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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.

Not as we know it

We shouldn’t expect our descendants to look like us

I've written before in this column about how our industry's current spurt of evolution strongly echoes the period in the late 19th century, known by historians as the second industrial revolution, during which the modern life sciences industry was born.

The recent, interesting announcement of the cooperation between Novo Nordisk and IBM is an interesting example of this “rhyming of history”, to steal Mark Twain's words. As usual, let me talk about my research for a little bit before I come back to the practical implications of this and similar industry developments.

Despite what you read in some self-aggrandising corporate histories, our industry wasn't the direct result of the heroic actions of a few great men. Rather, the modern life sciences industry emerged gradually from the convergence of a large number of social and technological trends. Mass education, democratisation, science and steamships all played a part in transforming the apothecary business model into the research-based life science company. This emergent property of history has an interesting corollary that I like to describe in the form of a time-travelling thought experiment.

Imagine travelling back in time to, say, 1870 and sharing your knowledge with a group of investors. The pharmaceutical industry is going to be huge you would tell them, without a word of exaggeration. What would those investors do? They would probably rush out and invest in apothecaries because that is what the pharmaceutical industry was to those Victorian financiers. As they rushed to the door, you might remonstrate with them, telling them instead to put their money into some interesting firms on the banks of the Rhine who are playing around with coal tar. “Are you mad?” the investors would say. “They are not pharmaceutical companies, they are dye manufacturers!” And your prescient investment advice would fall on deaf ears. This is a fun “Gedankenexperiment”, as Einstein called it; an opportunity to laugh at how much wiser we are than our ancestors. But our thought experiment has a more serious purpose, which is revealed when we move the experiment to the present day.

A framing error
When today's industry leaders ask me “What is the future of the industry?”, I describe it in terms of the 26 or so new business models revealed by my research. The follow-up question, often asked in a slightly exasperated tone, is usually along the lines of “No, no, I meant what's the future of X?”, where X is the questioner's personal pet topic - drug development, digital marketing, payer relationships or whatever. Implicit in this follow-up question is the belief that the future of the life science industry is the future of its current business models and companies. In other words, the questioners are making the same mistake as their Victorian ancestors. It is what cognitive psychologists call a framing error, asking the question in terms constrained by current knowledge. Of course, there's no doubt that their pet topic will remain important, just as apothecaries (in the form of pharmacists) remain important today.

How will the patient need I'm meeting now be met differently in the future

But the future of the life sciences industry will be much wider and more complex than the future of today's companies and models, just as the life science industry of the 20th century came to be about rather more than apothecaries. If we expect tomorrow's life science companies to look like today's, we'll be as wrong as Victorian investors in apothecaries would have been. The IBM Novo Nordisk cooperation is an interesting example of these future directions.

The future's complexity
As my published work has already predicted, the Novo Nordisk-IBM deal points to a future of medicine including artificial intelligence as well as clever drugs. To quote Novo's Jakob Riis: “A lot of routine issues around judgments of dosing and the whole interplay between food intake, exercise and insulin could be better handled by AI that can draw on a much broader source of data. That is what computers typically do well.”

Hard to argue with that, of course, or with other trends that point to preventative medicine or consumerised markets or any of the other fundamental shifts that we see happening. In a practical sense, however, what the Novo Nordisk/IBM cooperation reminds us is to frame our questions about the future carefully. Ask not “How will my current model evolve?” but “How will the patient need I'm meeting now be met differently in the future?”. This may only seem like a semantic quibble but words are important. As Steven Pinker has written, words reflect and shape what's going on in our heads. People and firms that speak and think in the old way will act in the old way and will get the results that old approaches to new situations usually deserve.

16th February 2016

From: Healthcare



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