Sunday, August 17, 2014
Landscape Disrupters Are Becoming Part of the Pharma’s Playing Field
In recent years genetic testing has been introduced (23andme, Navigenics, deCODE and others). It has caused a bit of for and against uproar. Information from this testing could be used for changing the lifestyle that could avert diseases one might encounter with age or even could be used for personalized medicine. Better lifestyle could lower pharma sales and an unacceptable scenario by the current players. Others consider that the generated information could be abused and invade privacy and would want to block such testing.
Similarly companies like Theranos and Nanobiosym are introducing low cost, efficient and speedier diagnostic testing. This is happening due to better application of existing physical sciences and engineering principles along with advances in microchip technologies. Speed and lower costs are causing quite a bit of angst at the companies who are currently involved in this work and had thought what they do cannot be done by anyone else.
Diagnostic test results with newer technologies offer wide range of information that may not require repeated or additional testing if the physicians want to have supplementary information. Using the existing technologies additional testing would be necessary if such information. New companies will impact the revenue base of the existing companies since their costs are lower. These technologies will lower healthcare costs and are a perturbation.
Above are few of the disruptive companies that are changing the pharmaceutical diagnostic playing field and giving people opportunity to manage their life style. The established players frown upon loosing control of large population base and revenue. Privacy and other concerns are being raised to limit wide spread use of methods. Every possible legal argument and scare tactic is and would be made against information that could improve our health and lifestyle. Different pro and con arguments and lawsuits will come through till all involved understand value of testing and privacy safeguards are put in place. After adequate safeguards these companies will eventually succeed.
Driverless car is a technology leap that is causing a perturbation in the automotive field. Google’s thrust has been formidable and is well known. Automotive companies could have fought the technology but have decided to join in. They do not want to loose the customer base. Microchips with smartphones have changed global lifestyle landscape. Origami engineered robots being explored at Harvard and MIT once commercialized could revolutionize the global industrial landscape.
Edison, Gates, Jobs, Ford, Musk and others created new landscapes. History tells us that change is possible and if the industry does not change, revolutionary and free wheeling explorers who are not part of the current landscape make the change. They create a very different business model because the current model does not serve the need they envision.
It is ironic that many see a similar change is needed in pharmaceuticals to make the drugs affordable to about additional 40% (2 to 3 billion people, my conjecture) of the global population. Existing pharma companies will like to capture this customer base on their terms of drug availability and pricing. However, their current business strategies and practices are making this extremely difficult. Families have to decide how to manage their money between food and medicines and are a roadblock to pharma’s ambitions. Alternates to achieving the goal do exist but need different business strategies.
Additional mavericks similar to diagnostic or lifestyle changers are needed for the pharmaceuticals. I am not sure anyone has taken up that role. Its time may have come. Companies like Emerald Therapeutics could assist or be the game changer. Wouldn't it be interesting if few outlier companies (small molecule active producers and their formulators) could create a business model that will have a larger customer base for limited drugs just to show what all is possible and in turn lower drug costs and have high profits? Such an opportunity would be worth exploring.
Girish Malhotra, PE