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Published: November 27, 2012
 / Winter 2012 / Issue 69

 
 

A Strategist’s Guide to Personalized Medicine

Retain flexibility. Place a premium on portfolio management skills, determining as early as possible which molecules to advance from research to development, and when to drop a hitherto promising candidate for which the PMx case is weak. Similarly, remain technologically agnostic; don’t commit to only one biotechnology research platform.

Embed PMx capabilities within the existing capabilities system. In an era of constrained spending and a vital need for R&D efficiency, essential PMx capabilities must be identified and integrated into the existing value chain. Build the kind of organizational discipline that eschews drug candidates with a potentially large market but lower probability of success. Favor smaller-market drugs that are more likely to succeed. With this approach, you may reap many benefits, such as faster clinical trial enrollment, faster achievement of goals, lower clinical costs, and greater likelihood of success.

Access new capabilities through partnerships — for example, for diagnostics development and commercialization. Ensure access to world-class diagnostics without significant capital outlays by collaborating with assay developers and other companies. Understand that these are truly strategic partnerships that share fully in the creation of value; they are not the routine outsourcing of a fungible function.

Build a sales force with new capabilities. Sales teams will need to pair targeted therapies with sophisticated diagnostic tests. In addition, they will need to be well versed in biological and disease pathway intelligence, and well informed about patient segment attributes that can impede successful treatment.

Managing a Disruptive Innovation

Like all innovations, personalized medicine has been the focus of a great deal of hype, and it is worthwhile to take a few steps back to put it in perspective. It may be oversold at times — particularly in oncology, where it has been heralded as the next “cure for cancer.” Because cancer is many different diseases, with many different modulators and multiple mutations even within a single tumor site, personalized medicine cannot be that kind of cure. It will never be a panacea.

But it also is not a placebo. Eric Topol, a cardiologist and geneticist, and the current director of the Scripps Translational Science Institute in La Jolla, Calif., paints an optimistic picture in his recent book, The Creative Destruction of Medicine: How the Digital Revolution Will Create Better Health Care (Basic Books, 2012). He proposes the integration of basic PMx tools — such as biomarkers for specific pathways and specialized diagnostic technologies — into everyday life. Perhaps biomarker-sensitive devices embedded in mobile phones could detect cancer cells circulating in the blood or warn people of an imminent heart attack.

Topol also says that many of these innovations must overcome the medical community’s profound resistance to change. In The Innovator’s Prescription: A Disruptive Solution for Health Care (McGraw-Hill, 2009), Harvard Business School professor Clayton M. Christensen and physicians Jerome H. Grossman and Jason Hwang suggest that PMx could be disruptive in a way that the healthcare industry cannot long ignore. “The advent of precision medicine,” write the authors, “heralds product-line fragmentation in pharmaceuticals. Volumes per therapeutic compound will drop significantly, as the number of therapeutic compounds expands. Blockbuster drugs will become rare. This will necessitate a reshaping of the business model of today’s major pharmaceuticals companies because — to borrow words from oil exploration, in the future there will be fewer big gushers to cover the costs of drilling a lot of dry holes.”

An ongoing theme in Christensen’s work is that the leading practitioners of an old order tend to be the victims of disruption, not the initiators. But The Innovator’s Prescription proposes that today’s healthcare leaders can educate themselves and play a major role in disrupting their own businesses, as IBM did when it introduced its personal computer. There may not be much time to make the shift; across many disease areas, PMx and novel diagnostics are already changing the practice of medicine, and are already accepted as a new way to play in the life sciences market. That is why personalized medicine should be on the senior agenda of every pharmaceutical company. Major new capabilities are not built overnight, and mind-sets are slow to change. Some leading companies are already moving, and so are major stakeholders like payors and providers. The time to act is now. 

 
 
 
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Resources

  1. Marcus Ehrhardt, Robert Hutchens, and Susan Higgins, “Five Steps toward a Revitalized Pharmaceutical Supply Chain,” s+b, Spring 2012: Companies embracing personalized medicine will need to build these operational capabilities.
  2. Gil Irwin, Art Kleiner, and Joyjit Saha Choudhury, “When Disruptive Integration Comes to Health Care,” s+b, Mar. 3, 2010: The Innovator’s Prescription coauthor Jason Hwang talks about the next wave of healthcare business models.
  3. Alex Kandybin and Vessela Genova, “Big Pharma’s Uncertain Future,” s+b, Spring 2012: As the era of the blockbuster drug comes to an end, the industry must cope with new unknowns.
  4. For more thought leadership on this topic, see the s+b website at: strategy-business.com/health_care.