MSD Information Technology Global Innovation Center. Digitization and Health Information Transparency

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1 MSD Information Technology Global Innovation Center Digitization and Health Information Transparency 10 February

2 We are seeking energetic, forward thinking graduates to join our Information Technology group in Prague. As part of that team, you will help launch our new IT Global Innovation Center focused on developing and applying advanced capabilities in information sciences, information security, mobility, social media and big data. You will have the opportunity to work on global teams to identify and tackle the biggest opportunities and challenges at the intersection of healthcare, information and technology. We offer project based rotations to help with your professional development, and a flat, collaborative environment. Overall, our new Global Innovation Center in Prague offers university graduates incredible opportunities to learn from others across the globe, to challenge themselves, and to enjoy a reward that technology careers don t often bring: the satisfaction of helping to save lives. To learn more about MSD s IT Global Innovation Center: Visit our booth at Šance Job Fair on March 19 th 2014 Contact us John Westby AVP, IT Global Innovation Center Anna Dickstein Associate Specialist, Emerging Talent Rotation 2

3 We are here for one reason To discover, develop and provide innovative products and services that save and improve lives around the world. Prescription Pharmaceuticals & Vaccines Consumer Care Animal Health 3

4 And our passion is Excellence in science and healthcare innovation, with an emphasis on addressing unmet medical needs Focus on patient outcomes and anticipating customers needs Commitment to expand global access to our medicines and vaccines 4

5 Health Care Spending as Percentage of GDP United States 12 8 France Germany Switzerland Canada Japan UK Sweden Italy Australia Source: OECD Health Data Produced by Veronique de Rugy, Mercatus Center at George Mason University. The cost of patient care is rising throughout the world with little correlation to quality of care in developed countries. Nowhere is this more evident than the US. 5

6 , 2011 Snapshot There is tremendous opportunity for non healthcare firms to provide goods and services in the health industry. New entrants provide a catalyst for disruption. 6

7 Venture Capital (VC) funding for Healthcare IT companies almost doubled in 2013 and the number of VC deals more than tripled compared to New business models coming into focus. 7

8 Blueprint for Quality and Cost of Care Key Enablers Health Outcomes (the focus) Information Transparency (the need) Clinical Registry Systems (the artifact) Common Tools (data submission, auditing,...) Consulting, and Technical Assistance (for the players and communities that seek best practices) Policy and Standards (easing the path to adoption, and inter operability) Business Model (for voluntary creation of registries, tie to reimbursement) Registry of Registries (model for coordination and orchestration) Common Infrastructure (technology, data exchange, and a forum for participation) Relevant Units of Analysis (taxonomy of measurements) Visible Experiments (linkage of inter and intra organizational pilots) Lessons from model countries (e.g., Sweden) showcase a blueprint for others to follow. But approach and levers for change may be hard to replicate. 8

9 Adoption of basic EHR systems by office based physicians increased 21% between 2012 and

10 United States health information technology adoption is part of a global trend. 10

11 Path to Information Transparency? Personal Health Record Model Electronic Health Record Model Ambulance Service Hospital Primary Care Specialist A, B, n Pediatrics 1, 2, n Pharmacy Labs Payer, PBM Personal Health Patient, Caregiver, Family Physician, Practice Group, IDN, AMC, Payer, PBM Focus Of Reform Patient 1 Patient 2 Patient 3 Patient 4 Patient 5 Patient 6 Patient 7 Patient 8 Patient n e.g., Microsoft HealthVault e.g., Kaiser Permanente 11

12 Health Information Past 000 Lives (Aggregated by Leading Organizational Forms) 100,000 1st wave of Health IT was driven by insurance reimbursement and supply chain efficiencies 10,000 The standard for valuation of therapy is provided by Life Sciences in the form of Phased Clinical Trials Highly controlled Statistically significant populations 1000 Circa Administrative Services/Labs Clinical Behavioral Environmental Scientific Clinical Trials Genomics Proteomics Air Quality (I/E) Soil Exposure Water Monitoring Food-chain Physical Hazards Health Social Media Diet/Nutrition Exercise/Fitness Bio-sensor Readings Adherence to Plan Demographics Procedures/Surgeries Vaccines/Medicines Adverse Reactions Vitals/Observations Family-Social-Medical Care Plan Labs Radiology Pharmacy Physical Therapy Dental Billing Claims Case Management Basic Outcomes 12

13 Health Information Present The standard for valuation of therapy is shifting to include (post market) Integrated Health Systems More patients Inter connection of data sources Data that is good enough 000 Lives (Aggregated by Leading Organizational Forms) 100,000 10,000 Circa Circa Administrative Services/Labs Clinical Behavioral Environmental Scientific Clinical Trials Genomics Proteomics Air Quality (I/E) Soil Exposure Water Monitoring Food-chain Physical Hazards Health Social Media Diet/Nutrition Exercise/Fitness Bio-sensor Readings Adherence to Plan Demographics Procedures/Surgeries Vaccines/Medicines Adverse Reactions Vitals/Observations Family-Social-Medical Care Plan Labs Radiology Pharmacy Physical Therapy Dental Billing Claims Case Management Basic Outcomes 13

