Managing Pathways to Convergence in the Life Sciences Industry
In the life sciences industry, convergence is defined as the integration of two or more core technologies (diagnostics, devices, and/or drugs*) to create an improved health care product.
Life sciences firms are moving beyond traditional industry boundaries to create new health care solutions for patients and providers. By combining life sciences’ core technologies (diagnostics, devices, and drugsa) in innovative ways, firms are creating new technology platforms and products that offer improvements in safety, effectiveness, convenience, and value. These convergent solutions are also providing life sciences companies with new avenues for innovation, growth, and differentiation in markets characterized by increasing competition, R&D stagnation, expanding consumer demand, and pressure from payers to reduce health care costs.
Life sciences leaders considering convergence must make several strategic decisions in choosing and managing the convergence pathway. In this paper, we highlight various examples of convergence in the life sciences industry, identify the driving forces behind the convergence trend, and discuss the pathways to convergence that are seen in the marketplace today. We propose alternatives for investing in convergence under different scenarios of technological uncertainty, as well as strategies for choosing a specifi c convergence pathway, managing successful cross-sector partnerships and alliance networks, and addressing regulatory challenges.
The convergence of drugs, devices, and diagnostics is leading to innovative health care solutions and new opportunities for business growth and product differentiation in the life sciences industry.
Examples of Convergence
Device – Drug
• Drug-eluting stent that opens and prevents restenosis in coronary and peripheral arteries
• Bone grafting scaffold/sponge coated with a growth protein that promotes bone regeneration
• Implantable, programmable pump that delivers a drug or biologic in small, timely doses
• Implantable polymer wafer that releases a chemotherapy agent to a specifi c site
• Implantable neuromodulator that enables the targeted, regulated delivery of a drug or electrical stimulation
• Transdermal patch that transports drugs locally and systematically through the skin
• Pre-fi lled, metered dose syringe, injector pen, or inhaler
Diagnostic – Drug
• Screening test for the presence of a specifi c gene or protein coupled with targeted drug therapy
• Use of passive pharmaceuticals and radiopharmaceutical tracers as contrast agents for positron emission tomography (PET) scanners
Diagnostic – Device – Drug
• Glucose monitor with an insulin pump
*) In this report, the term “drug” is used to refer to any chemically- or biologically-based substance that is used for medicinal purposes. Both pharmaceuticals and biologics are implied by the term.
About the report
To realize the promise and value of convergence, firms will have to move beyond traditional industry boundaries, resolve technological uncertainties, and learn to operate within a network of companies that have substantively different business models, product life cycles, organizational structures, and corporate cultures. If life sciences fi rms can overcome these challenges, convergence seems certain to become a signifi cant driver of innovation, growth, and improvement in health care delivery and outcomes. Since most convergent technologies are in various stages of incubation and development, it is premature to estimate the impact convergence will have on industry growth and health care costs. However, early examples suggest that convergence has tremendous potential to drive new business opportunities and meet consumer demand for safer, more effective health care solutions.
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