How Horizontal Integration Can Drive Health System Innovation
December 11, 2014
The traditional vertical integration of pharmaceutical companies is hindering innovation. It has of course been driven by the need to ensure that discovery, development and commercialization of new medicines is conducted to the highest standards of safety and ethics at every stage. This however has created a linear process with each stage in the life cycle of a molecule being conducted independently of the next. While there have been many successes in improving health outcomes using this approach disruption to this status quo could lead to faster innovation.
The healthcare systems which the pharmaceutical industry serves are constantly in a state of dynamic change. To be responsive, biopharmaceutical companies need to understand and tackle the concept that commercial value is becoming increasingly localized, diverse and dynamic. They need to build portfolio and development strategies based on an understanding of how ‘value’ is defined by a complex network of global, regional and local stakeholders. A more horizontal and iterative integration within pharmaceutical companies will help drive this process that is better defined as Clinical & REal world eviDence Optimization than clinical development and this should constitute a new patient focused Credo for the pharmaceutical industry – Credo in the sense of “a statement of the beliefs or aims which guide someone's actions”.
The concept of defining the intrinsic value of new products and ‘beyond the pill’ services holistically from multiple stakeholder perspectives and starting to bring this perspective into clinical development planning is of course something that is well known and accepted within the industry but something that it is not set up to execute upon effectively.
Drawing upon a biological analogy a centralized multi cellular approach to phase three clinical development planning and subsequent commercialization is required - drawing upon insight gathered from the local markets (through organizational ‘senses’) iteratively and fed back to this central ‘cross functional clinical / commercial entity’.
This kind of model delivers a more structured approach to defining and understanding local healthcare system needs (including potential market group archetypes) and the value metrics they respond to while at the same time it should preserve the necessary ability to execute local market operating models within the required legal and regulatory frameworks.
In order to achieve this there needs to be more horizontal integration between global functions and Local Operating Companies within pharma than there is today. It is not about restructuring or creating more functions within organizations – what is needed are more Integrated Healthcare Solutions including new market role types, precisely defined processes that facilitate sharing of knowledge and a shared end goal across those responsible for central clinical and commercial planning and the ability to quickly generate real world data in a way that can be leveraged with local payer / provider organizations and that matches their definitions of ‘value’.
Service providers with the broad data mining, analytical and operational toolkits, unhindered by traditional silo’d pharma operating models can be the catalysts of change within the industry and a vehicle through which to incubate new clinical and commercialization models.