Oncology treatments used to promise some of the highest returns for pharmaceutical manufacturers. But spiralling R&D costs, shorter product lifecycles, fragmented patient markets and pressure on healthcare budgets are changing the industry’s status quo, threatening revenues and opening the door to new entrants.

Value-based pricing is on the rise, as cash-strapped healthcare providers attempt to cut costs. At the same time, technological advances are uncovering smaller oncology patient subsets based upon genomic and other forms of profiling.

As they enter the age of personalized medicine, oncology manufacturers are witnessing a dramatic reduction in eligible patient populations for novel treatments, reducing the potential for individual therapies and intensifying competition.

The age of the “one-size-fits-all” oncology therapy is ending, and with it the blockbuster model that has for so long driven shareholder value.

This paper analyzes how current business models can be adapted to mitigate the effects of a changing oncology paradigm. We discuss how companies can experiment with value and outcomes-based pricing models, enter high growth markets, embrace patient centricity and make more of big data.

We also argue that three broad business archetypes will predominate in the oncology market:

• Active Portfolio Company: flexible and agile businesses, moving quickly to take advantage of opportunities and constantly optimizing the portfolio.
• Niche Specialist: predominantly smaller entities, focused on a specific therapy area or disease.
• Virtual Value Chain Orchestrator: companies that use platforms to become the primary point of contact for patients and own the customer relationship.