Wednesday, September 12, 2012

The Innovation Value Proposition: What To Expect At This Year's PSA

"Innovation ecosystem" is a buzzword in the biopharma industry these days – but the best way to approach building and sustaining innovation is under debate from all angles.

Most of the focus is on the developed world, where industry is wondering if it can afford to continue innovating effectively using traditional strategies amidst a payer environment focused largely on holding down healthcare costs. The uncertainty has real implications: Note the ballistic rhetoric of top executives at GSK, Sanofi and others about their commitment to conducting R&D in Europe, where reimbursement issues continue to hurt sales.

More recently, some in pharma are beginning to cite emerging markets as sources of innovation. The thinking is that emerging markets, as largely blank spaces ripe for design, are fertile sources of new ideas  that can blossom unencumbered by regulatory, territorial and infrastructure hurdles that in established markets slow adoption and raise costs. With strong government backing, some countries are even beginning to show signs of scientific creativity—ostensibly the epitome of industry goals—note recent developments in China and India. That’s a far cry from general industry thinking, which has pigeon-holed emerging markets mainly as sources of revenue growth and cost savings for clinical development, and lacking in healthcare delivery infrastructure and a deep scientific expertise.

Discussion of how to fix innovation and afford it and more will be the focus of Elsevier’s Pharmaceutical Strategic Alliances conference in New York next week (Sept. 17-19). With Paul Stoffels, worldwide chair of J&J's pharma business as a keynote speaker and others such as Andrew Baum of Citigroup Healthcare and Philip Ma of McKinsey speaking on pharma's looming value crisis, the conference hopes to provide takeaways for best approaches to a changing pharma paradigm.

Meanwhile, IVB spoke to Krishna Udayakumar, head of global innovation at Duke University’s School of Medicine and interim executive director of the year-old non-profit International Partnership for Innovative Healthcare Delivery, about the status of emerging market innovation and its implications for broader global markets. Udayakumar will be a participant on a panel dedicated to “Reverse Innovation,” i.e. innovation in emerging markets, at the conference.
In 2011, Udayakumar helped set up The Medanta Duke Research Institute in Gurgaon, India, a joint venture between Duke and Medanta, to provide early-stage clinical research through proof of concept to biopharma companies. Duke more broadly is looking at new paradigms for early-stage clinical trials and as part of that strategy, it is offering “a new model for academia to work with industry,” Udayakumar said, calling India a “greenfield opportunity to take what we have learned about workflow, patient comfort, and facility design” and efficient clinical research and apply it.  Initially, the founders expected multinational companies to provide the majority of the business for MDRI, but local pharmacos are also taking the bait—implying that local companies are starting to produce innovative compounds.

But innovation in emerging markets is about much more than scientific prowess. Witness IPIHD: the product of discussions on the part of Duke and McKinsey, the consulting firm, to promote and expedite new models of delivering care, largely in emerging markets, that help expand access to healthcare while holding down costs. That’s a goal that should be of interest to everyone in pharma these days—and the hope is that IPIHD’s efforts will not only benefit emerging markets but the broader global arena as well. Indeed, a number of pharma companies are members and active partners on some delivery programs, albeit small ones for now.

Pharmaceutical Strategic Alliances takes place Sept. 17-19 at the New York Marriott Marquis and there’s still time to register.

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