Who’s responsible for managing and coordinating the Innovation center for your Managed Markets and Pricing group? I’d be willing to bet that it’s not centralized, not properly funded, and working on the wrong things. It’s hard to ‘fix a plane while you’re flying it’ – as one of my favorite mentors likes to say.
We all know the reasons that Innovation doesn’t get enough attention in the Managed Markets functions within medium to large pharma. And, no, I’m not talking about the work that you’re doing getting ready for so called ‘innovative’ contracts. I’m talking about preparing your organization for the tectonic changes that are coming through innovative technologies, blockchain, population demographics, etc. I realized recently that somewhere between 60 and 80% of my time in-house was spent on innovative programs – that’s a LOT of time spent on thinking about the future.
Reasons to consider making innovation a full-time focus of a single individual within your Managed Markets team include:
- Skunkworks yield results
- If you’re not innovating, you’re working on incremental process evolutions and are unlikely to be industry leaders
- The future is coming, and not everybody can be a leader, but there’s no reason to lag behind
Let’s look at each of these:
#1) The history of skunkworks goes back to at least the Allied response to the Second World War. The idea that people are more innovative, especially when viewed in terms of results per unit of time, when focusing solely on innovative projects makes intuitive sense. However, how many managers do you know who can say, ‘while I have no idea about the value of the project or when it will be delivered, ‘SURE!’ let’s green light it.’ But it’s like R&D for your managed markets function. Without investing time, energy, and money into innovative approaches how do you know whether your planned improvements in your operations are world class?
If people and teams have daily tasks to support the current business AND a mandate to innovate, the day-to-day tasks will always trump thinking about building the future. Today’s fires ALWAYS burn brighter than tomorrow’s potential conflagrations.
#2) One of the biggest frustrations I’ve had in my professional career is how much of the business calendar is devoted to focusing on incrementally fixing fundamentally broken business processes. I’ve spent an inordinate amount of time developing integrated managed markets databases, sometimes because the working one we inherited was broken through mergers and acquisitions. How much of YOUR time is spent on building (for) the future? Clearly every successful biopharma company puts an incredible effort into building LAUNCH strategies – and I’d like to think that we’re pretty good at it. But what about capturing the learnings from what worked during one launch and applying it throughout your organization? What about building the contract management application of the future? Who’s working with finance on the next generation GTN solution for forecasting and monitoring your progress including coupons and copay cards each month of these launches? It’s very difficult to be both a best-in-class operator while being a world-leading innovator – in fact, there’s an argument to say that those are two different professional profiles entirely.
#3) One of my favorite lessons from business school was the fast follower theory. While it’s exciting to be a true innovator, it’s often even more profitable to be a fast follower – and specifically building capabilities to respond to competitive developments is the mark of a true strategist. For example, during my days guiding global pricing for Bausch + Lomb, we made a lot of money through taking strategic OTC price increases around the world. In every case, we considered the relative market position of the brand, the likely competitive response, AND the wholesaler/retailer responses. It was critical to understand these competitive responses from both a directional and timing perspective, to properly forecast when our price increases would generate profitable sales. And, most frequently, our competitors HELPED our cause by being fast followers and matching the strategic direction of our price increases (they didn’t need to ACTUALLY match our price increases, but that’s a matter for another blog post…)
When your competitors innovate, what can you copy quickly and adopt in your organization? You don’t have to follow every lead. Being a fast follower means that you can potentially avoid disastrous innovative ideas, but you need to build an agile enough organization to quickly follow others’ leads.
Where does this lead? There are two options – create a center for innovation within your Managed Markets team or bring in consultants with the ability to translate best practice ideas to your organization. Here’s where the insights from a company like ChiralLogic shine. We have the strategic thinking to keep up with consultants like McKinsey, Deloitte, and BCG. This is matched with exceptional domain expertise and recent launch experience from INSIDE pharmaceutical companies. It’s very difficult to understand the quality of a company’s innovative ideas internally; however, the pleasure of being independent is that I can now see where we were innovative and where we were lagging.
So dedicate someone from your team to be the champion of innovation for your managed markets and pricing team – and have them give us a call, we’re happy to help.