When it comes to pharmaceutical manufacturing, innovation is nearly synonymous with the collective research and development (R&D) effort put out by the industry. That’s innovation writ large, a strategic imperative that has been driving drug development, especially in the decades following the Second World War.
There’s more than one industry observer remarking that innovation just ain’t what it used to be; costs have risen and innovation is stagnating. With the price tag for introducing a successful therapy reaching north of $1 billion and only 30-some new drugs approved by the Food and Drug Administration in 2012, innovation is coming at a higher premium and its progeny not delivering the spectacular returns of just a few years ago. Andrew Jack, corresponding for the Financial Times opines that Pharma innovation is in crisis and posits that Pharma has become a victim of its own success. “To some, the crisis in innovation is the result of the end of a period of ‘low hanging fruit.’ According to that view, the easier work was completed in the latter part of the 20th century, with the discovery of simpler molecules to tackle well-understood diseases,” says Jack.
Perhaps that’s true, but the patent cliff, along with increasing regulatory scrutiny, supply chain complexity and harsh market and competitive forces have also impinged on the ability of drug innovation to deliver the stunning returns of yesteryear.
Perhaps innovation in Pharma’s classical sense has waned and its returns not so “easy” to come by, but in the 10 or so years since the FDA introduced the concept of GMP, innovation is taking on a new meaning and its context is not drug development per se, but productivity improvement. Andrew Gonce of McKinsey & Company covers this supposition thoroughly in “The Other Path to Productivity Improvement” appearing in this issue. Gonce offers one forehead-banging statistic that reveals quite a bit: “Between 1987 and 2008, for example, labor productivity in the U.S. pharma industry rose by 0.7%, the lowest of any industry and less than a third of the average productivity increase across all industries.” The path for the industry to a better bottom line seems clear, rather than relying primarily on R&D investment to drive financial health and profitability, it’s time we invest in productivity improvements, leveraging partners and global assets while integrating world-class methods and process technologies to generate competitive advantage and deliver therapies that serve Pharma’s overarching mission: Saving lives.
Enter the Innovators
If the Pharma industry is the “Big Show,” its All-Stars are the innovators, technologies, knowledge leaders, enterprises, technocrats, consultants, financiers, strategists, academicians and many others, who are literally fighting every day to bring new vitality and strength to the industry, starting with the process and manufacturing continuum. McKinsey believes injecting the potential of state-of-the-art manufacturing technologies can trim drug production costs by as much as 50%. I recommend you take a few minutes and scan PhM’s cover story “All-Star Innovators 2013,” which covers standout systems and technologies this publication’s editors, readers and contributors found have the potential to deliver both dramatic and incremental gains in productivity.
Ultimately, innovation in the manufacturing space will win the day, and some companies will pursue this with vigor, investing blood (figuratively) and treasure (literally) to be successful. But behind that movement will be another class of innovators — those folks who, through pluck, talent and hard work are introducing change within their reluctant, risk-adverse organizations. The methods, the technologies and the know-how to implement world class productivity gains are available, but the will to institutionalize them in the near term is not so well-established. Those who foster the change and nurture the adoption and integration of these advancements will be the agents of change, the true All-Star Innovators.