14 Patients and families are increasingly using information technology to manage health and physicians are increasingly ready to engage with them. 14

15 Health Information Futures Impact of health information and outcomes transparency over time: Episodic to continuous care Medical to wellness General to personalized care 000 Lives (Aggregated by Leading Organizational Forms) 100,000 10,000 Circa 2020 Circa Circa Administrative Services/Labs Clinical Behavioral Environmental Scientific Clinical Trials Genomics Proteomics Air Quality (I/E) Soil Exposure Water Monitoring Food-chain Physical Hazards Health Social Media Diet/Nutrition Exercise/Fitness Bio-sensor Readings Adherence to Plan Demographics Procedures/Surgeries Vaccines/Medicines Adverse Reactions Vitals/Observations Family-Social-Medical Care Plan Labs Radiology Pharmacy Physical Therapy Dental Billing Claims Case Management Basic Outcomes 15

16 The Increasingly Visible Patient Longitudinal View 0 3 Years to Maturity Digitization Measure, Monitor Patient Engagement Current View of Patient Contextual View 0 5 Years to Maturity Health Information Exchange Collaboration of Care Whole Patient Scientific View 0 10 Years to Maturity Epigenomics Personalized Medicine With each phase of granularity, the opportunities grow for patient and population wellness (secondary use). 16

17 Access to Patient Health Information 000 Lives 1, Today, pharma has few points of access to real world patient health information. Yet, insights for safety, comparative effectiveness and other areas are within this domain. Pharma owned highly controlled clinical trials data Clinical practice, patients, payers and providers own rights to the data 10 Phase IV Discovery I II III Launch Marketing & Sales Life Cycle Management Adapted from Deloitte Perspective Those that have access to the data will have an informational advantage in price negotiations, safety issues and evidence of value; those without data access will be forced to negotiate on cost alone. 17

18 Better Health Data For Better Answers Clinical Patterns What are the characteristics of patients who take drug X? with condition X? (modeling disease patterns, predictors of good and poor control, refining phenotypes and subtypes) Safety Is drug X associated with an adverse event? What is the strength of association? If someone were to perform a large scale analysis of drug X using observational data, what safety signals would be found? How can ongoing surveillance be conducted for safety signals of a new drug? What are the best statistical methodologies for determining drug outcome relationships using clinical datasets? What parameters can influence these statistical outcomes? How are clinical concepts (e.g., risk factors) defined in rich clinical datasets? Adherence What patient characteristics are associated with adherence / non adherence to drug X? How does adherence to drug X affect healthcare utilization / costs? What are the patterns of non adherence to drug X (e.g., prescribed but not dispensed, lack of follow up, intolerance)? 18

19 Range of Potential Benefits Degree of Information Transparency (Visibility and Accessibility) High Low Relationships created for today may be extended for greater potential benefits over time 1 Sense and respond to adverse events and real-world studies 3 Create commercial value through evidence-in-practice 2 Optimize clinical trials through modeling and patient recruitment 5 Enable personalized care and targeted medicine 4 Manage disease and populations based on whole patient views Offensive Strategies Defensive Strategies time Visibility and accessibility of patient health information determines the range of potential benefits over time. 19

20 Information Rules Patient Health Information is doubling every six months Participate in data flows, not stocks The value of Patient Health Information is reduced by half when taken away from the people who understand it Network collaboration, not just access Without contribution, there is no participation in data flows Incentives are based on information value add, not just monetary The data is lacking in quality, improving marginally year over year But with each marginal tick, new opportunities and innovations emerge 20

21 Strategies for the Future 1Predictive medicine Imaging & diagnostics Predictive medicines Protocol-based pathways Patient & disease segmentation Innovative Medicines Generics OTC Real-World Patient Health Information 2Personalized care Monitoring and outcome-based payment Patient support Patient adherence Behavior modification Adapted from McKinsey Perspective 3End-to-end Solutions Current Strategies New Service Strategies New Solution Strategies Instrumentation and Measurement Data Harmonization Analytics and Informatics Health information transparency will provide the currency for new innovations in predictive medicine and personalized care. 21

22 R&D Pharma Scientific Leaders Regulatory Agencies Clinical Subjects Clinical Investigators Policy Makers Retail Wholesale Distributors Employers Government Payors Pharmacists Communities Of Practice Journalists Providers Hospitals Key Opinion Leaders Practice Groups Nurse Practitioners Specialists Primary Care Patients Healthcare Ecosystem Caregivers Patient Groups Non healthcare Firms Start Ups Academia Adding new processes, governance structures and relationships allows for co evolution of health care markets and business models. 22

23 This new strategy will allow us to build better connections between Merck and our customers. Pharmacies Consumers Providers Payers 23

24 Each one of us needs to ask: Do I have what it takes to make this happen? 24

25 MSD IT: playing our part in making a difference in healthcare globally through our innovative medicines, vaccines, biologic therapies, consumer care and animal health products. 25

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