Four strategic recommendations for disruptive innovators in biopharma businesses are as follows:
Partner aggressively to develop assets not destined to currently enter development under existing capital structures. Competitive threats should be nearly ignored and cooperative risk sharing be embraced as the new normal. This is not a zero sum game. Be daring and utilize creative deal making to manage risk and experiment with new business models that will result in improved capital efficiencies.
Strategically shrink IP attack surfaces on an industry scale. A small change will not do the trick here, as this will require a monumental rethinking what is now considered to be competitive information. Information networks should be established and redundancies eliminated throughout the industry. Several consortia have already been established, mostly led by academia, towards achieving this reality (such as the Structural Genomics Consortium in Oxford), but industry has been slow to adopt the concept of-idea sharing. Many companies seem willing to experiment with collaboration, but few seem ready to take steps towards real change.
Point R&D efforts toward bringing health care to the developing world. This is where disruptive opportunity lives because there is untapped potential in creating new markets and new business models to serve markets just beginning to bring healthcare online. The fact that pharmaceutical companies, biotech firms and investors all tend to focus their efforts on the developed world completely overlooks where the most rapid future growth will come from. Executives have been trapped into thinking that growth can only come through commanding higher margins. Most reason this is sound logic because it has worked in the past, but payers are becoming increasingly reluctant to pay for incremental improvements in next generation treatments. This is especially true since payers know that if they can hold out for patent expirations when the same treatments will become available for a fraction of the price.
Consider pursuing rapid go-to-market approaches and agile business models aimed at finding treatments for orphan diseases. Orphan drugs are fast tracked through the FDA approval process, so there is opportunity for designing entire business models around the concept of delivering medicines for orphan diseases fast. The data indicates that companies are bad at predicting outcomes in the clinic; therefore, it would be wise to devise a strategy that delivers as many drugs to clinic as fast as is safely possible. This would be much different than how orphan drugs are typically developed today, under the roofs of large pharmaceutical companies that still attempt to function like one-stop-shop drug companies. It may very well be that the old vertically integrated pharmaceutical business model is already dead; and the big Pharma companies that exist today are zombie dinosaurs already being eaten from within.
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