Disruptive innovation in the pharmaceutical industry: bane or panacea?

2 March 2017 (Last Updated March 2nd, 2017 04:56)

“Disruptive innovation” is a powerful concept coined by Harvard Business School Professor Clayton Christensen, and has been in play in a variety of industries such as high tech.

Disruptive innovation in the pharmaceutical industry: bane or panacea?

“Disruptive innovation” is a powerful concept coined by Harvard Business School Professor Clayton Christensen, and has been in play in a variety of industries such as high tech, with the introduction of personal computers and cell phones initially, followed by the mobile internet, the cloud, and the internet of things, as well as in medicine, with the opening of medical clinics, competing with traditional doctor office practices.

While many examples of disruptive innovation and technology across industries abound, it is significantly underutilized within the pharmaceutical industry. A variety of studies have documented the need for innovative approaches and disruptive technologies to rescue the currently stagnant drug discovery and development enterprise. A paper presented to the National Academy of Medicine (NAM) in July 2016 summarized the results of interviews with 25 leaders from various sectors of the drug development industry, including the strengths and weaknesses of the prevailing model, opinions on future paradigms, and how to achieve transformation in the industry. 

In general, those involved in the drug discovery and development enterprise are open to change in order to achieve greater success, but there are variations in what that change will look like, and the NAM paper describes three very different versions of the future. The first vision suggests that the pharmaceutical industry go as far as shifting its focus entirely to healthcare delivery versus drug discovery and development, given all its accumulated knowledge in patient-centric issues. In turn, this would leave the space wide open for unimpeded innovative disruption of the drug discovery and development enterprise.

The second vision describes a more conventional disruption, that of employing technologies that will be paradigm shifting for medicine and clinical research, while the third addresses the emergence of a new and complex ecosystem arising from a new and innovative business model in the industry. One of the key issues to consider, however, is whether the innovative forces will come from within or outside of the industry (internal versus external disruptors). Considering what is at stake and the scale of the undertaking, it would seem there is room for a variety of industries to bring value to the enterprise.

The flip side of any new paradigm-shifting disruptive innovation is that it could be somewhat disadvantageous to already well-established companies in the industry and generate resistance. However, the introduction of a threat to the continued success of a few established companies may actually have the effect of prompting these companies to join in on the use of disruptive innovation. There is also a great deal of risk to companies choosing to take on innovative and potentially disruptive approaches. But in the spirit of creative approaches, companies find funding solutions and ways to mitigate costs with other enterprises, from government to other private entities and even individuals with available resources. 

There is no doubt that disruptive innovation in a variety of industries has met with high levels of success, with the eventual adaptation of the more firmly entrenched companies to this approach. Furthermore, in-kind utilization of disruptive innovation within the pharmaceutical industry, while serving initially as a bane to some of the more well-established companies, could eventually prove to be the panacea urgently needed for greater success in developing therapies to treat and prevent human disease.