2019 business outlook: Life sciences industry
Volume and variety of health care data to expand
INSIGHT ARTICLE |
The volume and variety of health care data should expand significantly in 2019. Specifically, we will be monitoring growth in data sources outside those collected from traditional electronic health records, including information gleaned from wearable technology and direct-to-consumer genetic testing.
Life science companies should consider how best to leverage this growing trove of information as they seek to more quickly bring effective and personalized therapies, drugs and devices to market, while simultaneously managing inherent cybersecurity risks. The global personalized medicine market is expected to reach $194.4 billion by 2024 from an estimated $92.4 billion in 2017, according to research from ResearchandMarkets.com.
Data is the fuel that powers artificial intelligence and machine learning, which both represent significant opportunities for life science. A recent study from Carnegie Mellon suggests that AI could reduce the cost of drug development by 70 percent. The technology is already capable of shortening the lead-time required to source candidates for cancer treatment clinical trials to mere weeks from years.
Data, however, also represents a liability. Not only is medical information highly regulated by HIPAA, HITRUST, GDPR and other laws, it is also extremely valuable. A 2013 report issued by the FBI estimates that medical data is 50 times more valuable than social security numbers to bad actors on the black markets of the internet. The Department of Health and Human Services estimates that hackers—not theft or careless employees—are responsible for 75 percent of health care data breaches involving 500 or more individuals.
We expect middle market companies to leverage this opportunity through strategic alliances with contract research organizations or other partners. In fact, based on a recent survey we jointly conducted with the Center for Business Intelligence, nearly 80 percent of development companies employ these relationships. Unfortunately, these arrangements do not necessarily limit the liability related to a data breach or cyberattack. The regulatory environment generally implicates partners and business associates in such incidents. We will continue to monitor the relationship between the risks and opportunities big data presents to the middle market life sciences sector in 2019 and beyond.
See more of RSM's 2019 business outlooks
Economic narratives for 2019 include continued trade tensions, more interest rate hikes and declining unemployment and wage growth.