There is a crisis of innovation for incumbents in the biopharmaceutical industry that should concern all of us. Once innovators who were responsible for some of the most significant advances in medical care the human race has seen, these organizations have become overly confident in, and in some instances paralyzed by, what made them successful in the past. Blinded by their historical success, they have created barriers that have inadvertently restricted their sources of innovation to the biopharmaceutical product itself – versus seeing the bigger picture and opportunities to impact healthcare in a broader context. They have shifted focus towards increasing profitability at precisely the time they should be growing investment in and mobilizing their top talent towards new sources of innovation. The uncertainty associated with this dynamic threatens the continued evolution in medical advances that we have come to take for granted in modern society.
In this book, we examine the evolution of the biopharmaceutical industry to understand how it became what we term a “unicorn industry” with a unique, US-centered business model that has led to multiple blockbuster products (aka: unicorns) year after year. We explore how past success has created perceived barriers to innovation diversification beyond the chemical or biological-based biopharmaceutical product and highlight the warning signs of industry’s demise. On one hand, technology companies like Google and Samsung are developing FDA approved software and digital therapeutics; on the other, public opinion on drug pricing has reached a tempo where government now feels more empowered to regulate it. Given these circumstances, we examine why the current business model of this industry may at best be sustainable for the next 20 years, barring any significant disruption within this timeline. We define a potential pathway for reigniting the industry’s’ growth engines by broadening the definition, sources, and enablers of innovation beyond the molecule.
We introduce and advocate for the 80-80 Rule: “Being 80% confident that you will only be 80% right the first time should be normal.” It’s a theme that emphasizes speed and willingness to embrace a degree of uncertainty, both of which must exceed that of the historical product discovery/development model of the industry to overcome internal barriers to reignite growth. It advocates the underlying theme of “fit for purpose” that must be adopted by the industry to prevent an accelerating demise and displacement of its position in the healthcare value chain by disrupters from outside the industry. The 80-80 Rule sets the standard for redefining innovation as a platform to reignite the growth engines of the biopharmaceutical industry.
Why do we care? Because having been inside, we know that the industry has the in-depth scientific knowledge and commercial expertise to solve for human health challenges and develop meaningful solutions that go beyond the molecule, if it chooses to.