About the author: is a Principal at , an early stage Health Technology and Services focused VC Firm. He is a practicing physician at the Massachusetts General Hospital, and previously served as an Associate Medical Director at the Harvard Pilgrim Health Plan, and spent five years as an entrepreneur in the Health IT Industry.
1. The 21st Century Cures Act makes “Real World Evidence” a buzzword in pharma and payer circles, and justifiably so
For the uninitiated, “” (RWE) is a term that has received much attention and debate as a core component of the : a bill that received . The term refers to about the use of a drug after it has been approved by the FDA and prescribed to patients in the “real world.” This data is usually derived from electronic health records, claims databases, and patient-reported registries. Given the several ramifications of the Cures Act, 2017 will see pharma and payers clamor to acquire solutions to harness the power of RWE, creating new revenue opportunities for incumbents and early stage companies.
Amongst its many regulations, the Cures Act speeds up the while for other health related programs like NIH research, mental health, and . The Act passed in with a 295 – 14 vote in the house. Perhaps the most subtle, yet profound component of the law allows Pharma companies to do post-market launch research around (read: off-label) of drug products. If data suggests positive outcomes of off label use, this evidence can be used to expand the indications of use for that drug. This game changer will allow biopharma companies to save as the previous standard practice of expanding indications required re-running costly randomized control trials.
In addition to expanding indications, there are a host of other biopharma use cases for RWE highlighted in the below QuintilesIMS schematic where the case is made for a Billion dollar opportunity per pharma client.
From a payer perspective, the impact of expanding indications will be immediate, but the looming hazard is the sheer volume of high cost, specialty drugs and coming to market . To mitigate the uncertainty of the value of new, high-cost drugs, Payers are powered by RWE. A great example is my former employer, , who has pioneered a series of value based contracts for and drugs.
Given the above catalysts, there is a clamoring in both biopharma and payer circles for solutions to harness the power of RWE. Answering this call are a score of companies who are focusing on “value based” therapeutics analyses. One exciting company with significant market traction focused exclusively on RWE is NYC based (Arrivi, Lakestar). The company, founded by , is pioneering the concept of “” in healthcare. On behalf of its , the multidisciplinary team performs real-time simulated studies drawing on terabytes of . With statistical precision, the company can and reproduce the results of large scale clinical trials with 10x the speed of traditional methods of database programming, statistical modeling, and analysis.
There are a handful of health tech analytics companies previously focused on biopharma market access, reimbursement, and R&D efficiency that are now reorienting around the RWE use case. Some notable early stage tech companies here are GNS Healthcare (Cambia/Echo, Alexandria) and (Canaan, New Leaf, First Round). In addition to these early stage companies, the Large HCIT Conglomerates (QuintilesIMS, Optum, Truven/IBM, Inovalon) and traditional consulting firms (Avalere, ZS Associates, Decisions Resources Group) are starting to devote significant resources to this emerging opportunity in RWE and are likely acquirers in this space.
Special mention in this category goes to Flare Portfolio company, . The company is led by successful serial entrepreneur , who sold to QuintilesIMS in 2011. Health Verity is pioneering new ways for large healthcare enterprises . By liberating, enriching, and marketing previously siloed patient data, Health Verity is on pace to become a market leading supplier of the RWE mentioned above.