* Links with IT businesses seen key to future of pharma
* Novartis, Bayer, J&J experimenting with smart technologies
* Non-traditional companies reshaping health -Ernst & Young
By Ben Hirschler, European Pharmaceuticals Correspondent
LONDON, Feb 11 Drugmakers are starting to get
into bed with information technology companies as they struggle
to prove the value of their medicines to governments and
By using smart gadgets to monitor patients in real time,
pharmaceutical companies believe they can improve clinical
outcomes and establish the cost-effectiveness of treatments.
The result, according to a report on Thursday from Ernst &
Young, will be a host of new collaborations between
pharmaceutical companies and businesses in non-traditional areas
such as computing, telecoms and even retail.
A few such tie-ups are already happening.
Novartis, for example, signed a $24 million deal last month
with U.S.-based Proteus Biomedical to create "smart pills" that
can transmit data from inside the body to monitor patients'
vital signs and check they have taken medicines as prescribed.
Bayer (BAYGn.DE) is connecting its glucometer for diabetic
children to Nintendo's 7974.OS video-gaming consoles to
promote consistent blood sugar testing.
And Johnson & Johnson's (JNJ.N) Lifescan unit has an iPhone
application that lets users upload readings from their connected
blood glucose monitors to their Apple (AAPL.O) phone.
"We will see multiple types of collaborations in future,"
Patrick Flochel, Ernst & Young life sciences leader for Europe,
Middle East, India and Africa, told Reuters.
"This movement will be driven by a focus on outcomes, which
pharma companies are more and more having to commit themselves
Big drugmakers have traditionally relied on a few
blockbuster medicines to bring in cash. But the old business
model is breaking down, and companies are diversifying into new
areas such as consumer health, as well as cutting costs and
forging more flexible alliance with small biotech companies.
The revised model is sometimes dubbed "Pharma 2.0".
But coming up next, Ernst & Young argues, is "Pharma 3.0",
in which pharmaceutical companies will increasingly look to sell
ancillary products and services linked to their medicines by
working with IT and other companies.
The new era poses some notable challenges, not least the
cultural gap between fast-moving technology companies, with
rapid innovation cycles, and a more ponderous drugs industry,
where bringing a new product to market typically takes 10 years
The prize, however, is worth fighting for. By monitoring
clinical data and ensuring that patients take the right
medicines at the right time, drug companies should be able to
demonstrate their products really work, ensuring reimbursement
by governments or insurers and helping to justify high prices.
(Editing by Will Waterman)