Pharma/Biotech Business Model Innovation
When I hear/read about business model innovation in pharma/biotech, the themes generally focus on changes that would improve R&D productivity – moving discoveries from academia to industry more efficiently (some examples of university-related incubators), reproducibility of experiments, venture capital firms creating their own early stage companies, pharma moving R&D innovation external (corporate, biotech and academic).
But what if R&D turns out to be only the tip of the iceberg in the efficiency of bringing new therapies to market? What if to TRULY change the outcomes we have to address the rest of the iceberg – the business of new drugs? Recently Frank David asked where the commercial (pricing, sales, marketing) innovation is in the industry. What about the financials? Again, there has been a focus on the early investment and handoff but what about changing the business model of revenue-generating pharmaceutical companies? What if the norm for reinvestment into a pharma/biotech company changed? What would an “Amazon of pharma/biotech” look like? I’m not suggesting recreating Amazon’s business model (Added after posting: with an eye to their revenue/investment ratio) to focus on therapeutic development but that innovation of that sort in our industry has a long way to go.
Trail of breadcrumbs…
On Sunday afternoon, I read a blog post by an assistant professor in engineering who systems biology about whether academia is truly broken or just really hard. I suggested the answer is broken – that discussing professors and students is just the part of the iceberg that we can see.
Later in the day, there was an interesting exchange with Michael Gilman, Venture Partner at Atlas Venture and CEO of two of their biotech companies, and Troy Wilson, another biotech CEO. This exchange left me thinking about the pharma industry and the iceberg.