Custom Medicine for the Masses

Investor expectations, fueled by promises of genetic breakthroughs, are at an all-time high. Markets segmented by genetics-based diagnoses and rising demand for individualized care will soon make their mark on the industry's dominant blockbuster strategy. Rather than losing sleep over that, pharmaceutical executives can secure competitive advantage by capitalizing on the combination of consumers' rising power, increased access to information, and rejection of one-size-fits-all treatment regimens.

Pharma companies must also refocus their marketing and drug development efforts on a new goal: producing "multibusters"--care modules that bundle services with products. Such modules can personalize treatment in disease markets that will soon become segmented by each patient's genetic variation in drug response and susceptibility to disease.

That approach, known as mass customization, will meet consumers' demands to be treated as individuals and allow companies to build competitive advantage and customer allegiance. Such strategies are logical extensions of the industry's current emphasis on process standardization and improvement. This article describes that evolution and suggests ways to build competitive advantage in the postgenome market.

Consumer by Consumer

Two major trends--reinforced by the availability of online personalized health information and the further genetic segmentation of disease--will affect pharmaceutical markets.

Empowered consumers. Consumers' confidence and authority will increase along with their access to prescription reimbursement programs that have tiered deductibles and expanded product choices. Direct access to specific information through various media, especially the internet, supports consumers' confidence in requesting and receiving the treatments and responses they want. That availability also allows them to bypass traditional infomediaries such as physicians.

The industry's direct-to-consumer investments are just one source of consumer information. Patients can also access disease-management data on internet portals when their health plans or the severity of their symptoms spur them to action.

Individualized services. Because no constituencies-consumers, employers, providers, payers, or government reg-ulators-are happy with the current healthcare system, managed care organizations are abandoning one-size-fits-all approaches to controlling medication use. Instead, MCOs are adopting individualized case management to educate patients with serious and complex conditions. Consumers often see the resulting care as more personalized and appropriate for their needs.

Genetic definitions of disease will lead consumers to expect more individualized responses. When patients understand the uniqueness of their own health states in more detail, they are more likely to take initiative in learning about the disease process and staying abreast of available diagnostic and treatment options. Caregivers, payers, and pharma companies must all become more adept at addressing consumer demands for interventions targeted to their specific diseases.

Genomics and Genetics

US National Institutes of Health funding that was once used for mapping the human genome now focuses on pharmacogenetics, the study of relationships between drug responses and patients' genetic characteristics. Pharmacogenetics can identify variances in drug efficacy and adverse drug reactions arising from genetic differences. Progress in that field opens the door for drugs formerly rejected as ineffective or unsafe. Some clinical trials were inconclusive because participants had the same constellation of symptoms but did not share a common genetic cause for those symptoms.

Dr. Allen Roses first illustrated that point in a 1990 landmark study of Alzheimer's patients, in which his research team reported that the apoE gene on chromosome 19 affecting Alzheimer's susceptibility had three gene variants. One of those, the apoE4 gene variant, was associated with the early onset of Alzheimer's.

In response to those findings, researchers collected samples from patients enrolled in an earlier trial for First Horizon's Cognex (tacrine). After reclassifying them genetically, they found that Cognex was 83 percent effective in non-apoE4 patients--about 30 percent of the trial's subjects. In apoE4 patients, however, Cognex was only 10 percent effective, demonstrating genetic variation in drug response.

Similar work with Bristol-Myers Squibb's Pravachol (pravastatin), in which researchers genetically reclassified blood samples from a subset of clinical trial patients and correlated their trial results with their genotypes, showed that one group responded well to the drug, another group responded somewhat negatively, and a third group responded only slightly. Researchers have also reported genetic differences in patient responses to asthma drugs.

The Age of the Multibuster

Segmenting diseases by genetic origin has led some pharma executives to express concern that the approach might undermine the success of the blockbuster model. But there are still two reasons for optimism. First, classifying diseases by genetic origin and mapping genetic variants may allow scientists to engineer the next generation of blockbusters. Second, pharmaceuticals developed and manufactured using genetic methodologies or supported by a pharmacogenetic response profile should have a higher value when delivered as a "multibuster" care module that personalizes patient care. Such multibusters will have considerable market potential, even if they redefine blockbuster strategy.

Multibusters will be less likely to fail in clinical trials because pharmacogenetics is so highly targeted. Companies that collect and examine DNA samples during clinical trials may now use that information to design medicine-response profiles (pharmacogenetic tests) or to improve compounds that have "failed" for some patients because of genetic variations. (See "Why Genetics Will Be Important," page 66.) As a result, multibusters will reduce the R&D risk for new compounds and enhance existing products' uptake and market share growth by reducing doctors' concerns about safety and efficacy. Multibuster success will depend largely on the accumulation, or-ganization, and application of genetic information.

