This document discusses four key things that pharmaceutical companies need to do in order to successfully innovate beyond traditional drug development. These include: 1) Obsessing over solving their customers' (the NHS) biggest problems like funding shortages and quality of care expectations. 2) Using customer feedback to guide the generation of new ideas. 3) Applying evaluation criteria for innovations that focuses on win-wins for all stakeholders, not just financial metrics. 4) Building partnerships to develop solutions by tapping existing specialist skills and technologies, rather than trying to do everything alone. Successful innovators will be those that understand customer needs best and consistently deliver broader value through partnership to address major healthcare issues.

1. Pharmaceutical Market Europe March 2016 www.pmlive.com 31
In association with
high and with CQC inspections
dominating the headlines, the
perception is that healthcare quality
is on the decline with ‘three in four
NHS hospitals failing’. Pharma
needs to embed itself in the broader
ecosystem and understand the
myriad things the NHS and its
customers are trying to balance.
Understanding this context - the
priorities of its customers - and
anchoring around these is key.
Only by getting close to the issues
and becoming a trusted partner
can Pharma really understand
the problems and be part of the
solution. Pharma is in a unique
position to take an end-to-end
patient-centric approach to focus
on patient needs, dissatisfactions
and inefficiencies resulting from a
fragmented healthcare system and
leverage leading technologies and
service design to tackle these needs.
2. Using the voice of the customer
to direct ideation
As in development, iteration is
essential so that propositions are
founded on market intelligence
and patient need, and harness the
most viable and complementary
partners. It is important to adopt
a ‘no idea is a bad idea’ mentality
for ideation sessions and capture
insight from every possible source
including your own organisation
and other industries. Service
G
oing ‘beyond the
pill’ has become a
hackneyed saying in the
Life Sciences industry
over the past few years, with a lot
of talk but little action. Where
there has been action it has
failed to deliver on a significant
scale. Successfully innovating in
‘non-traditional’ ways is difficult
and requires a clear vision and
strong leadership from the top to
challenge the ‘muscle memory’
that has been built up over
the past 20 years. Companies
that are able to successfully
innovate at scale have a laser
focus on their customer’s main
issues and work in partnership
with them to benefit the entire
health ecosystem. Obsessing
over customers’ needs is the
only way to continuously
maintain a healthy pipeline
of innovative ideas which
is grounded in real patient
insight which directs ideation
and proposition development.
Leading innovators focus on
getting four key things right:
1. Obsessing over solving your
customer’s biggest problems
The NHS is facing a funding crisis
with 88% of acute NHS Trusts
facing a financial deficit by the end
of 2015/16. Expectations around
quality of care have never been so
concepts can then be created to
guide the market scan process to
identify potential partners and then
flesh out the business model with
a clear view of how value will be
created, delivered and captured.
3. Applying transparent and
impartial assessment
How innovation is measured in
this space is critical to its success.
Evaluation criteria need to be
broader than traditional financial
metrics such as NPV and IRR,
which will often kill innovative
ideas before they have had time to
develop. Measures should focus on
the areas of win-win between the
NHS, HCP, patient and pharma,
and typically be milestone-based
in the early days. Tools can be
developed that support the
assessment of opportunities in
terms of the value to the healthcare
system, the ease of implementation
and the potential to deliver a
strong return to the company. It
is really easy to add value to the
healthcare system but very hard
to extract value - having the right
measures help ensure that value
creation is a two-way system.
4. Building partnerships to
develop propositions
The most agile and successful
innovators don’t try to build
everything themselves but tap into
specialist skills and technologies
that already exist in the market.
Leaders adopt a ‘partner before
build’ principle that benefits them
in terms of minimising risk, the
cost of development and speed
to market. For innovation to be
sustainable Pharma must commit
to putting the critical enablers of
effective innovation in place so it
doesn’t become a one-off thing.
To do this Pharma must maintain
a constant flow of opportunities
to be explored, qualified if viable
and then developed (see diagram).
This enables the development of a
six-month sprint cycle to develop
the most viable and valuable
propositions. By developing
structured innovation programmes
Pharma companies have the
opportunity to sure-footedly
experiment in innovation, build
its capability and deliver a return.
This approach saves costs, builds
strong relationships in the market
and proves the concept of a larger
innovation business to the board.
The industry is going through
a period of rapid change and
there is growing evidence that
the winners will be those who
understand their customers the
best, become their trusted partners
and consistently deliver a broader
value proposition and innovation
to tackle their customers’ biggest
issues. The healthcare system is
full of opportunity for innovation
that delivers a win-win for all
with the first movers quickly
emerging as the leaders.
Focus on solving your customers biggest
problems to create shared value
Aaron Bean is a director, Daryl
Perry is a manager and Max
Higgins is a senior consultant
at Life Sciences at EY Advisory
The growing necessity for
pharma to become a true health
delivery partner of the NHS
Aaron bean daryl perry max higgins