An era of brutal disruption

By Kevin Robinson 25-Nov-2016

At the recent Pharma Integrates event in London, UK, Martin Lush, President, NSF Health Sciences, Pharma Biotech Consulting, moderated a session on “Managing the Complexity Crisis with Productive Paranoia.” Wishing to discover more about surviving in a volatile market of excessive bureaucracy, Dr Kevin Robinson asked Martin to describe the challenges ahead and how industry should prepare

Driven by an ageing population, globalisation and urbanisation, the level of change in the next 5 years will be greater than the pharmaceutical industry has experienced in the previous 35. A seismic shift is coming that will, for the unprepared, make existing 3–5 year plans redundant.

Falling profit margins, greater operating costs, supply chain disruption, material and people shortages, etc., will have multiple repercussions, and only the resilient will survive. Those who are productively paranoid and have prepared their organisations to become resilient, adopted intelligent risk management and taken their overly complex legislation, systems and procedures back to basics will thrive and prosper.

“The subject that intrigues me,” says Martin “is the whole issue of over complexity in the pharmaceutical industry, from research all the way through manufacturing to the supply chain. Frankly, it’s crippling our industry and — as the father of two millennials — what I find quite staggering and frightening in equal measure is that my grandchildren are far more likely to die from an infection than they are from cancer, Alzheimer’s and/or the increasingly prevalent lifestyle diseases.”

Why? Because we currently have no investment in antibiotics, or their equivalents, which means that patients — like my children — won’t get treated and won’t be able to have surgery. The consequences of which are profound, if not for our generation but certainly the next. And unless the entire pharmaceutical business model, from research to commercialisation to regulation, changes, with the objective of speeding up innovation, simplifying supply chains and streamlining the technologies involved in drug production, we’re going to struggle to meet patient needs. Patients need new medicines faster than ever before!

Yet, when you look around the pharmaceutical sector, and I’ve worked in 55 countries for a total of 35 years across the whole supply chain, you don't really see anything changing. You don't see any innovative thinking from anyone at any level. It’s almost as if as if the future of pharma is “same old, same old. The assumption being that what worked in the past will work in the future. Well, it won’t!”

“What we at NSF are trying to do,” says Martin, “is to say to people that the environment out there is changing. We’re living in an era of what I call brutal disruption. Brutal disruptions are profound, Earth-shattering events such as 9/11, Brexit and Donald Trump, for example.” Such disruptions, that used to only happen every 10–15 years, he explains, are going to keep happening and increase in frequency, perhaps as often as once a year. “And unless industry is nimble and fast, we’re not going to be able to do what we’re there to do, which is to generate medicines for this and future generations.” It’s almost as if financial and short-term P&Ls have become more important than actually servicing the patient.

Bigger than antibiotics?

When I asked Martin whether the issue was antibiotic-specific or more generic, he responded by saying that, for him, the concerns surrounding antibiotics are obvious: “Everyone’s known about the challenges we’ve been facing — and will continue to face — for some time. And yet, nobody’s doing anything about it. There are no novel antibiotics being developed. Sure, there’s different ways of tackling that, be it via bacteriophage, for example, but no one’s currently investing in conventional antibiotic therapy,” he explains.

Martin Lush, President, NSF Health Sciences, Pharma Biotech Consulting

Martin Lush, President, NSF Health Sciences, Pharma Biotech Consulting

“So, I use antibiotics because it’s an instantly recognisable topic and something that people have talked about for a very long time. And yet nothing has happened. But, with an ageing population, and with Alzheimer’s and type 2 diabetes on the rise, unless we can speed up and improve the efficiency of the whole drug production lifecycle (research, development, preclinical, clinical, commercialisation) and supply chain, through brutal simplification, we’re not going to be able to generate the medicines that people are going to need.”

Asked whether the problem was related to finance, industrial conservatism, staffing or a brain drain, Martin feels that it’s “all of the above.” Pharmaceuticals suffers from the two Cs that lead to the third: complacency through wealth; risk-averse conservatism; and, subsequently, complexity. When you’re wealthy, compared with other industries, that leads to the complacency that leads to complexity, which then stops people thinking.

