Axel Schumacher, co-founder and Chief Scientific Officer of Shivom, highlights the need for Big Pharma to adopt new technology.
Of course, we know that pharma is often innovation-averse.
The healthcare industry has been full of disruptions in the last decade, ranging from the explosive growth of medical devices and the Internet of Things to genome editing and incredible advances in data analysis using machine learning that could reshape diagnostic medicine. Blockchain might be the next disruptor, addressing the industry’s biggest challenge, patient data.
Almost exactly a year ago I published the “Blockchain and Healthcare Strategy Guide”, a book that to my surprise quickly became the standard blockchain compendium for the healthcare industry. Interestingly, the overwhelming response I got from all over the world came primarily from governments, consulting firms, clinical management, patients and patient support groups, and investors.
The feedback from stakeholders in the pharmaceutical industry was… well…, mild to non-existing. Of course, we know that pharma is often innovation-averse. In the past, big pharma could rely on working business models and cash, simply purchasing or licensing new technology or entire companies – if they are believed to be valuable – for long-term gains. However, this strategy only works as long as pharma does not have any well-financed, agile and fast-moving competitors.
Yet, with US IT giants like Google, Amazon and Apple as well as the Chinese players Tencent, Alibaba and Baidu aggressively moving into the healthcare space, we have an entirely new playing field. As pharmaceutical companies look to transform their traditional business models and rethink the value chain, they must also restructure their product and service offerings. To restructure, they need partners to help navigate an increasingly complicated market. They could even leverage technology such as blockchain to become health information companies and disease management organizations themselves.
Blockchains (and other distributed ledger technologies) have been slow to catch on in healthcare. Numerous start-ups are working on applications for genomics and precision medicine, and solutions for patient data management, pharmaceutical provenance, clinical trials, and the administration of healthcare and insurance. These are just the beginning, with the potential to reinvent the pharmaceutical ecosystem.
I’m sorry to tell you this, but just because you or your team don’t like something, it doesn’t mean you should not invest in it.
However, so far, the innovation is only coming from non-pharma players. For example, this year, Ali-Health, the medical and health arm of Alibaba, launched China’s first medical blockchain application, the ‘Medical Treatment Alliance + Blockchain’ pilot project, in cooperation with Changzhou city in East China’s Jiangsu Province.
Of course, although most players in the pharma space recognize the importance of new technologies and the urgency of understanding the changing R&D landscape, unfortunately, they do not act accordingly. To give one example; one Top 20 pharma company I was visiting recently decided to invest in one position (I repeat the number: ONE) to investigate blockchain and make sense of this booming technology.
At the same time, Chinese internet companies such as Tencent and Alibaba are involved in the race to recruit blockchain talents in the thousands. Distributed ledger technologies are still in the early stages of development, which means useful application models need to be built. However, this process has to start now. Introducing blockchain to our businesses is technically feasible, but we have essential roadblocks to overcome. Luckily there are ways to get your organization involved now:
- Leave your comfort zone.
Invest in mastering new technologies. Find the right people to teach you, while simultaneously teaching them your business so that you understand one another. Even a rudimentary knowledge of what drives people (innovators, startups) to work with you will mean you can get what you need from them and help them along the way.
- Don’t drain the swamp – get in it.
To move forward, you have much convincing to do. For that, you must understand why your company behaves as it does. Even if it’s too complicated to find all the reasons in detail, just seeing some causes makes it easier to deal with the behaviour of your company – and to change it.
By being prepared to understand, your team can let go of being defensive and innovation-averse. Let’s face it – the healthcare ecosystem is a swamp and people are usually standing on the edge, waiting and wondering how to drain it but do not dare to dive in. However, to get stakeholders out of this swamp, you need to get in with them and agree on how muddy it is.
Only then can you combine forces and get out together instead of pulling them out from the edge one by one. You may need to graciously confer your permission to your team to be worried or sceptical. Once your team knows they are allowed to be sceptical, they can relax and work on adopting new technologies and solutions for themselves. Just remember your team’s limitations, if the restrictions seem to be too severe:
- Do it anyway.
I’m sorry to tell you this, but just because you or your team don’t like something, it doesn’t mean you should not invest in it. In this context, blockchain and AI come to mind. After talking to various colleagues in Pharma, I can understand the uncertainty and fear around implementing innovative technologies. I get this.
AI may threaten our intellectual superiority, and nobody understands what all those fancy deep learning algorithms really do, they may even jeopardize our jobs, while blockchain still reminds many of money laundering and the dangerous and treacherous depths of the dark web. However, almost all of us are guilty at times of thinking our way of doing business is best and that innovators who think differently from us are wrong or at least less right.
Blockchain technology is a great way to start investing in yourself and your company’s future. This is important to our patients, who will now have ownership and control of their data; all the while being able to manage who has access at any given time. It enables us to put the patient at the centre of the healthcare ecosystem and increase the security, auditability, and privacy of sensitive health data and interoperability of systems that contain such personal information.
However, blockchain’s success depends on whether all stakeholders are willing to adopt its technical infrastructure and its core principles. It’s up to you to overcome resistance. Going where it hurts will provide your business to tap into an entirely new world of data and new ways of doing profitable business.
Follow Axel on Twitter: MethyLogix