Next-Generation Innovation

Streamlined strategies secure pharma’s future as the industry thinks outside the pill box

By Karen Langhauser, Chief Content Director

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As drug pricing reaches what some might argue is the height of public and political scrutiny (thanks Martin Shkreli), consumer expectations rise, and the blockbuster model continues its well-documented demise, the market has made innovation mandatory for the pharmaceutical industry. Bottom-lining it, PcW stated in its “Managing Innovation in Pharma” report, “the rewards for success are high and the risks of failure can threaten a company’s very survival.”

To say that the pharmaceutical industry lacks innovative ideas would be doing a tremendous disservice to an industry that has sustained decades of respectable growth along with a healthy list of historic medical achievements. More recently, the last five years of Thomson Reuters Top 100 Global Innovators lists consistently report pharma as one of the largest industry sectors represented.

Rather than isolated examples of innovation in the form of single new molecules, today’s market calls for next-generation innovation in the form of innovation strategy.

For many drug manufacturers, innovation strategy involves streamlining an increasingly complex manufacturing system. This type of next-generation innovation wades through the growing sea of new ideas and emerges with the strategies that deliver a clear, focused value. How does this play out in pharma in 2016? In the form of targeted acquisitions and partnerships, personalized treatments, efficient outsourcing partners and properly integrated technologies.

Delivering authentic innovation in today’s pharmaceutical environment is a momentously complex task with one very succinct emphasis. That emphasis, according to Dr. Clive Meanwell, CEO at The Medicines Company and recent recipient of the 2016 Dr. Sol J. Barer Award for Vision, Innovation and Leadership, is a “sharp focus on what customers really need.” 

PwC’s Health Research Institute’s annual report predicts that 2016 will be the “year of merger mania” in healthcare, specifically mentioning the pharmaceutical and life sciences sector. According to the report, “drug companies are looking beyond traditional M&A by acquiring ‘beyond-the-pill’ products and services to bolster their portfolios and pipelines of drugs.”

Consolidation has typically been a dirty word in pharma and rarely appears in the same sentence as innovation. But a handful of forward-thinking companies are recognizing the need to innovate beyond merely acquiring new molecule formulations. Dwindling (though definitely not gone) are the days when pharmaceutical companies would hunt for deals to boost up specific therapeutic areas, aiming to completely dominate that space. Under immense pressure to optimize performance, today’s companies are taking a heavy look at the systems and services behind these new drugs and making strategic acquisitions with an eye toward innovative services and digital technology. 

  Download the Best of Pharmaceutical Manufacturing eBook for the most-read articles of 2016.  

Teva Pharmaceutical made a strong move in the digital space in September with its purchase of smart inhaler company, Gecko Health. Prior to that acquisition, Teva, in collaboration with Phillips Healthcare, launched Sanara Ventures in Israel. The collaboration will invest approximately $26 million to support 40-50 early-stage digital healthcare and medical device companies in the next eight years. 

The last few years have seen numerous innovative crossovers as pharma looks toward unconventional partnerships, specifically in the tech field. In 2014, Google’s R&D business, Calico, partnered with AbbVie to focus on age-related diseases. Around the same time, Google X Labs teamed with Novartis to develop glucose monitoring, smart contact lenses and early last year, partnered with Biogen to explore wearables technology in multiple sclerosis.

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