convergence of medicines and consumer products

© PA Knowledge Limited 2014 1

THE CONVERGENCE OF CONSUMER PRODUCTS AND MEDICINE

From Dx to DIY: Opportunities in the Interzone

Michael G. Frank

AMCF

October 24th 2014


70 YEARS OF UNCONSTRAINED THINKING AND EXCEPTIONAL RESULTS

…AND WE ARE STILL AHEAD OF OUR TIME

2006

GULF

We helped source one of

the world’s first WIMAX networks

for Mena Telecom

EUROPE

We helped transform the

Republic of Georgia’s collapsed

electricity supply system

EUROPE

We boosted Nissan’s production

by 30% using existing car-

making facilities

2010

EUROPE

We helped deliver a new

biometric UK passport,

saving the taxpayer £160

million

EUROPE

We helped Onzo develop an

innovative home ‘Smart

Energy Kit’

US

We developed new

‘fresh air’ technology that

protects against superbugs

EUROPE

We created a next-

generation heart

disease probe for

Thermocore Medical

NORDICS

We helped implement

a new air traffic

management system for

Naviair

2007

2008

EUROPE

We developed

test equipment

for the 4G mobile

networks

US

We helped the US

Navy define a cost

reduction strategy to

achieve savings of

$400 million

per submarine

1950s

EUROPE

We helped the Bank

of England

dramatically reduce

banknote forgery

EUROPE

We advised the European

Community on Japanese

trade and investment

EUROPE

We helped pioneer a

single-union agreement

for Nissan’s UK workforce

1980s

1990s

EUROPE

We established the

UK’s first competitive

market for electricity

supply

US

We delivered a

baggage-handling

system for Denver

International Airport

US

We developed the

first breath-actuated

metred dose inhaler

ASIA PACIFIC

We planned Sydney’s hosting of

the highly acclaimed 2000

Olympic Games

US

We realised $125 million

on sale of medical venture

company Meridica

GLOBAL

We led Siemens VDO

Automotive’s global

relocation of six factories

EUROPE

We tripled sales with an

iconic bottle design for Evian

2000-05

EUROPE

We helped the

UNHCR transform

their IT department

to deliver greater

protection and

shelter for refugees

EUROPE

We launched an

online weather

community that

helped the UK Met

Office capture two

million readings in

just five weeks

2011

ASIA PACIFIC

We co-ordinated

completion of the

Sydney Opera

House

1960s

1970s

NORDICS

We developed the

first private digital

telephone exchange

EUROPE

We pioneered maintenance

of Shell’s first North Sea oil

platform

EUROPE

We created the video disc’s

forerunner

US

We computerised 30,000

miles of railroad for

Chessie Systems, Inc.

2012

US

We gave Hawaiian Electric a strategy

to reduce carbon emissions from their

generation business by 40%

EUROPE

We transformed Carnival UK’s supply

chain to deliver annual savings of £2.5

million

EUROPE

We helped to protect troops’ lives

in Afghanistan with an innovative

explosive device detection system

US

We helped Pepco

secure US government

funding for their smart

grid projects

EUROPE

We developed the

world’s first pre-filled,

single use, disposable

injector

EUROPE

We helped JCDecaux

develop the UK’s first

real-time advertising

verification system

2009

EUROPE

We increased national

productivity at a time

of crisis for the UK

government

1943

US

We worked with Google

to launch a global real-time

music game

EUROPE

We supported the creation

of the PRA, helping transform

financial

regulation in the UK

EUROPE

We developed and delivered

Ora, a revolutionary new

kitchen towel, from concept to

store within 12 months

2013

www.paconsulting.com/PA70

2014


The best way to predict the future is to invent it

― Dennis Gabor, Nobel Prize in Physics for holography


Professional

Products

i.e. PET Scan

Consumer

Products

i.e. toothbrush

Food and

Supplements

i.e. Airborne

Pharmaceutical

Products

Technology is flowing from clinic to the

home, and sometimes back again

Patient DIY is the new normal in wellness

and moving into chronic care

The sophistication of consumer

products and technology is blurring the

line between professional medical and

consumer products

Our ability to understand and manipulate

biology is opening new interfaces

between tech and bio

The walls between a medical product and a consumer product are porous

Introduction What do we mean by medical convergence?


