Clinical Trials Offer Rays of Healthcare Insight. Real-World Data Promises a Floodlight
Real-world data is accelerating and enhancing the process of bringing drugs to market and making safe, effective treatment available to a wider range of patients—faster and at a lower cost.
Thorough, rigorous and defensible, clinical trials have long been the gold standard for the pharmaceutical industry. But they are just one source of data amid the unimaginable volumes generated through wearables, health records, claims and billing records, disease and product registries, and myriad other channels. These real-world data sources have always held the potential to transform the standard of care, but until recently, their inaccessibility has consigned them to the shadows.
Rapid advances in technology have the potential to shine a powerful floodlight on this mass of valuable, non-clinical trial sourced data, a development that is already starting to ease persistent bottlenecks, to identify more off-label uses for therapies and to help create a more accessible and effective healthcare system. The next few years could prove transformative for investors, vendors, patients and the healthcare system as a whole. LLR is excited by the possibilities and watching the space closely.
From single protocols to limitless possibilities
To highlight just one-use case for real-world data (RWD), look at clinical trial data that focuses on a single protocol and the specific adverse effects within a limited time period for a novel therapeutic. RWD can supplement this data to provide a more nuanced, holistic view of a drug’s potential uses, its effectiveness compared to existing treatments and the specific patient populations it can benefit by leveraging diverse real-world data sources.
Clinical trials are crucial, but RWD can tell us what the outcomes look like after five years, how treatment affects quality of life, how well it’s tolerated by specific ethnicities or genders, how it interacts in different drug combinations, and so on.
Finding ways to leverage this data will help open unprecedented possibilities in terms of expanded research, accelerated approvals, market access and enhanced safety.
Finding ways to leverage this data will help open unprecedented possibilities in terms of expanded research, accelerated approvals, market access and enhanced safety. For example, Keytruda, an oncology drug, is recognized as part of the World Health Organization’s List of Essential Medicines.1
But a sizable portion of its utilization—as much as 33%2—comes from off-label usage. Identifying these off-label uses as well as comparing Keytruda’s efficacy to other approved drugs and finding additional patients for treatment through electronic medical record (EMR) mining are just a few areas where RWD and the real-world evidence (RWE) it produces is proving invaluable to patients and caregivers alike.
The demand for RWE is accelerating
Sources of RWD are plentiful, but without effective aggregation, enrichment and analytical solutions, its utility is limited. Today, healthcare data accounts for ~30% of the global datasphere, and it’s expected to make up an even greater share in the future.3 Fortunately, new vendors are exploring ways to consolidate these traditionally fragmented data sources and turn them into RWE capable of generating meaningful insights for pharma, patients and payors.
As a result, data solutions aimed at creating RWE for life sciences are predicted to reach ~$3B in the next five years.
This trend has been bolstered by the use of RWE during the pandemic, which proved to be an effective way to accelerate vaccine testing by tracking real-world patient outcomes and measuring the efficacy of interventions.
The regulatory environment is also furthering the acceptance of RWE, with the FDA establishing an RWE framework, grants to encourage the use of RWE in clinical trials, and a formal program to improve the quality of RWE-based approaches. As of December 2023, the use of RWE in regulatory submissions has grown 120%.4
At the same time, technological advances over the past two decades have brought far more powerful computational capacity within reach, contributing to the robust growth of advanced analytics across the data solutions market for life sciences.
These accelerating forces, together with demographic and market trends that are increasing drug costs and utilization, are driving continued growth in demand for RWE and the technologies capable of producing it. As a result, data solutions aimed at creating RWE for life sciences are predicted to reach ~$3B in the next five years.5
Real-world evidence, real-world impact
RWE equips research, clinical and commercial teams with a wider range of high-validity insights, which is invaluable, considering only ~30% of trial-generated data is usable for clinical and commercial applications.6
RWE also reduces the considerable costs of developing drugs and bringing them to market. Data analytics drove a bottom-line improvement of ~5-10%7 for the pharmaceutical industry over the last 5 years, which is expected to result in global annual savings of ~$6B-$9B.7
More important than the benefits to the industry’s agility and profitability is the benefit to the patients…
But more important than than the benefits to the industry’s agility and profitability is the benefit to the patients, especially those with rare diseases and/or limited treatment options, who can access more targeted, effective therapies sooner and at a lower cost.
