Direct observation and thorough understanding of customer needs power innovation in pharma. The best ideas will often percolate from the bottom, but will have more impact if those at the top disseminate them.
Commercial innovation in pharma can be defined as the implementation of new ideas that have sustained commercial impact. New solutions must have value to customers and business, and can’t be ‘one-off’ initiatives. Although innovation in the pharmaceutical industry has traditionally been associated with R&D, the significant changes in key customers and the emergence of new markets call for novel commercial models that can resist increasing cost pressures and anticipate competition from other industries that want a bite of the healthcare cake.
Partnerships are one of the solutions
“We need to partner with other industries aggressively but thoughtfully”, said Wim Vandenhouweele, Executive Director, Emerging Markets, Commercial Innovation at Merck. ‘We need to keep moving beyond the traditional approach; otherwise the others [e.g. IT] are going to eat us. Pharma need to dramatically increase focus on the broader healthcare ecosystem to remain competitive and perhaps even shape that ecosystem.”
Partnerships with other industries not only allow pharma to maximize its potential and draw from external experience and expertise, but they also increase the industry’s value proposition, helping to improve public health.
We need to partner with other industries aggressively but thoughtfully".
"A partnership may mean that a company can create something with more impact than it might have individually,” Vandenhouweele remarked. Big data is an example of an area in which companies from two distinct industries can benefit by coming together.
“[The technology sector] can bring insight into data analysis and approaches to connecting with patients. And pharma understands how to function in a highly regulated environment and how to get products and services approved,” he said.
Encouraging innovation requires identifying what stops people from approaching challenges creatively. Vandenhouweele identified six key barriers that prevent many companies in the pharmaceutical or biotechnology industries from embracing novel solutions.
1. Insufficient time to tackle a problem,
2. Lack of financial resources,
3. Inadequate supply of ideas,
4. Poor recognition from senior leaders,
5. The need to function in a highly regulated environment, and
6. Know-how about how to execute innovation experiments efficiently and effectively.
To address these barriers, Vandenhouweele put together a set of solutions. For example, to avoid problems with compliance and regulations, he proposes that the compliance division of the organization be involved in the development of an idea very early in the process. “That way, as early as the formation stage, an idea can be driven in the right direction”, he said.
[Some of those organizations] set aside two hours every other Friday when you don’t do anything traditionally work-related. It’s not massively time-consuming, but it can generate innovative approaches".
Seemingly most difficult to overcome, the lack of resources can be innovatively circumvented. For example, the organization could consider reallocating the time spent by a product manager in the field. “[A product manager] typically goes into the field once or twice a month to join a representative to meet 6-8 customers. Instead of doing that, they could be encouraged to spend a day with one customer to observe the problems they really encounter. Innovation can only come from deep understanding of the customers’ challenges and needs".
In addition, Vandenhouweele proposed, companies within pharma could follow the lead of organizations in other industries, that set aside time once a week for employees to get together and address challenges faced by the company. “[Some of those organizations] set aside two hours every other Friday when you don’t do anything traditionally work-related. It’s not massively time-consuming, but it can generate innovative approaches.”
Crucially, however, those efforts need to be recognized. Awards to celebrate initiatives that deserve to be championed are important to keep up the culture of innovation, in which people support each other and share knowledge. One example of an award-winning service is an innovative treatment adherence program; originally launched in India, it now spans 15 countries, involves 150,000 patients, and drives value through treatment adherence. ”Driving growth from better patient outcomes is what this is all about", Vandenhouweele stressed.
Advantages of emerging markets
Emerging markets are fantastic sandboxes for innovation. Although they come with their unique challenges - including diversity of payers, many out-of-pocket drug coverage systems, geographic and communication challenges, and intense competition – the opportunities often outweigh the challenges. One of the benefits of emerging markets is their distance from many corporate headquarters. Often, branches are set apart from the ponderous headquarters machines, a situation that may free the staff there to be more innovative. In addition, limited resources can be a stimulus (think Frugal Innovation). And it can bring people together, eliminating departmental silos that often cripple the innovative functioning of big organizations. Finally, in an emerging market, you can do things under the radar; test your ideas until you discover that they work and are ready to be spread (think Stealth Innovation).
Executing commercial innovation can be like a clinical development program. Encourage thinking outside of the box, start small with experimentation, fail fast, or reach proof of concept that can be tested in a broader context. Include people who have the most direct contact with customers – they often have the most innovative ideas and those that have the most impact. And, critically, ensure the achievements of innovators are made public and recognized by senior leaders.Through these tactics, and partner and customer centered strategies, innovation can be developed until it becomes part of a company’s culture. And that, of course, is the ultimate goal.
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