The Future of Pharmaceutical Industry

Trying to copy and follow others in a world of turbulence and massive uncertainty is a risky business. Assuming that what worked last year will work in the future is also very risky. The objective of this paper is to get people think beyond the here and now.

The future looks great providing:

• Honest about the challenges (the facts).
• Getting back to basics and break old, outdated habits.
• Helping each other and collaborate like never before.
• Medical decision making with artificial intelligence (AI)
• Digital health “around the pill”

• We have about 7.5 billion people in the world who needs hospital care. Sixty-five percent of all health care are spending on developed nations and helping people whose age group is above 65.
• People above 60s will also be the most powerful political lobbyist in the world. They are more likely to vote for politicians who promise to meet their healthcare needs.
• By 2025, 85 percent of the global population will be in emerging nations.
• Prevention will be preferred over treatment. Pricing and reimbursement schemes will drastically change. Increasing levels of antibiotic resistance will render “routine” medicine redundant. Governments will have to take a radically different approach to pricing and reimbursement unless they want society to return to the pre-antibiotic era.
• Globalization, global warming, science and technology are all (for the first time in our history) accelerating at the same time. Everyone will be impacted. Drug shortages will continue, if not worsen, as supply chains are disrupted unless more is invested to improve resiliency.
• Medical technology will change our lives – 3D imaging, ultra-resolution microscopy, electronic patient records, computer aided diagnosis, low-cost gene readers and more. Wearable devices will put patient’s health at center stage and in greater control of their own healthcare.
• Short-termism will destroy corporations. Companies who run from one quarter-financial report to the next, ignoring the future, will not survive.
• Pharmaceutical organization’s currently spends, on average, $1.3 billion on bringing a new medicine to market with an attrition rate of 90 percent. Clinical trial failures over the last five years have cost the industry $240 billion. This level of inefficiency is not sustainable anymore.
• Most of the current regulatory framework is no longer fit for purpose and is guilty of stifling innovation when we need it most.
• Any job with any level of repetition (manual or cognitive) is at risk of being automated. Except pharmacy, law and financial professions to look very different.
• Our world needs more economies of scale to achieve greater efficiencies. Expect to see more mergers (consolidation) and also demergers as mistakes are made.
• In Europe and North America, companies often struggle to find the talent they need. This is not the case elsewhere. More than 85 percent of the world’s graduates in science, technology, engineering and math over the next two decades will be from Chinese and Indian universities.
• Although the impact of artificial intelligence (AI) in pharma is open for debate, it will have a profound impact on healthcare. Did you know that one in 10 medical diagnoses is wrong? In some clinical areas AI can improve the efficiency. For example, AI is capable of predicting (with 80 percent accuracy) which patients would die of pulmonary hypertension within a year. Whereas medical personnel have only 20 percent accuracy. AI and wearable devices helps to find the disease at the initial stage which can be cured with proper medical care.

Excellence in any walk of life comes down to doing the basics to Ph.D. level. The companies that will succeed in the future will, in my opinion, do the following exceptionally well.

Big Data, artificial intelligence (AI), robotics, and machine and deep learning all got a mention. To be honest, a lot of what I had to say was educated guesswork on my part. Whether what I predict happens or not remains to be seen.

There is a big difference between leadership and management. Leadership is about doing the right thing. While management is doing things right. Pharma has relied too long on management. We need to recruit and develop risk-smart leaders at every level and get them onto the shop floor. Every leader needs to become a “futurist”, not only focused on the quarterly financials. The benefits and risks of AI are not being correctly assessed by many senior leaders because many know so little about developments in technology and science.

Companies still talk about zero risk as if it’s real. It’s not. Zero risk is an illusion. In fact, risk aversion is dangerous. It stifles innovation, increases complexity and (paradoxically) risk. We must become risk-smart. We have to admit risks and manage them intelligently and quickly.

Remember less is more. When we have simple systems, motivation improves, errors fall and productivity increases. Simple systems also allow us to “fail fast”. In times of uncertainty we will make lots of mistakes. These only become learning opportunities if we fail fast.

Most companies’ training programs just tick the compliance box and change little. Old behaviors remain. If you understand 10/20/70 and NSF’s model for behavior change, B=M.A.t.H, your future looks bright. Your education programs must focus on providing the skills that will matter most: emotional intelligence, risk-based decision making, critical thinking and problem solving.

When problems and errors occur, so many companies focus on the immediate correction. The “Band-Aid companies” who allow high levels of repeat errors and mistakes won’t be around for much longer. The focus must be on prevention, not reaction, by designing out errors and mistakes in the first place and by brutally simplifying everything.

Unless your change management system can review and approve changes in less than an hour, you are going to be in trouble. In this turbulent world agility is key. Your change management system must be quick (otherwise it won’t be used) and only approve changes that add value and reject the rest (usually 80 percent!).

I leave the most important and hardest to last. We will not meet future healthcare needs unless we all collaborate – regulators, industry, payers and patient groups. The latter have been ignored for too long. Unless we collaborate, we won’t make it.

We still come across people and companies who are institutionally blind. They seem totally unaware and ill prepared for what is coming. Is it arrogance or ignorance? Who knows? For me it all boils down to simple economics.

If we as an industry fail to rise to the healthcare challenge, the results are likely to be soaring, unsustainable and a burden on us all.