It is now widely accepted that the pharmaceutical industry faces a near perfect storm as the old blockbuster model fails to renew fast-emptying drug portfolios and entire business models face obsolescence. Leaders agree profound change is required, but the direction of that change is far from obvious.
To complicate matters, the nature of change itself is changing. The world used to alter relatively slowly and predictably, then perhaps 30 years ago the pace accelerated dramatically, powered by breakthroughs in digital technology. Now we are in a third age of change, an age where change is not just fast but seemingly random and chaotic.
The effects can be seen all around us, from the global financial crisis that virtually nobody predicted, to the meltdown of Blackberry, to the almost overnight appearance of e-cigarettes that are threatening the entire tobacco industry. Good news perhaps if you are a nimble start-up company, but a potential disaster for an established pharma multinational.
With bioelectronics GSK has placed a true bet on the future with little predictability of outcome
With development schedules taking longer than ever, the industry needs to look to the future to understand how the lifestyle choices of today could affect the patients of tomorrow. But what does this mean in practice and how can leaders ensure that their company is set up in the long-term to succeed in this new environment?
Four types of foresight
Until recently, the overriding business model of the global pharma industry was based on making strategic investments in drug development, aiming ten or more years into the future, at a more or less fixed target. Many current leaders learned their strategy-planning tools perhaps 25 years ago, when rigorous analysis and projecting forward from the present day were reliable ways to set a future course. But how do you take aim in a world of chaotic change? How on earth do you place major ten-year plus strategic and financial bets with a decent chance of success?
In pharma, as in a range of other industries such as petrochemicals, aerospace and city planning, a new way to predict the future has never been more urgently needed and this article outlines four possible ways to tackle the issue.
1. Embrace science fiction over science fact
When building future scenarios, the conventional approach is to look at today’s technology, and ask what it might enable in the future – for example “what will apps enable in remote monitoring?” The disadvantage of this approach is that it starts with the technology of today, which necessarily limits how far into the future any prediction can be made.
Another method altogether is to start with the big unmet needs of today, and bet that technology will somehow solve them. An example of this is the loss or theft of property – I’d bet that in the future, scanning and location technology will be able to make this a thing of the past. Solving this problem could easily spill over into healthcare to tackle the major problem of missing paper records.
To make this technique work teams need to emulate the skills of a creative science fiction writer, rather than an analyst. It’s about thinking through a leap into the future before plotting a number of possible paths to get there.
To take a well known example, the film Minority Report, released in 2002, was full of what seemed like fanciful technology – computers controlled by touch, advertising that could recognise individuals and target them with tailored messages and so on. A decade later these ideas are with us, in more or less the way they were imagined. The crucial point is that these ideas were based on a blend of emerging known technology and “wouldn’t it be useful if…” thinking.
Sometimes the execution will be very different from what was imagined, but if the need exists it is likely to be met somehow. In 1958 Star Weekly in the US ran a feature imagining a world in which ‘rocket mailmen’ would deliver the mail at fantastic speed, powered by personal rockets. Of course the execution (email) ended up being very different, being literally unimaginable in 1958, but the need led to a very disruptive solution.
Here the thinking is more along the lines of “I don’t know what the solution will be but if it’s important it will have been solved somehow” which can expand your thinking of what a future world might be like.
2. Insight is more permanent than data
Many elements of the pharma industry’s basic business model are, by definition, temporary. Patents create a ticking clock for all new drugs, compounded by competitor activity, political turmoil and demographic change. When looking to invest in a new drug, the investment case demands predictability and solid numbers, which the real world increasingly fails to provide. Perhaps surprisingly, a more solid foundation can be found in human factors and in understanding the unmet needs that patients and clinicians have around health.
Predicting the health crises of the future, the drugs that will be defeated by bacterial resistance, or the diseases that will be successfully consigned to the history books can be extremely difficult, if not impossible.
The one constant element is human beings, and many human needs and preferences are predictable. To take a simplistic example, few people like pain and so it follows a method of insulin delivery that did not require daily injections would be welcomed among diabetics. Likewise weight gain remains an unpopular side effect among people battling depression, while cancer sufferers want their lives to remain as normal as possible during treatment.
While safety and efficacy will always be the most crucial factors in any treatment, insights into human behaviours can be rich inspiration for profiles that will stand the test of time.
So the challenge becomes one of uncovering permanent insight (a whole art in itself) and building it into future scenario planning.
3. Related worlds thinking
Most large organisations look at the world through the lens of their own industry, and are hungry to know what the future holds for their own bit of the world. Type ‘future of healthcare’ into Google and you will see just how much effort goes into looking forward through healthcare spectacles. There is huge value though, in getting stimulus from outside your own business category and connecting with the world’s most interesting thinkers.
One way to do this is to find an interesting question that can bring thinkers together, then synthesise from their conversation and debate a wide range of potential futures.
So for example while pharma might ask “what is the future of telemedicine?” (a good mid-term question), a more inclusive question might be “what is the future of the home?” The latter has the potential to draw in thinkers from a whole range of industries and disciplines, and we know from experience that such broader questions and debates invariably suggest a wider and more opportunity-filled range of future scenarios.
4. Zig while the others zag: Embracing revolution
When looking at the future, most large organisations ask, “what can we do with the assets we have?” or “what special expertise do we have and therefore what science shall we pursue?” Of course start-up companies are not hampered by huge fixed assets, so they can ask a different question, such as “what will the future need that it doesn’t have yet?” Multinationals need to think in this way too.
Some of the most innovative large organisations place revolutionary questions at the heart of their thinking about the future, and put bets on technologies that have the potential to disrupt their own core business. For instance GSK is investing in bioelectronics. The company has placed a true bet on the future with little predictability of outcome, time or commercial potential, but with the possibility of being a revolutionary new paradigm of treatment. As such it necessarily sits outside any day-to-day innovation process, with its own model of risk and bespoke proof points.
While these ways of thinking about the future all offer rich potential for pharma, the true magic comes when you combine them in a dynamic and creative approach, blend in reliable future projections such as population ageing, then place real bets on it.
One prediction I am totally confident about is that only the pharma companies that are genuinely creative about how they think about the future will be able to shape and profit from it.
