1.
When the human body is
the biggest data platform,
who will capture the value?
Medical Affairs Professional Society
26 February 2018

2.
Page 2
As a patient/consumer
As a policymaker
As a physician/care provider
As a biopharma or medtech
As a payer
How can I get the right, affordable treatment and support to
be healthy?
How can I have a transparent market with a balance of health
improvement versus cost?
How can I deliver the most cost-effective treatment to achieve
health improvement?
How can I get appropriately paid for providing the right
treatment solution?
How can I provide the most cost-effective health solutions to get
impact, and transition to them?
What do industry stakeholders really want?
Progressions 2018: Life Sciences 4.0

3.
Page 3
We are entering a fourth industrial revolution … a fusion across
the physical, digital and biological worlds
Source: EY, World Economic Forum.
Artificial intelligence
• Drug discovery
• Diagnosis
• Patient monitoring
Device miniaturization
• Smart tattoos and bandages
• Digital pills
• Medical-grade wearables
Health care
technology
Internet of everything
• Smart appliances
• At-home diagnostics
• Connected clothing
Robotics and automation
• Robotic surgery
• Robotic caretakers/caregivers
• Exoskeletons
Blockchain
• Patient medical records
• Drug supply chain integrity
• Clinical trials
3-D printing
• Bioprinting — organs, bones, teeth
• Surgical instruments
• Devices, e.g., pacemakers
Cheaper computing
power and storage
• Private data cloud
• Big data analytics
Automated delivery
• Drones
• Self-driving cars
Genetic technologies
• Low-cost genetic
sequencing
• Gene editing
Augmented reality
• Connected eyewear
• Operating room of the future
Progressions 2018: Life Sciences 4.0

4.
Page 4
Uninformed patients, payers
and providers
Disconnected health care
Blockbuster drugs
Sick care
Enhanced stakeholder demands and super consumers are
redefining health
Connected
health care
Integrating health care data; “man and
machine” delivering better interventions
Super
consumers
Patients, payers and providers
empowered by data
Health
care
Focusing on prevention and
addressing affordability
Precision
medicine
Mining data to deliver tailored medicine
Progressions 2018: Life Sciences 4.0

5.
Page 5
Technology advancement and disruption are creating
opportunities for power to shift among stakeholder groups
* “Other sectors” includes retail, technology, manufacturing and industrial products, and consumer products.
Biopharma and medtech
Patients/consumers
Physician/care provider
Payers
Policymakers
Other sectors*
Traditional power Future power Power shift
Progressions 2018: Life Sciences 4.0

6.
Page 6
Customers
Payer
Physician/care provider
Policymaker
Patient/consumer
Payer
Physician/care provider
Policymaker
Patient/consumer
Payer
Physician/care provider
Policymaker
Patient/consumer
Payer
Physician/care provider
Policymaker
Patient/consumer
Forces • R&D productivity
• Patent cliff
• Regulatory hurdles
4.0
Life Sciences
3.0Health
outcomes
Life Sciences
2.0Diversified
portfolios
Life Sciences
1.0Blockbuster
products
Life Sciences
Data-driven
platforms
• Provider/payer
consolidation
• Empowered patients
• Reimbursement
pressures
• Speed of technology
advancement
• Super consumers
• Aging populations and
chronic disease
Personalized experiences, products or services will be
increasingly demanded – Life Sciences 4.0
Progressions 2018: Life Sciences 4.0

7.
Page 7
Future value will be captured by those who can fuel innovation
by unlocking the power of data through platforms
Future
value
Innovation
Outcomes x Personalization
For people
For physicians
For payers
For policymakers
Participatory
Precise
Predictive
Proactive
Data streams Traditional and
nontraditional
partners
Platforms
of care
(Connect + Combine + Share)
=
FV=ID
Data
Building Life Sciences 4.0
Progressions 2018: Life Sciences 4.0

