Advanced Analytics: Good Medicine for Life Sciences
Deloitte Insights video
With an exorbitant number of compounds going off patent, life sciences companies have to learn how to do more with less. Data analytics can help focus investments, minimize expenses and stop problems before they start.
Tune into this episode of Deloitte Insights to learn more about the role of advanced analytics in the life sciences industry.
- Jeremy Perisho, a partner and leader of the Health Sciences Industry Group, Deloitte Financial Advisory Services LLP
- Scott Evangelista, a principal and national commercial practice leader of the Health Sciences Industry Group, Deloitte Consulting LLP
Transcript: Advanced Analytics for Life Sciences
Sean O’Grady: Hello and welcome to Insights. Today, we are discussing the role of Advanced Analytics in the field of Life Sciences and joining the discussion is Jeremy Perisho, a Partner and Leader of the Health Sciences Industry Group at Deloitte Financial Advisory Services LLP and we have Scott Evangelista, a Principal and National Commercial Practice Leader for the Health Sciences Industry Group at Deloitte Consulting LLP. So, to begin folks, why do we think Business Analytics is good medicine for the Life Sciences field?
Scott Evangelista: Life Sciences is under a tremendous amount of profit and revenue pressure right now. There are an exorbitant number of compounds that are coming off patent. When they come off patent, their margins shrink. So, the companies are having to learn how to do more with less and in order to do that, they need analytics to help focus return on investment and focus their investments in how they are going to get that return and analytics is really the key to that.
Sean: And Jeremy, your thoughts?
Jeremy Perisho: Great. I guess I would expand upon not just the investment side, but also on kind of the cost side. There are so many improper payments that are out there for a company. You think about when you buy something in a store and that there is a probability that being mismarked or mispriced. Large organizations like a life science company with multiple manufacturers and distributors, the volume of information is so much more and so you really end up with a bigger opportunity to have this improper payments. And so, data analytics helps you maximize the ability to look at that closely and minimize the expense.
Sean: Now Scott, where do you think Life Sciences Company should consider applying analytics in an effort to get the most value?
Scott: There are number of analytic techniques and we are really thinking about and talking about Advanced Analytics, the idea of predictive modeling and understanding where the business is going to go. Specifically, they should be looking at optimization techniques to again balance the resource invested. Today and historically, companies have deployed their most expensive marketing resource in sales force and they deploy that fairly uniformly across the country. The fact is that physicians react differently to different inputs and it is important to focus the sales reps to the most important and the biggest expense in the area where it will do the greatest good. And you don’t need them evenly spread throughout the U.S. and today that is how it has been done. Advanced Analytics gives us the ability to focus those investments very narrowly around specific parts of the country where quite honestly we will get the greatest return for the investments that are made.
Sean: Now for my next question, I want to start with you Jeremy and then we can head over to you Scott and that is, what are some of the challenges that Life Sciences Companies are facing right now?
Jeremy: I think, as Scott mentioned earlier, there are obviously the patent cliffs and so, with that, it needs to kind of contain and maximize both value and kind of contain cost. And so, when you look at the analytics, it is really important to have the management and upper management embracing what you can do with those analytics.
Sean: And Scott?
Scott: I would have to underscore that. The companies that I am working with who are really moving the needle with analytics and moving their business are doing so because leadership has decided that there are going to get into fact-based decision making. Marketing is a science, it is not an art and analytics supports the scientific look at how to do their business and leadership is everything there.
Sean: My last question is about transparency. There has been an awful lot of coverage about health care fraud and the need for transparency, especially around aggregate spend. Can business analytics help there, Jeremy?
Jeremy: Without a doubt. If you think about it, transparency just results in more data being available and so when data is available, you have to understand your audience and you have to know your data. And your audience can be government and it could be government enforcement. And with the desire and need of the government to really focus on the budget, one of the big drivers for increasing revenue from a budget perspective is enforcement. Since your audience is bigger and has a little bit more of a stick, when you look at the benefit of the analytics is that it can help you know your data well enough to minimize the risk of that enforcement.
Sean: Scott, any final thoughts on transparency?
Scott: Yeah, I think another technique in signal detection and really what Jeremy is referring to is the ability to detect a problem before it becomes a problem and to know within the spending you are doing and how you are doing it. If you can pick up things that you think seem off or you think that the government or anybody may look (?), your ability to remediate that in advance of a problem developing saves a tremendous amount of money. So, the analytics applied to that data can be a significant insurance policy, if you will.
Sean: So, they stop problems before they start. You have been listening to Jeremy Perisho from Deloitte Financial Advisory Services LLP and Scott Evangelista from Deloitte Consulting LLP. If you would like to learn more about Jeremy, Scott, or any of the topics we discussed on this broadcast, you can find them and many more on our Web site. It is www.deloitte.com/insightsus
For all the good folks here in Insights, I am Sean O’Grady. We will you see next time.