Archive for the ‘Healthcare innovation’ Category

Is Big Pharma Losing Its Innovation Brand? Not so fast…

The list of leading consumer electronics and telecom companies that have embraced digital health this year are all household brands: Apple, Qualcomm, Google, Amazon, Samsung, Verizon and AT&T. Funded startups in the tough guymobile health sector number in the hundreds.

We’re seeing a phenomenon in which the tech industry, specifically tech entrepreneurs, are spearheading health innovation, replacing the traditional players like biotech, pharma and medical device companies. And pharma seems to be acquiescing to these newcomers, despite the fact that there is no other industry player as intrinsically linked to both innovation and the delivery of healthcare as pharma.

Health tech leadership evolving
Pharma has always been a health tech player. But in just the last few months as health tech has been redefined as digital, it’s become blatantly obvious that health technology leadership is now in the hands of big brand consumer electronics companies. And while the focus of companies like Apple, Qualcomm and Samsung has initially been the largely unregulated health and wellness sector, there’s nothing inherently limiting them from moving to the clinical side.

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The Land of Oz

Dr. Oz and celebrity doctors like him have stirred up the medical community. Regardless of what you think about the accuracy of Dr. Oz’s claims and advice, he has created a huge audience of four million viewers who look to him for medical, health and nutrition advice.

While I don’t have the clinical background to judge the truthfulness of Dr. Oz’s advice, I do know that he’s leveraging media and technology in a very fresh and powerful way to enable and support patient empowerment. His platform puts medical and health information into the hands of millions of consumers. Dr. Oz’s approach is filling an unmet need in the medical community: helping patients to truly learn and understand their health.

OzThe Perfect Storm
It really is a perfect storm of trend, technology and media. Patients really want to understand how to live healthier, and cable television and digital media and apps have made access to fresh content cheap, convenient and ubiquitous. But this shift has upset the natural order of traditional patient-doctor relationships.

Physicians working in the traditional health care system are often overburdened and don’t really have the bandwidth to create new ways of doing things. So along comes a physician, Dr. Oz, who is able to break down health, healthcare and medicine in very simple ways that make it accessible to the population – and consumers are embracing that. The magic of Dr. Oz’s approach is that it’s engaging, accessible, simple and motivating.

What can we learn from Dr. Oz?
While there has been negative press about Dr. Oz’s endorsements of weight-loss products, there are people, particularly those who may not have a primary care physician, who use his advice to make decisions about their health. So before we attempt to silence or disparage him, I think it is better for us to look at what Dr. Oz is doing right and what we can learn from his success, especially at the physician level. What can physicians learn from Dr. Oz’s simple, clear explanations of what’s happening in the body, and how can they incorporate that into their patient relationships?

The patient empowerment movement isn’t going away, and we shouldn’t want it to, so it is important for physicians to embrace the patient’s willingness to learn and understand medicine and how it affects their bodies.

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Pharma and its Innovator’s Dilemma

A recent conversation with a friend in the pharma industry validated my thoughts and concerns about the systemic challenges that pharma is facing. The pivotal insight came from my friend’s comment that he wants his next job to be “not just about pills,” but a job that takes on a broader role in healthcare, one that’s more focused on patient outcomes.

This personal revelation was a bit surprising given the fact that my friend’s entire career has been pharma marketing. Promoting drugs is his area of expertise. So why did it take a career “transition” phase to bring about this personal commitment to the need to broaden pharma’s mandate?

innovation highwayWhy not innovation?
The challenges and obstacles that senior-level pharma executives face are extraordinary, especially when it comes to innovation and moving the industry forward. Pressure from Wall Street, business partners and investors who are focused on revenue growth and short-term profitability makes it incredibly difficult for top executives to think outside the box or consider what’s next for the industry or their company.

Every day, pharmaceutical companies large and small are managed to meet performance and revenue expectations. My friend observed first hand how even the long-term planning process (5 to 10 year horizon) doesn’t give senior executives the flexibility to discover and engage in innovative opportunities that might allow them to consider new offerings or business models.

