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Darwin's Medicine blog

Professor Brian D Smith is an authority on the pharmaceutical industry and works at SDA Bocconi University and Hertfordshire Business School.

The end of pharma

Some parts of our industry may go the way of the kitchen display cabinet and the word processor

Kitchen display cabinet

Although most of my time is taken up with research and writing, about a third of it is spent applying Darwinian science to help companies evolve. 

It provides very practical solutions but it often demands a level of thinking beyond the typical strategic planning charades. As usual in this column, allow me to reach my practical conclusion via a little amble into the science.

Environment selection

A big, sometimes contentious, debate among evolutionary scientists is about where evolution happens. The question debated is this: since evolution is a process of selection by the environment, what exactly is it that is selected?

At one extreme of this debate stands the great Richard Dawkins, who sees ‘the selfish gene’ as the unit of selection. At the other end stand scientists like David Sloan Wilson, who think that selection occurs at multiple levels, from the gene to the organism to the group.

Its not an esoteric debate: Wilson’s work, for example, helps to explain why and how we humans developed our altruistic habits. Simply put, altruism or, more broadly, prosocial behaviour makes more sense when you see it as favouring the survival of the group, rather than the individual. For a Darwinian geek like me, these ideas are wonderful tools for understanding how the world changes.

Higher-level selection

Here are two examples of multi-level selection that might seem mundane, but they serve to make a point. When I began my working life, my secretary used a word processor – a typewriter with a tiny screen that showed one sentence at a time. And when I was young, my mother bought a kitchen display cabinet, a free-standing piece of furniture. Both items were highly desirable in their time and they have not been superseded by direct replacements.

Yet I’ve never bought either, and nor have I used either for many years. That is because they have both been replaced by higher level things. The word processor has been replaced by the computer with an all-purpose office suite of software. And the last time we renewed our kitchen we bought an entire fitted room, complete with cupboards and appliances. In both cases, the function of the smaller, lower-level entity was absorbed by a higher-level entity.

And why did this happen? Because the selection pressures form the market environment, which included both functional and economic factors, selected in favour of the higher-level entity.

The market liked PCs and fitted kitchens so much, it was less concerned with their parts. This is an example of higher-level selection, just as much as the Palaeolithic environment favouring tribes of altruistic humans.

Multi-level selection

So, how is the concept of multi-level selection useful in the life sciences market? Well, twice in recent weeks I’ve worked with companies in chronic diseases – diabetes and asthma.

Both began their thinking worrying about how to evolve their product – in the first case a continuous blood sugar monitor, in the second an asthma drug. In both cases, it is difficult to see how to adapt to the market’s dominant selection pressure, which favours lower costs and therefore commoditisation.

Difficult that is until one reframes the problem as one of multi-level selection. Using that perspective, it becomes obvious that the market of the future will not choose drugs or devices, it will choose systems. This is directly analogous to the market no longer choosing kitchen cabinets but choosing kitchens instead.

Through the lens of multi-level selection, the question becomes how to evolve the system, rather than the product. And that lens also allows us to make sense of what we see happening around us. Various respiratory companies are developing smart inhalers as part of their offer.

Glucose monitoring companies cooperate with diabetes pharma companies. In the market for medical technology, companies like Philips, Siemens and GE Healthcare sell integrated systems that optimise health economic outcomes. Rivals who try to compete with stand-alone products rarely succeed, other than when they construct tiny, defended niches.

A different world

When one uses multi-level selection to look at the future of the industry, rather than a single business, it predicts a very different world. Our market might follow the path of word processors, kitchen cabinets or, easier to imagine, medical technology; companies in some market sectors like respiratory or diabetes will cease to be pharma companies in our current understanding of the term.

They will develop, provide and maintain disease management systems that incorporate pharmaceuticals but also diagnostic and delivery devices and, probably, patient-flow management systems. Looking back from the future, companies that marketed, say, insulin or LAMA/LABA drugs will seems like strange historical artefacts from another age.

So, yet again, I argue that a Darwinian view of the life sciences market is not only intellectually rigorous but also practically useful. It is only surprising, in a science- based industry, that we don’t make more use of Darwin’s wonderful ideas.

Professor Brian D Smith works at SDA Bocconi and the University of Hertfordshire. He is a world-recognised authority on the evolution of the life sciences industry and welcomes questions at brian.smith@pragmedic.com

13th November 2019

From: Research

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