pharma 3.0 initiatives by 78% since 2010.

The number of Pharma 3.0 initiatives increased by 78%

Diversifying pharma initiatives

Because the pharma ecosystem is growing more complex, Pharma 3.0 initiatives are expanding to include a broader scope of:

• Technologies
• Disease categories
• Stages in the cycle of care

One technology that has taken off is the smartphone app. Between 2006 and 2009, 11% of Pharma 3.0 initiatives were smartphone apps. In 2010, the segment exploded. 41% of Pharma 3.0 initiatives were smartphone apps.

There’s an app for that: investments in smartphone apps soars

Pharma companies are expanding their Pharma 3.0 focus into a broader range of disease categories. Between 2006 and 2009, "diabetes and metabolics" accounted for 24% of Pharma 3.0 initiatives. In 2010, oncology claimed the top spot, with 15% of the year's initiatives, while diabetes and metabolics tied for second with immunoscience/inflammatory diseases (12% each).

Seeking unmet needs: investments diversified across disease categories

As payers and patients focus on meeting unmet needs across the cycle of care, pharma companies are taking a more holistic approach to their products and services.

For example, in 2010 the French drug company sanofi-aventis announced its goal of becoming the leading company focused on diabetes. How will it do this? By taking a page from the Pharma 3.0 playbook and investing in a variety of offerings beyond drugs, such as monitoring devices, insulin pumps, smartphone apps, patient-oriented services and educational programs.

Other companies focused on getting to 3.0 need to disrupt the value network and leverage their most sustainable strengths.

Non-pharma investment in Pharma 3.0

Despite pharma companies' rapid increase in Pharma 3.0 initiatives, non-pharma companies continue to invest more.

By our rough estimate, non-traditional players have publicly reported at least US$20b in intended investments in the health outcomes space. This is the challenge pharma companies face.

Pharma companies will need a road map for change to know where to invest these funds. The road map will include connecting information, radical collaboration with new partners and developing multiple business models.

Focusing on healthcare outcomes

Pharma 3.0's new focus on healthcare outcomes is changing the rules of the game for pharma companies and creating openings for non-traditional players.

For pharma companies to seize these opportunities, they will need to create new business models. This means collaborating in radically different ways with very dissimilarpartners. Additionally, it requires new skills and support systems. We offer advice for implementing change for pharma companies focused on Pharma 3.0.