So … are you ready to compete with Apple? This is a question I have been asking senior leaders in pharma for the last couple of years and the current resounding answer is no! There has also been a feeling of concern to this question as the gravity of this potential likelihood sinks in. Not that many years ago, however, this question may have led to some derision – the reality of Apple or any other tech company competing directly with pharma may have seemed highly unlikely. This was an industry with high barriers to entry, most notably the long cycle time and large investment needed for R&D. Traditionally getting a pharma product to market has been a very long and expensive process, which is why we have seen industry consolidation and limited new entrants at scale.
Times though, as we know, are a changing. The shift in dynamics that the industry has faced over the last decade, which I wrote about in my previous blog, have led to the realisation that there is a need to be more customer focused and embrace new technologies. The early moving functions to do this were marketing and communications, but more recently there has also been a shift in the R&D functions too. The industry has however been notoriously slow to move, and I believe part of this lethargy is not just down to organisational size but also this idea of working in a “protected” industry – with high barriers to entry and where the only competition that will ever exist will be from other pharmaceutical or biotech companies. After all no other industry has been setting up pharma R&D and that would take years to happen so there would be plenty of warning.
That reality is now changing. Last month British start-up Exscientia and Japanese pharmaceutical firm Sumitomo Dainippon Pharma announced that they have a drug molecule invented by artificial intelligence (AI) which will be used in human trials in a world first. The process to develop this molecule, using AI, only took one year, rather than the standard five plus years. Now all of a sudden those R&D barriers to entry are coming down. Now the prospect of a tech company entering the industry no longer seems quite so unlikely.
There is still a large amount of “traditional” pharma capabilities that are required but more and more of the process can be streamlined and optimised with the use of good technology. Besides the discovery side of R&D, where using AI is now a very real option, there are also multiple other elements were technology plays an increasingly critical role, for example using AI for data analysis or IoT for real time data capture from trial participants. Increasingly competitive advantage will not come from being a traditional pharma player but from being a tech pharma player.
So what are the chances of the big tech companies entering this market? The reality is that the likes of Apple, Samsung & Google are all already investing millions in the healthcare space and this is an industry ripe for the picking. As technology, such as AI, improves, the traditional pharma industry may start to look like low hanging fruit to companies that excel at using technology and a deep understanding of their customers to drive competitive advantage. Should one of them decide to make this move are we as an industry ready to compete with them? Currently I fear not!
If as an industry we want to be ready to compete we need to shift a gears. We need to drive change both in terms of how we use technology but also how we behave and think about our customers and the external environment. We need to drive large organisation wide change internally in how we operate, in the process we follow, the people we hire, how we incentivise our teams and how we are structured and supported. The time for pilots and small step by step change is over – now is the time for big bold moves and true leadership. Only then can we be truly competitive in today’s world and be ready for what tomorrow holds.