Fertility Monitoring

Nodes of intersection are the future opportunities Diagnostic and therapeutic cross over varies by specialty

Clinical and laboratory Point of Care, Spa Retail & Home

MRI

Genomics, Proteomics

Dialysis and Infusions

Audiology &Vision

Dental/ Whitening

Blood Chemistry Analysis

Dermatology and Cosmetics

?


Key Drivers Patients are becoming consumers, industry and regulation is responding

Medicines are consumer products

Regulations and payer flux DIY and consumerization Patient pull

• What counts as a device?

• Who is going to pay for it?

• Speed to market vs. depth

• Empowered patients

• Convenience

• Exploiting self quantification

• Digital pharma

• DIY Diagnostics (Dx) and

Treatment (Tx)

• From wellness to chronic care

Create and exploit the nexus of professional and consumer


As innovation pushes medical products toward consumer.. Convergence can occur between multiple domains

Convergent

Hospital

Medical Products Consumer

• MRI

• Anesthesia Machine

• EKG

• Clinical Blood Analyzer

• Surgical Equipment

• Eye and Ear aids

• Blood Glucose Monitors

• Insulin Pumps

• Point of Care and Home

Diagnostics

• CPAP

• Weight Scale

• Wound Care

• Temp, BP, HR meters

• Wellness APS

• Caloric measurements

Outpatient, POC Home

Rx Drugs Over The Counter Supplements & Cosmetics

Devic

es/D

igit

al

Se

rvic

e

Dru

gs

Transition Care PGHD2 (Patient Generated

Health Data & Devices) Hospital services


A key market opportunity is the mobile health space Wellness tracking is a small portion of the future market

Monitoring, 65%

Diagnosis, 15%

Treatment, 10%

HCP Support, 5%

Wellness , 3%

Administration, 1%

Prevention , 1%

Source Logic PD, Global market in 2017

Breakdown of anticipated market segments in mobile health

With over a 23B global potential, mobile health provides massive opportunities in diagnosis and monitoring


Management consulting has a role in across each aspect of convergence

Managing

the approach to

market

Exploiting

data from

consumer technology

Technology selection or build

Strategy

and business

case for

new

customers


Home MedTech Self Quantification Shifting Categories

Shifting professional clinical equipment to the home

Convergence



Consulting Example: Technology development Diabetes monitoring demonstrates consumer pull on a professional device

Reflomat First

mass market meter

1957

Lifescan

Automatic timing

Esprit- First downloadable

data to PC

iBGStar

Clinistix

1974 1980

2010 1998

Diabeetus

1997

1983

First patient taught to use meter at

home, regarded as “dangerous”

1975

Future

Non-Invasive

Monitoring

2000 2007

Exacsys (PA)

Continuous Blood

Glucose Monitoring

A1C

Technology


Background: Diagnostics are not always first to move to the home Dermatologic treatment devices have moved from clinic, to spa, to home

Ioma Youth Booster

Zeno Hot Spot

Home Diagnostics (Early stage)

Home Treatments (Mature)

Clarisonic Acu-Clear

Dove ProX Headband


ScanZ Analyzer


Consulting Example: Pharma M&A facilitation Medical & consumer packaged goods companies are joining forces

• Evidence based efficacy

of home products

• Regulatory and market

approach

• Diagnostic and treatment

product coordination

Company

channels

Medical Data

Corporate

Objectives

IP

Social Data

Nodes of Opportunity


Approach


Self quantification- DIY extending beyond wellness into chronic conditions



Cardio and Respiratory

Metabolism

Blood Chemistry

Neuro

Motion and Injury

Moving beyond just heart rate to O2

saturation sensors, predict risk

Caloric monitoring, linked scales, body

fat, temperature: feedback to HCPs

and drug developers

Expanding beyond glucose into

cholesterol, metabolomics

Biofeedback to monitor neurological Rx

Helmet concussion sensors , joint

strain indicators, augmentation

Consumer

Medicine

Consumer medical technology is an opportunity for pharmaceuticals to engage and deliver better customer outcomes with digital services