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When did Pharma miss the Innovation Pride Parade?

A recent article identified four basic skills that new leadership in pharma needs to be successful in the arena of consumer health. The author, Michael Winter, addresses the topic from his perspective as an executive headhunter, with the expertise and obvious vested interest in helping to find, source and
pride paradeplace talent.

Winter observes that the capabilities, talents and skills that built pharma into the very successful industry sector it has been aren’t necessarily the same attributes that will make pharma successful over the next 5, 10 or 20 years.

“What got us here won’t get us there,” has never been truer than it is in pharma today.

The Skills Needed
The clinical research and development skills needed to produce new drugs will always be critical to pharma’s success, but our approach to the marketplace needs to be rethought and adjusted. The kind of marketing expertise needed in today’s environment has more common with successful consumer goods companies than traditional pharma.

This realization has spawned a growing contest for talent between pharma and consumer goods companies. In some cases pharma is trying to poach senior consumer executives. To be successful, however, pharma needs to first make itself an attractive destination for this type of experienced hire.

Most consumer executives look at an industry like pharma and say, “I don’t know… It looks complicated. It’s a highly regulated industry. They’ve got business model challenges. They’ve got brand issues. I’ve done well on the direct consumer side. Why would I ever leave my successful career here and move over into health? That just seems like a recipe for disaster.” Read Full Article Now »

FDA Loosens Regulatory Reins on Digital Devices

Over the past year there have been a series of draft letters from the FDA on the approval process for medical devices, particularly in the arena of digital health. After several years of being a hyper-vigilant regulatory agency and effectively slowing down the approval process for new products, the FDA has begun to relax its approval requirements, especially for digital health products.

FDA3Historically, the FDA has divided medical devices according to device classification and risk to patient and user. Class I includes devices with the lowest risk such as an activity tracker like a Shine or Fitbit and Class III includes those with the greatest risk such as pacemakers or implants.

The class indicates what level of premarket approval is necessary. Most Class I and Class II devices are exempt from the 510(k) Premarket Notification application. Most Class III devices require full Premarket Approval (PMA), which generally requires clinical data to support claims. Read Full Article Now »

Achieving Escape Velocity from Pharma Corporate Inertia

After a few recent client meetings I’ve begun to reflect not just about the challenges facing pharma, but the nature of those challenges. More specifically, I wonder if they reflect normal cyclical ups and downs or the impact of social and political evolution? Or do they represent a secular change?

I happen to believe we’re at the cusp of a secular change in pharma, one of those major paradigm shifts in an industry that only happens once every 10 or 20 years, or once every generation. A shift in which the industry will experience a major transformation. Retail is going through a change like this, energy is in the middle of transformational change, and I think this is also happening to pharma right now. No political or regulatory or scientific shifts will bring back the good old days of pharma.

escape velocity

Impact of Secular Change
Jim Collins has written extensively about what happens when massive change hits an industry. When it all shakes out, there are a handful of companies that are the undisputed leaders, while the majority simply meander in the middle of the bell curve.

We don’t need to recite here the product, access and margin pressures our industry faces – everybody knows that the power center is shifting. The real question now is, how do we control, channel and predict that change? Or do we just let it happen to ourselves?

Many people that I talk to within pharma are pretty discouraged, because they feel like their companies are slow and morbid and there’s too much inertia to really make change happen. Yet, when I talk to people at the most senior levels, they do want to make change happen, but feel constrained by the mid- and lower levels. Oftentimes, when the senior level tries to make change happen, the people at the mid- and lower levels dig in their heels. It’s reminiscent of when politicians try to make significant changes and the civil servants respond, “Well, he’ll only be around for a few years, and then we’ll go back to business as usual.” In some ways, that attitude prevails in pharma.

