Many world-leading pharma companies had humble beginnings. Roche was built on cough syrup. Novartis made fabric dyes. Pfizer produced citric acid. Fortunes were built on basic chemistry and simple business models, with products that would sell themselves.
Centuries later, science has moved on, but the model stays the same. Head down, follow the science, make a discovery, sell it at volume. Rinse and repeat.
Quite unwittingly, this model is now being retired. Broken health systems are patching themselves up, and the healthy distance pharma tried to keep from its customers turned out to be a vacuum, with new players rushing in to make their mark and take their cut.
So in this new world, what is a pharma company for? To stay relevant, pharma companies need to embrace their broader mission: improving healthcare.
I see two big parts to this endeavor: pushing the inside out and bringing the outside in.
Pushing the inside out: Embracing the limelight to understand what people really want and need
Pharma is a shy industry. Stung by cynicism and controversy, pharma companies have typically shunned attention from all but select academics, healthcare professionals, and shareholders.
Now the spotlight is inescapable. COVID has made household names of pharma companies and proved it is hard to blend in when the global economy depends on your success. Besides just reputation, the ‘gamification’ of investing also means public perception can make or break a company. Just see the meme-tastic Gamestop saga, and the seemingly unstoppable rise of Tesla (currently trading for nearly 1,000 times earnings) thanks in no small part to showmanship.
To embrace the new limelight, pharma must measure its success with outward-facing metrics reflecting this higher purpose to improve health. We can adapt our approach to R&D to focus less on the speed of access to the market, and more on the impact of access to the patient. With this broader thinking, access is not seen simply as a step following R&D, but the ultimate objective of both. Likewise, patient support programs are no longer decoration to increase sales, but an indispensable link to understand and service our ultimate customers.
Taking this approach, pharma companies can be a strategic partner to health systems, not just a vendor.
Bringing the outside in: Discovery is a team sport about much more than technology
Pharma companies typically think in decades, as that is how long it can take to develop new medicines. This worked well back when most companies relied on a handful of unique medicines that would sell themselves. The game was simple, reliable, and lucrative.
The rules of the game are being re-written in a much shorter time frame, with or without the industry behemoths. Health systems frustrated by waste (which pharma has built fortunes on) are tightening their belts, applying value-based healthcare principles to ensure they are paying for better patient outcomes, not simply more drugs.
Beyond pharma’s familiar stomping grounds, China is maturing as a source of innovation and global competitive force, proving a reliable source of surprises (see Gracell, who aims to shorten CAR-T manufacture from a fortnight to same-day) despite western scepticism. Similarly, digital therapeutics are moving from fringe curiosity to meaningful business opportunities. Mental health alone will be worth $16 trillion by 2030.
Here, the challenge for pharma is not the technology per se. The challenge is recognising the value of things outside the norm, and forming meaningful two-way relationships that require speed, long-term thinking, and no small amount of courage.
Science and drugs will always be at the heart of pharma. However, staying relevant requires applying the same diligence and discovery mindset to the human problems as we have to the biochemical.
The easy fixes are gone. There are only hard problems left. Solving those requires companies to adopt a more fluid definition of discovery.
Who knows, in another hundred years perhaps the next big gene therapy will look as pedestrian as cough syrup. Then, as always, the value of companies will be in finding new ways to improve health like no one else can, by any means necessary.