8.
Page 8
Technology giants are already significantly investing in health,
blurring the lines between health and technology
Source: EY, United States Patent and Trademark Office. Analysis as of 31 January 2018. Analysis is based on year of patent filing filtered by company for select search terms in the patent abstract or claim: health, medical, patient, disease,
wellness and physical activity.
9
14
19
128
21
28
7
9
48
23
42
40
33
0
20
40
60
80
100
2013 2014 2015 2016 2017
Alphabet
Microsoft
Apple
Progressions 2018: Life Sciences 4.0

9.
Page 9
The challenge: health data is siloed across stakeholder groups
and within organizations
Biopharma
and medtech
companies
Physicians
and
hospitals
PayersPharmacies Laboratories
Consumers
and
caregivers
Governments
and
NGOs
• Preclinical
research
• Clinical
trial data
• Biomarker
analyses
• Post-market
analyses
• Health record
data
• Hospital
admissions
• Longitudinal
patient
outcomes
• Product sales
• Script volumes
• Medication
adherence
• Diagnostic
results
• Biomarker and
genetic
assessment
• Claims data
• Actuarial
analyses
• Cost data
• Cost data
• Demographic
data
• Biomedical
data
• Environmental
data
• Social media
commentary
• Sensor data
• Quantified
self/fitness
tracking
Progressions 2018: Life Sciences 4.0

10.
Page 10
As health data is aggregated, more advanced platform
opportunities will emerge, placing the consumer at the center
Therapeutic-specific platforms of care
E M E R G I N G
Supra-platform aggregation
F U T U R E S T A T E
.
Point solutions
E V O L V I N G R A P I D L Y
Company
1
Genetic
testing
Multiple
sclerosis
Healthy
aging
Depression
Diabetes Asthma
D A T A
Asthma
Heart
disease
Company
2
Rheumatoid
arthritis
Oncology
Kidney
disease
Diabetes
DepressionHealthy
aging
Diabetes
Health
and
fitness
AsthmaHeart
disease
Company
3
P A T H 1
Companies
contribute solutions
to create a platform
in a specific
therapy area
Diabetes
Company
2
Company
1
Company
5
Company
4
Company
6
Company
3
P A T H 2
The individual is
surrounded by
multiple platform
solutions in the same
therapy area
Asthma
5
P A T H 3
The individual is
surrounded by
multiple platform
solutions in different
therapy areas
DepressionHealthy
aging
Diabetes
Health
and
fitness
Asthma
Heart
disease
Asthma
6
Asthma
1
Asthma
2
Asthma
3
Asthma
4
Rare
disease
Heart
disease
Genetic
testing
Depression
Rheumatoid
arthritis
Multiple
sclerosis
Oncology
Kidney
disease
Hospital
of future
Healthy
aging
Health
and
fitness
Progressions 2018: Life Sciences 4.0
D A T A

11.
Page 11
The health care business of today has arranged itself in a
combination of four basic business models
Breakthrough
innovator
Developer of
best-in-class
products that
command high
prices and are
primarily paid for by
health insurance
Disease
manager
Developer of
products and
solutions to manage
chronic conditions
end-to-end
Efficient
producer
Developer of
“good enough”
products that are
cheaper than
the competition
Lifestyle
manager
Developer of
products aimed at
prevention and
overall health
maintenance sold
directly to
the consumer
Progressions 2018: Life Sciences 4.0

12.
Page 12
How is
value
created?
High
dollar
value
capture
Low
dollar
value
capture
Who demands value?
Wealthy
individuals
Highly
innovative
products
and
services
Institutional
health care
systems
Efficient
operations
and supply
chain
Mass
market
consumers
Customer
understanding
and
relationships
Breakthrough
innovator
Efficient
producer
Disease
manager
Lifestyle
manager
Optimal value will come when companies create products and
services to match demands from different customer segments ...
Source: EY. Concept developed from an
initial idea first profiled by Prof. Brian D.
Smith in his book, The Future of Pharma,
published by Gower Publishing in 2011.
Progressions 2018: Life Sciences 4.0