Background Self quantification combines DIY measurement with clinical grade data



Consulting Example: Beyond the Pill Services Smart device data for drug monitoring opens up new offerings for pharma

Smart device

data collection Digital Health Platform Feedback to pharma, HCPs

Big Data Environment

Capture

Advanced

Analytics

Tools

Advanced

Analytics

Data handling Measurement

Data

Heartbeat

Activity

Drug

intake

Mood

Biofeeds

Extraction

Trans-

formation

Load

Security

Privacy

Quality

Storage / Big Data Warehousing

CPU-Power / Hardware

Modeling

Monitoring and

intervention

Classification

Prediction Research &

Development

Relapse

prediction

Drug

compliance


Data


Consulting Example: Wearable as loss of exclusivity strategy Transdermal smart patch and service offering for Alzheimer’s symptoms

Convergence A mechanical device, drug and service to provide dosing adherence in a challenging patient population.

A thin flexible band-aid like patch less

than a millimetre thick and about the size

of nickel. The patch is coupled with a

transdermal delivery system and

communicates with a smart watch,

preventing multiple patch applications

and providing feedback on dosing

efficacy.

• Manufacturing analysis

• Combination product

pathway

• Service business design



Technology



Mapping a regulatory strategy across boundaries


Background: Knowing the FDA is essential in uncharted segments Historically FDA acts in response to health crisis

Source: www.fdareview.org/history.shtml#third

Pure Food and Drugs Act

.U.S. Pharmacopoeia

1906 1984

Food, Drugs, and Cosmetic Act,

NDA ,Massengill Elixer

1938

Hatch Waxmen Act

Generics,ANDA

1976

Class I, II,III

Dalkon Shield IUD

1992

Prescription Drug

User Fee Act

(PDUFA)

Dietary Supplement

Health and Education

Act (DSHEA)

1994 1930

FDA Formed

As technology advances ahead of FDA guidance, understanding how they perceive risk and reward is essential.

2013

Mobile Medical

Apps Guidance


1962

Thalidomide


Consulting Example: Defining a product classification Determining when a drug is a drug and a device is a device

Alpha-

Tocotrienols for

Pancreatic

cancer Rx Drug

Supplement

Cosmetic

Medical Device

DNA repair

cream

Topical DNA

Repair Startup

Oncology Biotech

Startup


Smaller market

Low testing burden

Smaller market

No medical claims

Larger market

Efficacy burden

Largest market

Highest efficacy burden

Approach


Consulting Example continued Designing the launch approach

Reg

ula

tory

Ris

k

Potential Market

• Align product strategy with

long term company

objectives

• Identify analogs to quantify

risk

• Develop portfolio approach

(temporal / geographic)


Cosmetic

Medical Device

Supplement

OTC Drug

Rx Drug


Customers


Challenges Consultants need an understanding of the spectrum of complexities

Challenges in convergence

• Consumer psychology and purchasing behavior

• New channels

• Price sensitivity

• Revenue and reibursement models

• Clinician resistance and skepticism of self test data

• Patient resistance

• Human factors

• Regulatory hurdles

• Differentiation in crowded market



Management Consulting’s role recap Consulting in convergent space requires a suite of skills

Technology

across domains

Strategy and business

case for

new

customers

Managing

the approach to

market

Exploiting

data from

consumer technology


Conclusion Explore the nodes where professional and consumer products converge

DIY

Behavior

Incentives

Audiology

Vision

Smart Rx

Cosmetics

Identify, Invest In or Invent Nodes of Convergence

Chronology

Wellframe

Sage

Bionetworks

Goderma

Kinsa

Galvanic

Networks Data

synergy

Tx

Dx

Wearables


Questions? Contact info: [email protected] Twitter: @michaelGfrank

convergence of medicines and consumer products

Health & Medicine

refugees europe

factories europe

investment europe

superbugs europe

disposable injector

banknote forgery europe

mena telecom europe

smart grid projects