What Big Pharma Can Teach Us About Innovation

Engineers and designers trying to sell products in the pharmaceutical industry must meet two new demands: true innovation and cost savings.

Between 1970 and 2000, the pharmaceutical industry went through a period of rapid growth with a series of unintendedKim Ukura consequences.

In an industry as complex as healthcare, rapid growth dilutes management and scientific expertise quickly, losing industry experience and limiting the impact of new R&D. As a result, the big pharmaceutical industry has found itself limited by slowing revenue growth, huge and inefficient infrastructures, and less effective marketing and sales.

At least, that’s the argument made by Pharmaplasia author and pharmaceutical industry consultant Mike Wokasch, who I had the chance to hear speak at a recent conference on biotechnology. His presentation was specifically about selling products into the pharmaceutical industry, but I interviewed him afterwards to learn more and ask him about how some of his suggestions might apply engineers in other industries.

Engineers and designers trying to sell products in the pharmaceutical industry must meet two new demands -- true innovation andWokasch cost savings that can be backed up with research -- Wokasch explained.

By true innovation, Wokasch said he means that the industry is not looking for similar products or products that solve an already fixed problem. The industry doesn’t want another cholesterol drug; they want to fight a disease we can’t fight now.

Cost-consciousness will likely continue to be a factor as the recent healthcare reform bill goes into effect and the entire industry starts paying even more attention to pocket change. Wokasch suggested that products designed to help deliver drugs better or help patients remember to take medication, for example, will have a space in the new industry because there is a value placed on effective treatment.

“Anything that can help the pharmaceutical industry reduce the cost of bringing products to market will fall on a more receptive audience than it might have even five years ago,” Wokasch told me.

“As healthcare reform unfolds, there will be more focus on the value you’re bringing to the table in terms of real dollars out of the system,” he continued. “Help from designers early in pharmaceuticals or at the end of the system itself, those are areas that are going to be of great interest.”

Even something like building design can make a difference. Wokasch passed along a story about how hospitals in Ohio are using research to improve patient facilities -- evidence of how design that saves money, and improves returns, has space even in a tightening industry.

The article explains that evidence-based design can increases the cost of construction by as much as 5 percent, but that administrators agree these changes decrease operational costs.

This trend is evidence of two of Wokasch’s biggest arguments -- the industry wants to save money in the long term and looks for ways to do that, and any reforms need to be supported by as much scientific evidence as possible.

My last question for Wokasch was whether these changes in pharmaceuticals -- innovation and lower costs -- could apply to other industries. His answer? It depends on consumer expectations.

'If you’re in a consumer-driven market, it depends on the business strategy,” he explained. “You’d like to think these ideas are generally applicable, but not necessarily. If you go to the luxury car market, I don’t think those two things necessarily are what the luxury car market strategy is all about. They want the best of everything -- if I can design for less or make it more innovative, they’ll take it, but the cost part is less of a factor.”

However, Wokash also pointed out that design engineers that can deliver innovation at a lower cost are a value in every market. Successful engineers should continue to innovate, but pay attention to the impact of value and cost to customers.

Thoughts on how changes in the pharmaceutical industry may be similar or different from other evolving industries? Are cost savings and innovation new goals, or goals that have always been around? Share your thoughts in the comments or e-mail me at kim.ukura@advantagemedia.com.

You can read more about Wokash and his book at www.pharmareform.com.

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