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Data and culture as stepping stones for Digital@Scale

Pharma and medtech companies around the world have been building up their in-house capabilities in digital and advanced analytics, but five challenges to implementing a digital strategy persist.

Increasingly, we are seeing the importance that well-implemented digital and analytics strategy can have at a company, including positive impact on a company’s bottom line. However, it has been a challenge for organizations to shift from individual digital initiatives that have proven value, to scaling them into broader initiatives that have benefits across the business.

Companies looking to implement and scale a digital strategy have increased their focus on technological capabilities. However, while this continues to be an area that many companies struggle with, successful scaling encompasses more than adding technological capabilities.

Barriers to Digital@Scale

In 2015, when we ran our first European roundtable on digital in pharma and medtech, participants were still discussing whether digital was here to stay and how to adopt it. Since then, pharma and medtech companies around the world have built up their capabilities in digital and advanced-analytics solutions, using both in-house expertise as well as external partners.

Sidebar

For our most recent digital roundtable—now part of a well-regarded biannual Digital Roundtable series—we invited 25 digital leaders from across Europe’s pharma and medtech industry to consider the hurdles to implementing a digital strategy at full scale and to identify what it takes to overcome these barriers within their organizations, the industry, and society. We also interviewed three prominent digital leaders who have successfully scaled digital (see sidebar, “What it takes to scale: Reflections from Roche Diagnostics, Boehringer Ingelheim, and Novo Nordisk”).

From our discussions and survey of these leaders, five challenges to scaling digital were identified (exhibit):

  • Lack of alignment between a company culture and the digital/analytics strategy was one of the top issues cited by both pharma and medtech leaders. Indeed, culture continues to be top of mind for the industry as it was in our 2018 paper “Barriers to Digital@Scale—shifting the focus from tech to culture,” with many citing the importance of an entrepreneurial culture for companies implementing and scaling a digital strategy.
  • Access to data and lack of integrated data sources were also cited by both groups as a top issue. Access to data is essential to fuel the digital and analytics use cases.
  • Unclear market-access pathways are also an issue, particularly for medtechs, due to the difficulty in defining new business models. This is especially apparent in the context of innovative solutions that are setting new precedents and disrupting business models. For incumbents in the pharma and medtech sector, reimbursement is an important consideration in market access, whereas in digital health, new payment models—such as payment for efficiency gains or patient payment out of pocket—come into play.
  • IT platforms and infrastructure were also cited as a top issue for pharma companies, with many saying that infrastructures have not kept up with the needs of new solutions. This was seen as much less of an issue for medtech companies because software development has been part of many medtech companies’ core business for years, with software often integral to medtech products. External interoperability was also cited as a top issue for pharma companies.
  • In contrast, data quality was perceived as a bigger issue for medtech than pharma, with interoperability and lack of consistent standards identified as the main inhibitors. While standards such as Digital Imaging and Communications in Medicine (DICOM), Health Level 7 (HL7), and Integrating the Health Enterprise (IHE) have been around for decades, the market is still seen as fragmented. Quality data exchanges between entities thus remains difficult and prevents economies of scale. In fact, new digital health solutions, which often depend on the exchange of data between entities, are often hampered by costly data integration measures.
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What is the next horizon?

In our discussions, the majority of participants said they were already looking at the next horizon. Scaling up the success of individual pilots into a company-wide digital strategy requires overcoming barriers relating to culture, data, and market access. This includes transforming the mind-set and culture of their overall organization (for example, through partnerships), facilitating access to data by educating patients and regulators about the purpose and potential benefits, while simultaneously implementing novel business models successfully.

Two other important success factors also emerged in our discussions. Strong leadership is essential, which makes Digital@Scale a CEO topic. CEOs will need to team up with a digital officer with a robust vision to advance the cultural change required within the organization. Success will also depend on the education of patients and policymakers to unleash Digital@Scale.

Jump-starting Digital@Scale

We have seen that for successfully scaling digital, data and culture are important ingredients beyond sheer technology.

To get started, we found the following questions helpful in assessing where your company stands in scaling digital, as well as where you want to be as a critical first step:

  • Is there a bold business vision, burning platform, or desire to build digital products?
  • How will business and technology partner to deliver on this bold vision?
  • What are the market-access pathways for your vision? How can existing pathways be employed, and whom do you need to convince to create new ones?
  • How can you connect new digital platforms and technologies to your legacy IT to create value for patients and customers?
  • What is the path to make existing data accessible and reliable, enabling the new models in an economical way and without disrupting running business?

The pressure on healthcare to improve and evolve is massive. Technology is a necessary precondition, but it needs to be flanked by data and culture.

About the author(s)

Manuel Möller is a partner in McKinsey’s Frankfurt office, and Nils Moser is a consultant in the Hamburg office.

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