Large rise in pharma spend on apps and web

Progressions: Building Pharma 3.0, a report published by Ernst & Young, shows that in 2010 pharmaceutical companies increased their investment in digital, including mobile phone apps, social media, educational websites and wireless devices, by 78 per cent. 

The report defines "Pharma 3.0" as a shift by the pharmaceutical industry from its traditional role of producing new medicine to the evolution of a new role demonstrating improvements in health outcomes and creating innovative new business models.

A substantial number of non-pharma companies have collaborated with industry on these initiatives. Data from the report estimates that at least $20bn has been invested in the Pharma 3.0 business model by non-pharma, in comparision to significantly lower financial input from the pharma companies themselves.

"New entrants to the healthcare industry are clearly committing much more to business model innovation than pharma companies," said Carolyn Buck Luce, global pharmaceutical leader at Ernst & Young. 

"The companies that succeed in this new healthcare ecosystem will do so by developing innovative outcomes-focused offerings through structured, systematic and scalable approaches to business model innovation. Just as importantly, pharma companies should demonstrate to new players in the healthcare space why the unique insights they can provide related to patient outcomes will make them indispensable partners."

A large proportion of pharma's 3.0 investments have been in mobile health technology – particularly smart phone apps. The report shows that by 2010, investment in mobile apps accounted for 50 per cent of all new initiatives, an increase of 34 per cent compared with the period 2006 to 2009.

The full report (pdf) is available from Ernst & Young.