13.
Page 13
… creating opportunities for platform technologies
Breakthrough
innovator
► Scale in
digital capabilities
► External
collaborations
to access
emerging science
► Services to
provide customer
engagement and/or
integrated data
capture across the
value chain
Disease
manager
► Consumer-facing
solutions based on
individual preferences
► Behavioral science
skills to influence
adherence
► Understanding of
disease risk to
optimize care for those
at greatest risk
Efficient
producer
► Predictive analytics
capabilities to
improve inventory
management,
distribution
and forecasting
Lifestyle
manager
► Systems that
promote frictionless
customer engagement
► Algorithms
to anticipate
consumer needs
Progressions 2018: Life Sciences 4.0

14.
Page 14
Agile networks, often short term, will deliver complementary
skills to core offerings
Source: Specific extract from EY research. Based on sample data; non-exhaustive.
Digital or new entrant
Life sciences company
Technology incumbent
Other
Progressions 2018: Life Sciences 4.0

15.
Page 15
0
50
100
150
200
250
300
350
400
450
1 2 3 4 5
Source: EY; Fortune 500. The Fortune 500 is an annual list published by Fortune that ranks companies by total revenues for their respective fiscal years. Companies included in the directory are incorporated in the US, operate in the US, and
file financial statements with a government agency. The 2018–2023 estimate is determined by extrapolating linear or exponential trend lines in Microsoft Excel.
AveragenumberofnewcompaniesaddedtotheFortune500
If there is any doubt … without intervention, companies in the
Fortune 500 will be displaced
Linear forecast Exponential forecast
Progressions 2018: Life Sciences 4.0

16.
Page 16
Progressions 2018 – Life Sciences 4.0
Securing value through platform based businesses
Future
value
Innovation
Outcomes x Personalization
For people
For physicians
For payers
For policymakers
Participatory
Precise
Predictive
Proactive
Data streams Traditional and
nontraditional
partners
Platforms
of care
(Connect + Combine + Share)
=
FV=ID
Data
Building Life Sciences 4.0
Progressions 2018: Life Sciences 4.0

17.
Conclusions
► To create future value, life sciences companies must determine how they
can seize the upside of disruption in today’s transformative age.
► The ubiquity of data and analytics creates new opportunities for life sciences
companies to rethink innovation and create personalized health outcomes
that the wider ecosystem of health stakeholders are now demanding.
► Platforms that connect, combine and share data will be a central enabler
of this future value creation.
► These platforms create a mechanism for companies to quickly and safely
tap into diverse data streams and link them to scientific and clinical data.
► Companies will also need to consider developing new capabilities linked
to customer engagement, personalization and data literacy that are central
to emerging platforms of care.
► Life sciences companies can access these capabilities by building them
organically or through flexible partnerships or acquisitions.
Progressions 2018: Life Sciences 4.0Page 17

18.
EY | Assurance | Tax | Transactions | Advisory
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How EY’s Global Life Sciences Sector can help your business
As populations age and chronic diseases become commonplace,
health care will take an ever larger share of GDP. Scientific progress,
augmented intelligence and a more empowered patient are driving
changes in the delivery of health care to a personalized experience that
demands health outcomes as the core metric. This is causing a power
shift among traditional stakeholder groups, with new entrants (often not
driven by profit) disrupting incumbents. Innovation, productivity and
access to patients remain the industry’s biggest challenges. These
trends challenge the capital strategy of every link in the life sciences
value chain, from R&D and product supply to product launch and
patient-centric operating models.
Our Global Life Sciences Sector brings together a worldwide network of
15,000 sector-focused professionals to anticipate trends, identify their
implications and help our clients create competitive advantage. We can
help you navigate your way forward and achieve sustainable success in
the new health-outcomes-driven ecosystem.
© 2018 EYGM Limited.
All Rights Reserved.
EYG No. 01382-184GBL
1711-2486204
ED None
ey.com/lifesciences
This material has been prepared for general informational purposes only and is not intended to
be relied upon as accounting, tax or other professional advice. Please refer to your advisors for
specific advice. The views of third parties set out in this publication are not necessarily the
views of the global EY organization or its member firms. Moreover, they should be seen in the
context of the time they were made.