Today’s guest blog comes from Ido Hadari, CEO of Treato. As an innovative brand intelligence service for pharmaceutical marketers and agencies, Treato Pharma provides real-time insights into patients’ opinions and attitudes, enabling them to understand competitive positioning, determine priorities, and enhance patient engagement. This post originally appeared on Treato’s Blog.
Earlier this month, I spent two days in San Diego attending the 55th annual PhRMA meeting. Listening to the industry’s leaders, innovators and researchers, these are some of the key challenges that pharma innovation will need to overcome over the coming years, affecting patients, physicians and industry as one:
- Startup funding drying up – Venture capital has almost disappeared from early stage startups. They are focusing on later clinical stages, typically waiting for phase 2. This poses a major risk for innovation in the industry; to think that there will never be another Genentech rising from within the industry. The reason for this is risk aversion. True biotech is a long process that takes a long time to deliver ROI for the LP, often an investment horizon of 10-15 years. As a result, access to VC capital in early stage is drying up and consequently, so is the innovation pipeline.
- Budgets getting squeezed – Another major issue is the decreasing budget for R&D. The NIH budget has been and is being cut and this impacts grants and research. This is a national strategic problem impacting the US’s ability to compete globally. The industry is cautiously optimistic; to quote Winston Churchill: Americans always do the right thing after they have exhausted all the other alternatives.
- FDA casting a shadow – Regulation is proving to be an obstacle in the eyes of many in the industry. In the attempt to balance safety and innovation, the sense among PhRMA participants is that the bar is switched to caution, leaving very little room for innovation in the way pharma develops products, tests them and takes them to market.
- Business models need to evolve – How pharma companies get paid is becoming a riddle. The traditional models are becoming less and less applicable. A recent Forbes estimate has calculated that the cost to get a new drug to market may be as high as $8B. On the flip side of these rising costs, gone are the days of multi-billion dollar blockbuster drugs. With recent proposed policy change banning “pay for delay” and other restrictions, the industry will need to define how pharma can justify these investments in a manner that would encourage innovation and pipeline expansion.
- Liability – There’s an overall sense throughout the pharmaceutical industry of exposure to legal action for “doing the right thing”, from clinical trial efforts through marketing activities. Big pharma is often a target for individuals and organizations who scrutinize every step they make. While the benefits of these watchdogs is obvious, it also lowers pharma companies’ appetite for actions that could drive innovation and patient benefits.
Interestingly enough, aside from the usual ways to address these concerns which were typically in the hands of the industry, thought leaders have started recognizing that the solution may actually lie with those who will suffer the most and have been silent listeners so far: the patients. The argument is that patients need to support not only research. They need to become a part of these discussions: Instead of being informed of new policy – participate in setting it, instead of waiting outside the budgetary discussions halls – sit through the discussions and take a proactive role in them, instead of taking a backseat on topics such as regulation, commercial models and federal budget allocation – move over to the driver’s seat alongside traditional stakeholders. The patient role here is critical. They are the only ones the can resolve some of these issues.