Evolution

Efforts to personalize medicine may make consumers happier, but they are also likely to increase market complexity and costs. Genetic specificity will expand classification possibilities, making pharmaceutical markets more complex, blockbuster sales less likely, and the path to success less predictable.

To respond to those trends, pharma companies and healthcare providers must move beyond incrementally improving standardized care regimens. According to the business stability model described by Andrew Boynton, Bart Victor, and Joe Pine II in Invented Here, the four systems of industrial work include the following:

Craft. This ad hoc approach requires workers to invent a new process each time they encounter a new task. Through experience, they improve and use their tacit knowledge to enhance their reputations as well as those of the groups to which they belong. Typically, the products and processes of companies with a craft organization can vary considerably, even when the same person performs tasks repeatedly and the situation remains unchanged. Sometimes called the "invention" stage, this mode is prevalent in pharma research and marketing organizations.

Mass production. Built on knowledge and experience, this approach brings standardization and discipline to work processes and results in the creation of a consistent product in high volume at low cost. This mode is most common in pharma manufacturing.

Process enhancement. This work system requires processes to be continually developed and refined into "best practices," using worker feedback and process development teams. Clinical pathways and protocols use best practice standards. So process enhancement, usually driven by employee frustration or corporate efficiency programs, could be used anywhere within an organization at any time.

Mass customization. This approach breaks down best practices into stand-alone segments known as modules. Companies can then mix and match modules to build efficient, low-cost processes that are responsive to individual customer wants and needs.

That mixing and matching, a process called co-configuration, is a mass-customization method that requires patients' and providers' joint involvement in decision making. Acumin, a multivitamin manufacturer, uses the co-configuration approach to generate custom products based on the personal needs customers express on a web-based questionnaire. It delivers each customer a two-month supply of about 20 vitamins and minerals condensed into a single daily, customized pill.

According to Victor and Boynton, the best development path for industries with a relatively limited line of goods and services is a linear progression from craft to mass production to process enhancement, and, finally, to mass customization. But healthcare, with its wide variety of diagnoses and processes, has followed a different path.

For years, the healthcare industry has used the craft approach to train physicians and operate their practices. Some sectors, such as open-heart and cataract surgeries performed at a few high-volume, specialized centers, have undergone the transformation to mass production. But because most people do not want mass-produced healthcare, the industry otherwise tends to bypass that mode. To achieve efficiencies, accrediting organizations have instead mandated and institutionalized process enhancement techniques such as outcomes-based methodology.

The 2000 US presidential and congressional elections showed the depth of adverse public reaction to the "industrialization" of healthcare. The chief targets of dissatisfaction were managed care organizations, but consolidation and integration have also affected most aspects of healthcare delivery, including the pharmaceutical industry.

As scientific information about a healthcare process accumulates, efforts shift from the craft mode to process enhancement. After the process evolves and is codified, it may shift into the mass production mode. But the approach must be sufficiently cut and dried, volume must be high, and patients must accept impersonal delivery. If those conditions are met, the process reaches mass customization. But if it still uses too much art-or too little science-to justify modularization and routine, it may return to the craft mode.

Mass Customization

The mass customization pathway can produce health services and pharma marketing strategies that are cost-efficient and meet customers' needs. Pharma companies are able to create competitive advantage by applying modular personalized health approaches to prevention and care. Information technology must be in place to support mass-customization modules so health professionals can use them interchangeably to meet a wide range of clinical situations. Those professionals still have important roles: implementing the modules and configuring them for patients' genetic variations.

Clinical pathways are one example of modularization. Companies document best practices on those pathways, which healthcare providers routinely use to meet patients' needs. A well integrated information system is necessary to give professionals access to highly specific information about each patient-back-ground, medical history, preferences, and health status--and about the optimal coordination of services.

Providers then configure care using mass-customized multibuster pharma products and services to meet individual patients' needs. And pharma marketers that deploy a mass-customized approach will give their sales organizations the tools to form provider-patient partnerships and to create product loyalty through co-configuration.

Managed care case managers configure healthcare for more complex and expensive cases. They know both the standardized procedure and the locally available resources, so they can tailor the approach to cost-effectively meet patients' needs.

Mass customization extends standardized care processes to meet consumers' demand for personalized care. Science provides the underlying knowledge that supports standardized and established care processes. Scientific evidence is necessary to legitimize conformance to care modules in an environment where professional autonomy is jealously protected. It's up to pharma company management to convince healthcare providers that they are still highly valued in their new craft roles for configuring care and for having the ingenuity and knowledge to adapt it to consumer needs and preferences.

As genomic information becomes available, it will focus diagnostic classifications, facilitating the development of distinct clinical pathways for each population segment. But new genetic marker information will not diminish the need for provider and payer systems to handle relatively high levels of variability in patients' symptom constellations, anatomy, physiology, and preferences.

