Is It Correct To Preach Innovation To Drug Manufacturers?

A wide variety of potentially marketable medicinal compounds is the lifeblood of the pharmaceutical industry and the first thing that comes to mind when applying for a job as a student. When I worked day and night against the laboratory bench for paper hunting, it never occurred to me that one day I would follow the advice of my academic professor, which was to replace my academic career with a medical company.

I was warned that new ideas must be more rigorous and complex, depending on the size of the company. I had to adapt to a corporate culture that did not forgive the innovative experimental explosion and the wrong decision-making. But the miraculous world of reinvested income flowing back into new drug research can increase any researcher’s concerns about holiday funding.

In my opinion, innovation is of course just a synonym for successful drug development.

I later discovered that was only partly correct. It is not enough for a company to invest in expensive 15-year research to decide on potential new drugs. Marketing the newly developed connections is a bumpy road, not for the weak.

It contains many questions; an increasingly demanding regulatory approval process and a short five-year period during which the merger must bring profits to the company before the patent expires. All bets are on rapidly changing foreign markets, driving more at lower prices because of increased competition for generics.

Therefore, the example of innovation depends on dynamic market needs.

Optimizing L&D expenditure: 

The industry is accused of being left behind in drug design innovation. Small biotech companies are starting to replace large companies to create innovative, quality connections for specific areas because of their focus on science, agile decision-making, inspired talent management, and tight financial constraints1. For example, shortly after the launch of the first innovative cystic fibrosis therapy in Europe, Vertex will bring another connection to the market as it works with GSK and Jansen to bring a new hepatitis C2 compound to market.

At the same time, large firms appear to be in a constant state of clustering with room to improve communication and develop the right mix of metrics that can increase productivity and reduce costs. As Knott suggested in a recent May 3 HBR article, one of the reasons that “L&D spending does not correlate with market value or growth” is because companies do not measure L&D performance. Even with universal, consistent, and reliable metrics based on Edwards Demings’ TQM system, Knott shows that large companies need to reduce L&D costs to offset patent erosion while increasing L&D productivity to manage things. However, for the most part, the new indicator system could justify a larger L&D budget.

Although cost optimization for L&D still looks successful, there are still some successful open innovation strategies, such as the Merck initiative to generate ideas from employees to promote such transformative innovations

Is continuous innovation the key to success in the pharmaceutical industry?

Firms that perform better tend to follow a mix of strategic needs combined with optimal financial management to divert risk from sustainable innovation, e.g. The polyp design or delivery of compounds that are in new drug delivery systems, such as Celgene’s Abraxan, is approved for the treatment of breast and lung cancer.

Technology increases productivity at lower costs: 

Business analytics is also a new technological innovation that helps reduce costs and increase productivity along the value chain when developing and marketing new products. For example, Vertex designs clinical trials in a short period using business analytic tools to minimize study design errors and reduce costs by optimizing the possibility of high-quality testing endpoints.

Organizational restructuring to compensate for patent erosion: 

More successful companies follow an innovation strategy that Christensen describes as destructive by setting up separate divisions or subsidiaries to develop their own branded generic drugs, for example, Sandoz from Novartis Although the subsidiaries are functionally and organizationally separate from the parent company, profits are kept at home. The combination of this strategy is the diversification of flexible business operations based on market needs, as did Abbott after buying Pyramid to sell cheap generic drugs in India.

Optimizing your marketing strategy: 

Fast and efficient segmentation and alignment of new customers can also be achieved using social media platforms. This is an effective way to bring the company closer to its customers and users. The social media platform for patient information, education, and interaction was developed by Lilly & Co, which combined YouTube, Facebook, and Twitter and launched in September 2010 despite regulatory hurdles for the company.

More than 74% of companies have adopted this addition in their communication strategy in the past three years, bridging the gap between companies and end-users to drive marketing, competitive smart research, and enhance company image.

The pipeline may have helped so far but investors are not optimistic that the 2013 results will be promising. Until then, the need for innovation for pharmaceutical companies in Europe and the United States seemed impossible to overcome under extreme price pressures.

When selling new products, it is difficult to cover losses due to patent erosion on the competitive market for generics and the external environment, caused by regulations and price pressures. Instead of straying from the classic Ansoff framework, Nagji and Tuff suggest that a winning strategy can be a combination of innovative approaches in the right balance.

The management of existing/expired drugs, expansion of adjacent “new businesses”, and the development of new drugs to meet growing epidemiological needs, especially in developing countries, maybe mandatory within the same enterprise.

Total Innovation Management works for the technology and telecommunications markets. This can be an appropriate survival tactic for drug companies, eg. For example, only having a new set of drugs, supporting existing customers with face-to-face sales promotions, relying solely on marketing to cover delays in research and development or sales. only in Europe or the United States seems a shortcut in the current drug market.


1. ‘Pharma 2020: Which Path Will you Take?’, (2007) PricewaterhouseCoopers Pharmaceuticals: ConnectThinking: 1-48

2. Vertex Q3 2012;

3. Knott A., (2012) ‘The trillion-dollar R&D fix’, HBR, May: 77-82

4. Abraxane SPC;


6. Novartis Q3 2012 Results;

7. The Economist (2012) ‘Battling borderless bugs: Western and emerging-market drug firms are invading each other’s turf’, 12 Jan: Business print edition;

8. Ghinn, D. (2012) ‘Pharma gets social’, Jan:

9. Cognizant Report (2012) ‘74% of Pharma companies have adopted Social Media…’; Jan:

10. Nagji, B. & Tuff, G. (2012) ‘Managing your Innovation Portfolio’, HBR May: 5-11

Disclaimer: The views posted in this article are the result of personal reflective thinking on the already published articles, analyses and reports stated in the References; the current conclusions hypothetical and subject to change in light of new, openly published evidence. 

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