The paradox: how can a firm build for a digital future beyond the molecule while sustaining a commitment to drug development today?
Technology is disrupting all parts of the clinical lifecycle, from drug discovery through to commercialization. Though the lion’s share of investment to-date has focused on research and development, digital innovation beyond the molecule has the potential to enable disruptive new business models that transform the role pharma firms play in healthcare ecosystems.
R&D has received more attention because the business case is straightforward – accelerating time to market and improving likelihood of success reduces costs and increases potential revenue. The case for innovation beyond the molecule, however, is less clear. Generating, aggregating, and interpreting data to develop valid and relevant insights will require years of iterative experimentation and failure to reach maturity, and so will the process of developing business models to capture the value that those real-world insights create. At the same time, digital innovation beyond the molecule requires innovators to break down some of the traditional boundaries that exist across different parts of the clinical lifecycle.
Drugs will remain the cornerstone of pharmaceutical firms’ value propositions for the foreseeable future, and those drugs will still have significant value once the future beyond the molecule is realized. That leaves biopharmaceutical firms with a paradox: how can a firm build for a digital future beyond the molecule while sustaining a commitment to drug development today?
STEP 1
Align Stakeholders with a Bold, Patient-Centric Ambition
The Challenge: Innovations beyond the molecule create organizational tension because they have longer time horizons, higher uncertainty, and require different approaches to collaboration
As firms like Nvidia and SpaceX have shown in other industries, a bold strategic ambition for the impact a firm wants to achieve in the future helps all parts of the organization understand their role in creating that impact. An emotional, aspirational, and logical shared ambition for the patient and business impact you want to achieve creates room for the cross-functional collaboration required to innovate beyond the molecule. Most healthcare and life sciences firms already have a shared ambition – to improve the lives of the patients they serve – and digital innovation beyond the molecule is a natural extension of this ambition.
STEP 2
Give Innovators Autonomy and Access
The Challenge: Innovations beyond the molecule require higher risk tolerance and different skillsets
Innovation beyond the molecule is different from innovation in drug development. Projects that go beyond the molecule have high market and technical uncertainty so the path to success will likely include many learning opportunities (i.e. failures). As these innovations progress from ideas, to experiments, to fledgling businesses, they are at risk of being suffocated by the pressing demands of the core drug development-driven business.
To succeed, digital innovation projects need autonomy to move at pace, unfettered by traditional organizational constraints. Autonomy allows teams to apply different skillsets, metrics, risk tolerance, innovation methods, and ecosystem partnership approaches to meet the needs of an uncertain, exploratory venture.
However, these teams can also go faster than a startup by leveraging the expertise, resources, and assets of the core business. This can both give them an advantage over the hundreds of startups in the space and make it easier to reintegrate and scale the innovation when ready.
STEP 3
Start with the Problem
The Challenge: Piloting tech from startups or partners is a low-risk approach, but these solutions rarely scale beyond the pilot phase
Efforts to move beyond the molecule often start with someone saying, “We found this cool technology, let’s do a pilot.” Enthusiasm for innovative ideas is fantastic, but technology-first approaches often miss a key question: what problem are we solving? This creates risk of wasting valuable time and resources on a pilot that was unlikely to scale because, while the solution may have been great, it didn’t address a high-value problem for patients and the firm.
Instead of starting with technology, pharma firms should first identify critical unmet needs for their key stakeholders – usually patients, providers, and/or payors. Aligning high value needs with the firm’s ambition to improve patient lives and a business case for doing so creates a strong foundation upon which a new technology can succeed. This process is iterative – and firms should absolutely seek inspiration from new technologies – but grounding the beyond the molecule solution in high-value unmet needs, the firm’s ambition, a strong business case, and a path to scale increase the odds of success.
STEP 4
Move from Lab Experiments to Business Experiments
The Challenge: testing treatment efficacy is second nature for pharma firms, but business model experimentation requires a different approach to de-risking
Experiments to validate and hypotheses aren’t just for lab benches and clinical trials. The world of pharma solutions beyond the molecule is full of unknown unknowns, and these unknowns are risky. It’s important for pharma firms to de-risk critical assumptions early in the development cycle for beyond the molecule solutions to increase the odds of success and reduce time and investment spent on projects that won’t succeed.
Identifying, testing, learning, and iterating the critical assumptions behind a solution’s desirability, feasibility, and viability allows innovators to build evidence that the project is on the right track. Investing at the speed of learning minimizes the chances of over-investment in a project that won’t succeed, and enables quicker pivots to different stakeholder problems, solutions, or business cases based on what the team learns through experimentation.
Some of the common critical assumptions we encounter while helping clients build beyond the molecule solutions are below, but these assumptions will vary widely depending on a given solution’s use case, target population, disease indication, technology, and more.
STEP 5
Embrace the Ecosystem
The Challenge: Pharma firms are experts in understanding and treating disease, but are not expert in developing digital solutions
Biopharma firms are expert in developing molecules into drugs and therapies that treat disease. Biopharma firms, by and large, are not expert in developing digital solutions. To succeed beyond the molecule, pharma firms should leverage their strengths in understanding and treating disease to determine how an ecosystem of partners can help them close the gap on digital innovation capability. There is a rapidly growing ecosystem of technology innovators working to improve human health, with tens of billions of dollars in investment flowing to digital health companies each year.
To lead their markets beyond the molecule, pharma firms should leverage that ecosystem to generate, aggregate, and interpret data – so long as the pharma firm bookends the process by defining the business case at the start and utilizing the insights to create value at the end.
Pharma firms should approach new partnerships the same way they would approach a new business venture – by iteratively experimenting and building your way to long-term value. Starting with a business case and proof of concept, while also aligning on the success criteria for moving forward, allows partnerships to grow from transactions into mutually beneficial collaborations. This approach allows for quick selection of qualified partners to validate technology and co-create solutions, while also establishing shared goals and incentives that allow the partnership to mature alongside the innovation.
WHITEPAPER
HOW CAN BIOPHARMA FIRMS INNOVATE BEYOND THE MOLECULE?
The biopharmaceutical industry has joined the digital revolution. AI and machine learning are transforming how medicines are developed. This is driving unprecedented investment, with pharma putting $33 billion into digital R&D in 2021 alone.
This report describes the key success factors for starting on this path. It argues that pharma firms should act now to innovate beyond the molecule if they are to realize maximum returns.
Download the whitepaper to learn:
- The challenge of innovating beyond the molecule in a drug development-driven environment
- 3 reasons why biopharma firms should act now
- 5 ways pharma can move beyond the molecule