Customer Loyalty

Mass customization involves not only end products but also the information that clinicians give consumers so they can make healthcare choices. Such information outreach can build customer loyalty to insurers and healthcare providers and prevent the disruption of professional relationships that can be caused by disreputable and disjointed sources and processes.

Yet, pharma companies, physicians, and healthcare insurers can re-establish their connections with consumers through information outreach customized to address individuals' health needs. (See "Evolutionary Path," page 65.) Providers win consumers' trust and allegiance by helping them bypass the sea of available information, offering instead a "safe harbor" of trustworthy data customized to their clinical situations, family settings and resources, and learning styles.

There are several ways to increase personalized data's usefulness to consumers. Companies whose customer relationships are threatened by competitive forces can compete for attention and loyalty by providing more and better content on their websites, such as including more relevant links and suggestions for new approaches to problems. Providers can also better communicate information to patients by using simpler terms, personalizing the information, or making their sites easier to navigate.

Collaboration with healthcare providers and suppliers in person or through e-mail and interactive websites enriches consumers' experience in many ways. Patient involvement in developing a customized process creates ownership and improved compliance. Capital investment in, and maintenance of, such websites is a ready-made opportunity for collaboration among pharma companies, providers, and payers.

Such web-based activities reach targeted patients and hold their interest, but they are also controversial. Such a site can be economically supported through e-commerce. But some clinicians and public health officials are concerned about the ethical conflicts presented by marrying business interests with health content. Blue Cross/Blue Shield of Michigan and PersonalPathSystems have addressed that issue with dual presentation tracks: one with medical information content and one with e-commerce activities. No advertising is allowed on the information site, but links to approved e-commerce sites are provided. That rectifies some ethical issues, but many others remain, especially regarding content providers' economic interests and transparency to users.

Customer care through such portals is also controversial because it sidesteps care from more traditional sources such as primary care physicians. Ultimately, it raises the question: Does telling someone which drugs they are most likely to tolerate with a certain disease and a certain history constitute practicing medicine without a license? Patients need doctors to write prescriptions and pharmacists to fill them, but both are available, often with no face-to-face interaction, through the internet. The question may become an objection if the approach is successful in strengthening consumer affiliations with information providers. Such a powerful web presence could decrease loyalty to-and take business from-physicians and pharmacists.

Preparing Physicians

In recent surveys, managed care executives indicated that they believe their organizations' top management understands mass-customized relationships and is likely to enact them. Although they disagreed in their estimates of how ready their companies are to implement those relationships outside disease management, nearly all were certain that their managers would eventually embrace the principles of mass customization in healthcare.

The weak link in that approach may be physicians who bolster their sagging incomes by seeing more and more patients for shorter and shorter visits, oblivious to the disruption of customer relationships already caused by web-based and direct-to-consumer information sources. If aware of that danger, they could be powerful players in the postgenome healthcare market, because patients see them as credible information sources and filters. Individually, they lack the capital to act, but collectively, they may be able to create a voice by becoming the preferred source for genetic knowledge and interpretation, by offering internet-based response services, and by engaging in the personalized care that consumers prefer and demand.

Alternative healthcare providers demonstrate how genetics and information technology might help repair damaged customer relationships. By appealing to customer's desire to control their own health, companies have launched products ranging from Acumin's web-customized daily vitamin pill to prophylactic full-body MRI scans complete with medical interpretation. Although those products and services fall outside the current reimbursement scheme, their availability will influence consumer expectations of what services are appropriate for the healthcare system to deliver.

Co-op Benefits

The most obvious activity the pharma industry could undertake collaboratively is the development of a genetic materials bank similar to bone marrow transplant registries aimed at finding donor-patient matches. Its objectives would be to

• facilitate basic studies of genetic disease corollaries

• provide pools of individuals with and without specific diseases and drug sensitivities to aid early drug studies

• provide an enlarged pool of candidates for later-stage drug trials.

Such cooperation could reduce costs, protect patient information, and identify appropriate clinical trial participants.

Companies may also cooperate in an effort to create fast-track regulatory approval processes for genetics-based drugs. The industry as a whole would benefit from convincing government regulators that, as the potential of genetics is realized, changes in the oversight process will be needed to keep pharma in the forefront of drug discovery and delivery. Presenting a united front on that issue and putting considerable industry resources and clout behind it will make positive change likely.

One trend that makes the combination of information technology and the explosion of genetic data significant to pharma is the evolution of continuous quality improvement into mass customization. That evolution presents both challenges and opportunities for the industry and for individual companies. One challenge is learning to manage a successful business in an environment of increased complexity and disintermediation. Success will require a vision that incorporates multibuster drugs and mass customization. To design and implement effective responses, pharma companies and the healthcare industry need new management skills and strong leadership. That will take time and resources, demanding that pharmaceutical executives begin preparing now with a vision, a plan, and a message about the changing environment.