A complete overhaul of the NHS' operating model is needed in order to deliver better patient outcomes and care at lower costs, and key to this transformation will be partnerships with the life sciences sector, says a new report.

Hard questions need to be asked if the NHS is to get the support it needs from the life sciences industry, says the study, from professional services company KPMG, which urges the life sciences sector to align its interests by partnering to share costs, data and risk to improve the value and effectiveness of the therapies offered to patients.

"Life sciences companies have reached a crossroads," says Chris Stirling, global head of life sciences at KPMG. "Spend on medicines now accounts for just 9% of total healthcare spending in the UK and, with the global economic downturn creating persistent downward pressures on pricing, there is an urgent need for the industry to respond. One option is to focus on research so that better drugs are developed, but with healthcare services demanding more immediate support, it's an option that is far from practical," he cautions.

Instead, the report urges the industry to adapt to the changing healthcare environment by adopting the following three-point strategy:

- reshape R&D to provide reimbursable drugs and devices that deliver shareholder value. The industry should consider whether it is investing in the development of the right drugs at a cost that will allow satisfactory pricing for the new healthcare environment as well as a return on investment (RoI) that is acceptable to shareholders;

- understand the changing customer base. It is no longer enough to focus attention on the prescribing physician. In today's environment, life sciences companies need to become better at identifying who their new customers are, what they want and how they want it delivered; and

- anticipating shifting power structures in the wider healthcare ecosystem. While more time is needed to understand the competing priorities that the NHS faces as it navigates the current landscape, inaction is not an option. Without properly managing the impact of clinical commissioning groups (CCGs), the adoption of mobile heath (mHealth) or the growth of IT and Big Data, the industry - and UK healthcare - will suffer.

For example, says KPMG, the industry has hardly begun to impact patient access to digital information about health. And companies' "massive repositories" of marketing, market research, sales and social media data could be used to uncover actionable insights about patients, healthcare professionals or the behaviour of payers and providers that could be invaluable in supply chain analysis.

"In the 'old world,' the customer was usually the prescribing physician, but today it can be anyone from CCGs to the hospital, or the patient. As patients become more informed about, and involved in, decisions about their care, the life sciences industry will need to address whether it is focusing on the right drugs at the right price," says Mr Stirling.

The report also notes that poor patient compliance is a major source of inadequate outcomes. The issue here is the contrast between the efficiency established in randomised controlled trials (RCTs) where patients are closely monitored to ensure adherence, and real-world effectiveness, which is usually lower because many patients stops taking prescribed therapies after a time.

Progress to improve compliance could come through smartphone apps, designed to help patients stick to medications schedules, it suggests. These could also incorporate drug interaction information as well as disease awareness and lifestyle advice, depending on the view of individual country regulators.

"Finding ways to help improve patient compliance with drug therapy would be one of the most effective ways of improving the value of the medicines themselves and also aligns the interests of the industry with those of the patient, healthcare profession and provider - a win for all invested parties," it advises.

According to Mr Stirling, there are signs that changing attitudes to healthcare provision are having a positive effect, with returns on R&D investment beginning to improve. However, he goes on: "more time needs to be invested to understand the competing priorities that healthcare systems face."

"The simple fact is that hard questions still need to be asked about what products are being developed, how their use is monitored and how they will be positioned to deliver value as the NHS evolves," he says.