Data solutions for the life sciences
The life science industry is eager to leverage the benefits of RWE, and the market is ripe for data solutions focused on this area. Approximately 90% of pharmaceutical companies now have RWD/E teams,8 and RWD/E spending in pharma is expected to grow at ~8-10% in the next 4 years.9
As active investors in the life sciences and tech services, LLR has been closely watching the remarkable early impact of RWD and RWE on the pharma industry, and we believe data solutions will play a significant role in improving healthcare access and outcomes in the coming years.
Our areas of focus for investment span data solutions that support drug discovery, clinical trial optimization, market access and intelligence, HCP targeting, post-launch surveillance and beyond:
Data acquisition solutions, including vendors capable of aggregating or linking disparate datasets or who own or have access to datasets such as claims, registries and medical records, genomics, patient-generated, medical device or clinical software.
Data management solutions, including vendors offering pharma-specific platforms or environments to collect, store, process and visualize diverse data.
Data analytics solutions, including vendors offering purpose-built platforms that transform RWD into RWE and mine client data for insights across clinical and commercial use-cases and consultancies offering tech-enabled offerings around life science data and analytics.
This is a pivotal time for RWD, with companies at the frontier of unlocking the potential of healthcare data that didn’t exist previously.
This is a pivotal time for RWD, with a variety of companies at the frontier of healthcare data use cases that didn’t previously exist. Genomics companies are now leveraging RWD data to launch new precision medicine therapies. Pharma companies are prioritizing drug launches based on RWD that tracks growth of specific patient populations. RWD is being used to target the right HCPs and ensure the right drugs reach the right populations.
Data solutions for life sciences are making these use cases and many others possible by delivering software-driven insights derived from the vast volumes of available data.
Here’s the bottom line.
A clinical trial can cost up to a billion dollars and can take upwards of a decade to prove a drug safe and effective. Real-world data is accelerating and enhancing the process of bringing drugs to market and making safe, effective treatment available to a wider range of patients—faster and at a lower cost.
The use cases are endless. A drug that is trialed for a single indication can now be fast-tracked for off-label utilization. Underserved populations can be connected more effectively to the best interventions. Real-world benefits and risks can be quantified faster, more accurately and precisely. As long-time investors in pharma, we are excited about the data solutions that will help enable the pharma industry to leverage the wealth of RWD to improve both business and health outcomes.
Learn more about the LLR team, relevant investment experience and our focus on the Real-World Data Solutions sector.
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World Health Organization. (2023). The selection and use of essential medicines 2023: web annex A: World Health Organization model list of essential medicines: 23rd list (2023). World Health Organization, https://iris.who.int/handle/10665/371090.
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Yandell, Katie. “Going Off-Label,” Cancer Today Magazine, 2017, https://www.cancertodaymag.org/summer2017/going-off-label-targeted-therapy-immunotherapy/
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“The Healthcare Data Explosion, Episode 1,” RBC Capital Markets: Navigating the Changing Face of Healthcare, 2024, https://www.rbccm.com/en/gib/healthcare/episode/the_healthcare_data_explosion
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Shelley, Suzanne. “Pharma’s Business Case for RWE: Tapping the Full Value From These Insights,” PharmaExec.com, 2023, https://www.pharmexec.com/view/pharma-business-case-rwe-tapping-full-value-from-these-insights
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“Real-world Evidence Analytics Market – Global Opportunity Analysis and Industry Forecast 2022-2029,” RWE Analytics Market, Meticulous Research, 2022, https://www.meticulousresearch.com/product/real-world-evidence-analytics-market-5306
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Getz, Ken, “With Clinical Data, Less is More,” Applied Clinical Trails, 2010, https://www.appliedclinicaltrialsonline.com/view/clinical-data-less-more-0
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Reinsel, Gantz, & Rydning. “The Digitization of the World – From Edge to Core,” Data Age 2025, IDC White Paper, 2018, https://www.seagate.com/www-content/our-story/trends/files/idc-seagate-dataage-whitepaper.pdf
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Morgan, et. all, “Real-World Evidence’s Evolution Into A True End-To-End Capability,” Deloitte Insights, Deloitte, 2023, https://www2.deloitte.com/us/en/insights/industry/health-care/real-world-evidence-study.html
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“Real-World Evidence Comes of Age for Pharma: What to Learn and How to Earn,” PWC, https://www.pwc.com/us/en/industries/health-industries/library/real-world-evidence-pharma.html