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Creating Pharma(x)

pipe1Mention change in the pharma industry today and you’ll get raised eyebrows along with a sarcastic alliterative remark suggesting you must be Sherlock Holmes…

No, the question is not whether change is happening, it’s how you predict, control and channel change to your advantage. Or acquiesce and allow it to happen to you.

Secular industry change is risky and challenging. But it’s only through market-defining challenges that companies and people come out stronger and better poised for the road ahead. Embracing risk and creating ambitious goals is what keeps companies moving forward and ultimately leads to new and exciting discoveries.

Larry Page, co-founder and CEO of Google, recently commented that as Google takes even more ambitious and costly bets, one would expect their failure rate to go up. But in fact, it hasn’t. And even when they may not achieve an ambitious goal, the path they take often leads to important things. Read Full Article Now »

Bold Leadership in Healthcare

What’s happening at CVS Caremark is an emerging business case study in visionary leadership.

CVS made headlines for its decision to discontinue selling cigarettes, capturing the gratitude of many people, including the White House.
cvs logoThere was chatter among analysts that this move will trim $2 billion from the company’s revenue, a fact that only seemed to add to the feelings of goodwill among current and potential customers. The widespread response from consumers was, “This is a wonderful thing that CVS did. They didn’t have to do it. They’re doing it not in the best interest of the business, they’re just doing the right thing.”

From a PR perspective, it created a real sense of warm fuzzies towards CVS, increasing pressure on other chains like Walgreens and Rite Aid to follow suit. It has been assumed that management calculated that goodwill towards CVS would result in more customers and more foot traffic, and eventually these new customers will replace the lost revenue. (In fact, trimming $2 billion in revenue, while meaningful, likely will have a modest effect on the stock price. It reflects less than 2% of total revenue, and its contribution to net income is roughly $70 million. Given that the new policy won’t even take effect until October, it will have negligible impact on 2014 company performance.) Read Full Article Now »

Pharma Innovation moves to Business Innovation

The need for innovation within pharma now goes beyond just product R&D. Innovation today must include business model innovation.

road2This could lead to an unexpected left-hand turn in your near future…

Moving beyond the pill?
It has become de rigueur for pharma executives to talk about “moving beyond the pill,” something closerlook has been championing for several years. This new way of thinking includes offerings like disease management, patient engagement, companion diagnostics, etc.

That’s all well and good. However, a critical part of this discussion, especially in light of healthcare reform changes in healthcare delivery and payment, is how pharma will get paid for all of this. Paid for the “value-add” investments, yes, but even paid for the core product if and when it becomes commoditized.

Another way to ask the question: Who will be the buyer in five years?

More and more health systems (buyers) are becoming vertically integrated. These vertically integrated systems are achieving the most productive and most streamlined patient experience and the best outcomes at the lowest cost. Given these results, the trend of provider consolidation will continue across the country. Numerous health systems and policymakers are advocating this integrated approach.

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The Rise of Multi-Channel Healthcare Delivery

eprizeLast week at Health 2.0, the XPRIZE Foundation announced the winners of the Nokia Sensing Challenge, a $2.25 million global competition to accelerate the development of sensors and sensing technology that is smaller, lighter, and capable of capturing true clinical data on a personal level. It was an exciting overview of emerging technology that’s crossing the barriers of mobile communication, nanotechnology, physics, chemistry, biology, material science, and software.

Multi-Channel Health Care Delivery

I write often about the importance of multi-channel healthcare marketing, but this convergence in technology and health will open up exciting new growth opportunities for multi-channel healthcare delivery.

Health traditionally has taken place through three primary delivery channels:

  1. Hospitals
  2. The doctor’s office
  3. Clinics

These channels have evolved over the years in terms of their level and sophistication of healthcare delivery. Even 20-30 years ago, most sophisticated health delivery was only available on an inpatient basis in hospitals. And then in the ‘90s, partially as a byproduct of the Clinton-era focus on healthcare reform, there was a real push to reduce hospital costs, leading to the development of ambulatory care, or outpatient services.

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