Biopharma out-spends most industries on research and development, and takes an increasingly collaborative approach. Let’s see how the evolving partnerships between healthcare, technology, associations, health systems, and other life sciences companies fuel innovation, and why commercialization experts need their own commitment to R&D.
The reputation of the biopharmaceutical industry seems inversely proportional to its proven benefits, despite mountains of data to the contrary. From astonishing survival gains in cancer to astronomical cure rates in Hep C, millions of total jobs created to billions in health system savings, the industry’s greatest successes are all fueled by its unrivaled commitment to research and development. With total spending more than doubling since 2000 to nearly $59B, the biopharma industry invests more in R&D relative to sales than any other manufacturing industry, exceeding the others by six times the average.
The past year brought unprecedented political upheaval throughout the world, precipitating an implosion of trust that reverberated across most verticals. But the good news is that biopharma’s reputation has improved slightly, with the public wanting to know more about what the industry does, and the personal and economic value it can provide. Meanwhile biopharma has continued to evolve their R&D models toward further reducing risk and cost, and increasing innovation. Two recent in-depth reports from Deloitte and PhRMA reveal key R&D challenges and solutions, and how collaborations help fuel biomedical advances.
Balancing the R&D Equation
The first Deloitte study reviewed data from twelve leading biopharma organizations and compared their performance with four mid- to large-cap companies. The key findings exposed several industry pain points, including an annual projected decline in R&D returns of 3.7%, with peak sales per asset falling 11.4% year-over-year since 2010. The bottom line: Investment in research and development has been producing progressively less bang for the buck. As we’ve seen, the industry has been spending more and more—but the return has been less and less, leading to overall declines in performance and a search for solutions elsewhere.
The reasons? Primarily shrinking pipelines and the unceremonious end of the “blockbuster” era. As drug development costs continue to rise, their potential patient populations dwindle. That leads to blockbuster expenses without the blockbuster revenues to balance the effort. Ironically enough, while smaller companies consistently demonstrate lower cost-per-product and higher predicted returns, since 2013 the industry has seen a steady decrease in late-stage pipeline revenue from externally sourced products. Translation: Companies struggle to replace pipeline value with their own drugs, instead look to M&As, and paradoxically only get bigger.
Along the way the industry has learned important lessons, applying them to help recalibrate the scale and fine tune the R&D equation. Proven best practices include the pursuit of intense specialization with a laser-focus on particular therapeutic areas; offering benefit to the right target populations; staying responsive to all stakeholder needs throughout the health system; and continuously aligning decision-making across organizations. New and innovative ways have been explored to specifically increase R&D productivity, such as the application of agile methodologies, re-engineered resourcing models, and the strategic use of data.
Partnering for R&D Progress
The second Deloitte study was contracted by PhRMA and focused on another compelling and highly effective way the industry has balanced the R&D equation: Through the surprising growth of biopharma partnerships across a broad spectrum of healthcare stakeholders. With the goal of solving scientific and technological challenges, creating greater R&D efficiencies, and accelerating the discovery, production, and delivery of life-saving new therapies, these cross-disciplinary and often cross-industry collaborations provide scientific, regulatory, and delivery system insights, new operational capabilities, and additional financial resources.
Structured to improve patient outcomes, collaborations formed from these diverse specialties offer unique ideation, capabilities, and relationships that help biopharma companies assess the clinical safety and efficacy of a medicine. Within an increasingly complex, inter-connected, and disruptive quantified health system that drives genomics, molecular and precision medicine, and countless new therapies, integrated expertise across science, communications, and technology is now cost of entry. At the center is the end-user—patients—who actively participate in the innovation, and ultimately benefit from it.
The shift from traditional to collaborative partnership models involves biopharma companies, the academy, non-profits and advocacy groups, and the government. Partnerships and consortia (collaborations designed to advance basic research and are not centered around a particular product or compound) share their expertise across indications, therapeutic areas, and operational capabilities—they distribute ownership, control, and decision-making, thereby spreading risks and rewards. In terms of progressive growth, the study reveals how since 2004 new R&D and early stage partnerships have more than doubled, while consortia have increased by an amazing factor of nine.
For two decades, these collaborations between biopharma and numerous partnerships and consortia have had demonstrable successes, including improving understanding of diseases at the molecular level through the Alzheimer’s Disease Neuroimaging Initiative (ADNI); diagnosing and tracking disease progression as exemplified by the Cure Huntington’s Disease Initiative (CHDI); combination treatments, such as the Collaborative Novel-Novel Combination Therapies (CoNNCT) project; and the acceleration of translational research, such as the California Institute for Biomedical Research (Calibr) not-for-profit group.
Evolving Commercialization through R&D
As the benefits of cross-disciplinary collaboration in R&D become increasingly evident throughout the biopharma ecosystem, the missing link in communications becomes an obvious pain point. Traditional advertising agencies have never conceived of themselves as participating in biopharma R&D, as their business model has zero overlap with the core capabilities necessary to add value here. Instead, the “Agency of Record” sticks to brand strategy, content development, and marketing tactics. Do hard science? Conduct clinical and technological experiments? Proactively do any of these under their own dime and time?
The Klick Labs Commitment
Unheard of—yet long overdue—until now. Klick Health understands that the traditional agency model is obsolete, and disruption is needed so a new kind of commercialization partner can flourish. Thankfully, exactly that breed of partner is already here: Klick Labs. Consisting of a cross-disciplinary team including creative technologists, data and behavioral scientists, electrical engineers, application developers, experience designers, and medical experts, these mavericks experiment with everything from leading edge to exponential tech projects. Their mandate: Solve biopharma problems of tomorrow, today.
Klick Labs “inoculates clients against the future” by helping life science organizations advance healthcare through the application of emerging tech, and by bringing digital health innovation to market. Echoing the conclusions of the Deloitte and PhRMA studies summarized above, the Labs team “connects the dots” between life science and technology industry leaders, disruptive start ups, medical researchers, healthcare professionals, and patients to increase engagement and heighten value. And in the spirit of a consortium, Klick Labs experiments continuously, and sometimes even discovers a new field of medicine!
As today’s biopharma companies invest heavily in R&D and explore ways to improve it, they need a commercialization partner with a commensurate level of commitment, capability, and creativity. The lines between science, communications, and technology are blurring, to the point success is impossible without acknowledging the super-convergence and demonstrating proven expertise in all three. Check out this week’s blog post from Yan Fossat with an amazing announcement from the Labs team, and discover many more reasons why you should partner with Klick and Klick Labs.