Pharmaceutical and healthcare companies face a continuing backlash against rising costs, while facing the challenges and opportunities of the aging population and the looming patent cliff on many high-margin drugs. But these may not be the biggest problems for traditional companies in the sector. We can already see the beginnings of a new, freelance citizen bio-tech research ecosystem emerging. A bio-hacker space was crowdfunded on Kickstarter as far back as 2010.
That means we just might be moving to an open platform and ecosystem model in pharma. Companies like GlaxoSmithKline have tried to respond to the “open science” movement, placing over 10,000 possible malaria drug compounds into the public domain. At the same time, drugs companies and medical device companies are being outpaced by the quantified self movement and tech companies looking for a slice of healthcare. Even car maker Nissan is in there. So too is printer company Epson.
It is a little scary, then, that pharma and healthcare came up short in the recent Elastic Innovation Index that rates sectors and companies on their innovation capabilities. The table below shows how pharma stacks up against tech companies across five categories of innovation – social, platform, leadership, strategy, and business process.
Comparing sectors for innovation: Healthcare vs. technology
These are drawn from a study of innovative companies but one based on innovation input metrics – i.e. capabilities rather than the more traditional outputs, like products. It’s important to underline that the comparison is between the best in class in both sectors. It is not comparing great innovators in tech with poor innovators in pharma and healthcare.
Actually there is a lot to like in companies like Bayer – its new materials science division is bridging the gap between medical and high tech through new materials. Subsidiary ViviTouch provides a polymer actuator layer for headphones (and is shopping around the technology for smartphones). The layer creates a tactile sensibility in the bones and skin around the ears, giving an unprecedented sense of “being there.”
Still, perhaps the biggest lag is in the area of platform technologies and ecosystem strategies. GE is trying its hand here with healthymagination. In breast cancer GE is trying to create a new ecosystem in data and analytics around diagnosis. That means tempting data scientist in to work alongside more traditional health diagnostics. Despite a promise of a $1 billion that platform is not generating the type of ecosystem we have seen in apps.
Platform and ecosystem strategies are system changers. There are active programs in robotics (the Robotics operating system), advertising (from Google Ad words onwards), smartphones, mobile chip design, social networks, open engineering and manufacturing (where the emphasis right now is on modularity. In healthcare, ecosystems are a new concept.
Social might be another solution to innovation in healthcare. Companies in these sectors are not great practitioners of social business, at least partly due to regulation and fear of liability. If I were looking for one way to kick-start a healthcare ecosystem, though, that would be it.