There’s an old saying: we don’t have much money, so we’re going to have to think. The pharmaceutical industry, unfortunately, despite all its PhDs, BScs and MScs, stopped thinking many years ago. And we need to start thinking … again! You might question how we kick start the thinking process. Is it an external event, such as Amazon closing high street pharmacies in most of the country in the next 3–5 years? If they can deliver books in 5–6 hours, they can certainly derive a way to deliver your medicines in 3-5 hours, without having to wait in line at the local chemist.

It’s that kind of disruptive influence that will affect how pharmacies operate in the very near future. Imagine a similarly disruptive event, such as Google suddenly saying: “We know how to use, manage and interrogate date, so we’re going to invest in a CRO or CMO and we’re going to show you, the pharmaceutical industry, how it’s done,” and then saying to the legislators that this is going to solve all of your problems regarding affordable, quick-to-market medicines. Suddenly, that’s a major game changer.

“Is it going to be that kind of disruptive influence? Will it be political, social or economic? It’s difficult to tell but I don't see that disruption coming from inside the industry. I don’t see pharma companies challenging the status quo or introducing new ways of thinking. We seem to be working in silos of regulation, manufacturing, pharmaceutical and healthcare provider, which means that, currently, everybody’s losing out,” notes Martin.

“The paradigm shift required to turn this situation around is massive. We all know that people take time to change, unless there is a brutal catalyst to effect that change. We've demonstrated with Zika virus, Ebola and the like that when we as a scientific community get our heads together, we can metaphorically move mountains. When suddenly that urgency presents itself, we can do a lot of good things,” he added.

“But when it comes to question of how long is this change going to take, my gut feeling is that, considering human nature, it’s going to take a long time. The salient point is, though, that we don’t have a long time; the clock is already ticking. And yet mindsets have remained static.”

Getting out of the silo

Can Big Pharma afford to keep the silo doors closed when it comes to data, innovation and R&D? According to Martin: “Absolutely not and pharma should get over itself. The reason why we’re such a distrusted industry is because we’re so secretive. The belief that data can be used by our competitors is, in my opinion, a fallacy. We've got to open the doors, after promising to do so for so long, and completely rethink our attitude to failure. The attrition rate in pharma is unbelievable: 90% of medicines that start the journey to market never finish; only one in every 250 compounds that start Phase I eventually get through the entire process, and those statistics remain consistent year after year.”

If we refer to Einstein’s definition of insanity — doing something over and over again and expecting the same result — then our entire industry is insane

If we refer to Einstein’s definition of insanity — doing something over and over again and expecting the same result — then our entire industry is insane. We continue to make the same mistakes because, partly, we are fearful of the reputation of being linked to failure. If a drug fails at Phase II/III, then we should be saying “that’s really interesting, what can we learn from this?” But, because of that secrecy and fear of sharing data, and our attitude to failure, we don’t use that information as a catalyst for continuous improvement, we brush it under the carpet. If we continue to pretend that failure doesn’t happen, then we’ll continue to fail.

You can tolerate high levels of failure when you have high levels of profit. But those profits are coming down year after year. And if they continue to fall, maybe that will trigger a rethink. My opinion is that because we’ve never been fast in the past, we won’t be in the future unless something radically changes.

Martin is adamant that there’s a solution: “There has to be. Right now, everybody’s losing, including the health service, patients and industry. I talk about Healthcare Inc., which is the pharma industry, the regulators and healthcare providers, and we’re all in this together for one thing — ignoring profit for a moment — and that one thing is patient well-being.”

“Unfortunately, I don’t think that’s 100% credible or true in some organisations! There’s no doubt that we’re facing a complex problem, but there is adequate intelligence in the industry to fix it, providing there is a willingness to do so, which comes from an understanding of who the overall winners should be. It’s time for change, brutal change,” concludes Martin.

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