Emerging Themes in Pharma
The digital revolution is well under way for pharma companies. We spoke with 20 leading executives to find out how they cope—and what they do to stay ahead.
These are some of the emerging themes in pharma directly related to the digital revolution shaping up the pharma industry:
- Dramatic changes in the traditional roles and dynamics of healthcare stakeholders have fundamental implications for pharma companies.
- It is time to reimagine them as solutions companies, not asset companies.
- The technology is ready, but pharma companies must change if they are going to enable and harness it more successfully.
These themes strongly suggest that success in the new digital environment will require three big shifts: forging ahead beyond the pack mentality and embracing experimentation and risk taking, developing a collaborative culture and challenging barriers to sharing, and reinventing companies by building capabilities beyond traditional healthcare and updating the operating model.
- Individuals are starting to control their own health treatments
- The clinical environment will change fundamentally
- Patients’ brand loyalty dwindles as cost consciousness rise
- Pharma companies will lose exclusive control over their value stories
Technology is ready, but pharma companies must change to enable and harness it
Our interviewees agreed that technology itself is not what hinders the pharma companies’ full-scale adoption of digital health technology. “Lots of people say there are technical challenges to integrating different medical-record systems, but I don’t think that’s true,” says Dr. Krishna Yeshwant of Google Ventures. “I struggle to see what the tactical limitations are from an IT perspective.”
That said, new technology often faces strong organizational barriers, such as mind-sets that resist IT change and conservative cultures that base decisions on perceived risks. These cultures often lack compelling incentives that reward employees for behaving in new ways by moving beyond the core. Their business structures discourage risk sharing among stakeholders. The performance metrics of most pharma companies connect directly with the bottom line and the current P&L, not with innovation, customer engagement, and future strategy.
As a result, these companies generally try new approaches or technologies only when they see their peers doing so. Most of the digital leaders we interviewed, like Kara Dennis, managing director of Medidata’s mHealth unit, believe that “every one of the required technologies exists or is almost there and largely good enough. The challenge is in pulling the new technologies and processes together for an integrated clinical trial, and this will require life-science companies to remove organizational barriers to change.”
Nevertheless, virtually all of the thought leaders agreed that pharma’s old model must change and new blood must enter the system. The good news is that they see some pharma companies starting to value nontraditional skill sets—hiring marketers from other industries, such as retail, and building strategic relationships with creative agencies.
Dr. Amy Abernethy of Flatiron Health says that pharma companies need to double down on talent that truly understands science and health data. Some examples? “People like clinical informaticists who know how to work with electronic health-record data, clinicians who understand the science and didn’t just drop out of academia, or data scientists who aren’t just the IT guys in the basement but are business partners with the senior leaders.” Whether pharma companies choose M&A, strategic partnerships, or organic incubation and experimentation, they must find a way to adapt and evolve quickly. If they don’t, third-party players more willing to take risks, chart the course, and listen to consumers could supersede them.