Innovation in today’s environment requires a new mindset
“The importance and potential of innovation in healthcare is evident. So are the challenges: the ever increasing pressure on costs – both the increasingly unsustainable costs to society and the impacts of government budget restrictions in times of austerity. We need to be realistic. Instead of mourning what was, we should look ahead and take heart. There are opportunities aplenty. Which ones will we seize?
Big pharma has already been forced to face this new reality. Some of its previous business concepts have become unsustainable and companies are finding new ways to develop their businesses, often through partnerships. The Life Science & Health sector should be similarly prepared to change its business models. To some, public-private partnership may look like wanting to party without being ready to contribute. Real partnership requires contribution from all, in order to allow benefits for all.
We should attempt a more entrepreneurial and a less passive approach to innovation. That means finding new ways to share risks and rewards. This even more so since in our current healthcare system costs and benefits often fall on different stakeholders in different parts of society. As a consequence, although better and cheaper overall, innovations may therefore not be adopted unless we are able to account for costs and benefits in a more holistic way.
Every successful collaboration involves a trade-off. The ability to assess who your real partners are and what is in it for them, is a key requirement to securing benefits for all partners involved. Identifying all stakeholders and being prepared to share benefits fairly, are key requirements for true innovation in today’s environment. Patients want better health, society lower costs, insurers good price-quality ratios, scientists publications and entrepreneurs business. Public-private partnerships are one way to seek to meet these aspirations. But we must be prepared to look at existing structures in new ways, if necessary to leave old structures and alliances behind. Public-private partnerships must evolve. We cannot hope to build solutions for the future with tools from the past.
As a sector we must not aspire to excel in every aspect of our portfolio. A jack of all trades becomes a master of none. We cannot invest everywhere – we must be willing to make choices, however tough that will be. Focusing our efforts on the most promising fields and projects, at the expense of other activities, will eventually bring the greatest benefits. Only if we dare to do this and only if we find new ways to share risks and rewards, will we be able to forge new trade-offs and forms of partnership that create ‘headroom’ for innovation. This will be the name of our game.”
Headroom for innovation
- Look ahead: Innovation today requires a new sense of reality
- Share: Costs and benefits today are often not on the same balance sheet
- Focus: A jack of all trades becomes a master of none
Joep Pluymen is Chairman of the Management Boards of Organon BioSciences Ned. BV, NV Organon and MSD Oss BV. He is a member of the public-private taskforce that is working towards the establishment of a Life Sciences Park in Oss.