Japanese drugmakers lead the way in digital innovation
Bob Oliver is president and CEO of Otsuka America Pharmaceutical. Photo credit: Duncan Kendall
Bob Oliver is not the type of person who calls out his colleagues. He's not big on trash talking or Monday morning quarterbacking. But when he's asked what separates the health-tech zealots from the pretenders, the true innovators from the me-toos, Oliver is quick to identify an obvious tell.
“It's the [companies] that say, ‘We're not afraid to fail. We tell our people that it's OK to fail,'” he explains. “When you're dealing with something as new as a lot of digital medicine and health-tech are, and something that requires you to think differently than you always have, not everything is going to work. Of course you're going to fail. But there's failing and moving on, and then there's failing and learning from it.”
Oliver, president and CEO of Otsuka America Pharmaceutical, has more credibility than most to critique efforts in and around the space. In September 2015, the company became the first to have a new drug application for a true digital medicine — Abilify embedded with an ingestible sensor made by Proteus Digital Health — accepted by the FDA. However, the application remains in flux. This past April, the companies received a Complete Response Letter (CRL) from the agency withholding approval and requesting more information, but industry response to the filing surprised and even awed Oliver.
“We'd just had a bunch of launches and approvals, but the interest for [the digital medicine] was 10 times what we usually see. While we had a setback with the CRL, the anticipation is undiminished,” he notes.
There are other pharma players who have similarly pushed back against the industry's usual wait-and-see philosophy in regard to all things new and somewhat scary.
Tomotaro Nagakawa, lead partner in Deloitte Japan's life sciences practice, points to Astellas, which established DigiTx Partners in July, a digital health investment company alongside life sciences VC firm MPM Capital, and Takeda, which launched iBData in September, a digital program designed to improve diagnostics, measurement, and treatment of inflammatory bowel disease, as particularly prescient and forward-minded.
Then there's Daiichi Sankyo, which started working with Partners HealthCare on a mobile adherence tool for atrial fibrillation patients way back in 2014.
Notice a trend? Otsuka, Astellas, Takeda, and Daiichi Sankyo share a degree of adventurousness and forward-mindedness in the digital realm, but they similarly share a country of origin. Is there something that Japanese-based pharma companies get about health-tech that ones based elsewhere don't? If so, what are the lessons the have-nots might learn from the digital successes of these organizations?
AN INNOVATION GAP?
You won't get too many execs at U.S. or European companies to go on the record about a possible health-tech innovation or attitude gap. But if those execs don't believe such a gap exists, their off-the-cuff comments suggest otherwise.
They speak enviously about some of the business philosophies, such as the willingness to tackle problems in an offbeat manner and the celebration of diverse thinking, that Japanese pharma companies embrace more openly than their counterparts. They compare such approaches favorably to their own, almost resigned that infighting and overthinking will continue to hobble them as they attempt to keep pace with the industry's historic transformation.
See also: What 10 innovation teams look like
Some of their comments ring hollow — one imagines that legal and regulatory teams at Japanese companies aren't exactly waving through every proposed health-tech initiative with a grin and a thumbs-up — but the point remains: Many execs believe they can, and should, model their digital modus operandi on what they've seen from companies Otsuka, Astellas, Takeda, and Daiichi Sankyo.
Tellingly, leaders at these companies don't hold themselves up as health-tech visionaries. Rather, they view pushing the digital envelope as merely another component of their overarching mission to better support patients, which companies say ranks among their biggest catalysts for change.
“When Takeda started on its digital journey, we realized we had pockets of experience and pockets of innocence,” recalls Bruno Villetelle, the company's chief digital officer. “Every organization is facing challenges. When you're going into uncharted territory, as digital and digital health still is, it's about a commitment to experimentation.”
Bruno Villetelle is Takeda's chief digital officer.
Many also admit they can't tackle the digital era alone. Mark Reisenauer, Astellas SVP of oncology, believes his company is structured in a way that facilitates digital innovation and is philosophically aligned around the idea that fostering this innovation is a must-do. Still, he says Astellas Oncology's finest recent moment occurred when it threw its weight behind the C3 Prize competition, designed to address gaps in the nontreatment aspects of cancer care — adherence, care-coordination, and more.
“I've been in oncology for 22 years, so I thought I had a good perspective on what patients were facing. But when I had to live with it through my father, who had neck cancer, it became obvious how much we don't know about the patient experience,” Reisenauer explains. “One thing we learned was the importance and power of sourcing innovation externally from people close to the problem. You learn things you would never have thought of in 50 years.”
4 LESSONS FOR WESTERN PHARMA
That is the first lesson digital-health wannabes might learn from their Japanese peers: Those who go it alone will find it harder to gain traction than those who embrace nontraditional partnerships, whether with entrepreneurs, VC players, or anyone else with a half-baked idea. Of course, the problem is medicine manufacturers haven't played well with others over the years, in part because there was no compelling reason for them to do so.
If the industry's continuing transformation doesn't prompt a swift reconsideration of such self-limiting attitudes, it's unlikely anything will. Dr. Joseph Kvedar, VP, connected health at Partners HealthCare, says the ability and willingness to collaborate varies wildly from pharma company to pharma company.
“One of the big differentiators is how much of a vision the company has for the role of digital tools going forward, versus as an extension of already existing marketing,” he explains. “That's one of the things Daiichi Sankyo got from the outset. They didn't act the way you might expect when big pharma corporations are involved, which is, ‘Well, what about the milestone? Stick to the plan.'”
Which isn't to say these partnerships should assume the form of a casual date. “Let's figure it out as we go along” agendas have even less place in health-tech than they did in the bygone multiple high silos era.
“It is often the case that a pharma company is having discussions with potential partners without a clear image of their to-be state and-or services they would like to provide by using digital health technologies,” Deloitte's Nagakawa notes.
Disband the digital team.
At Daiichi Sankyo, Takeda, Astellas, and Otsuka, there's no such thing as a digital team. Otsuka, in fact, has spun off Otsuka Digital Health as a joint venture with IBM Japan.
And while the inner structural workings of most pharma companies are sufficiently opaque as to prevent overarching statements about the prevalence of such units, it's fair to say many non-Japanese-based entities haven't eliminated them.
The problem seems to have something to do with internal politics. Rather than impressing the need to change with the times upon long-established groups and divisions, many companies have taken the easy way out: They've assembled distinct digital teams, feisty bands of upstarts charged with imposing their digital will. In doing so, they've essentially made digital transformation an optional activity.
Oliver, for one, doubts “digital DNA” can readily be embedded into a company's genetic sequence.
“[Digital and health-tech] are things that were traditionally outside our core, but now they're as essential as anything in our core,” he explains. “It takes intentionality. It takes intense focus. You can't just say to a few people, ‘OK, go tell everybody to do this.'”
Villetelle agrees. “Digital and digital health doesn't work if it's led by a remnant of digital natives. You need to bring everyone on the journey, which maybe isn't so common in this industry.”
In his time at Partners HealthCare, Kvedar has worked with companies at the beginning of their digital transformation and ones well into their metamorphosis. What separates the successful from the less successful, he believes, is a depth of vision. For the collaboration with Daiichi Sankyo, Kvedar and his team were brought in early, which allowed the brands to align philosophically and mechanically.
“I don't know that this is exclusive to companies such as Daiichi Sankyo, but the ideal situation in pharma is doing digital as much more than a late add-on,” Kvedar explains. “You want the company to come in thinking, ‘We have a molecule and want to build some kind of digital wraparound or something that adds value to it.' It's when you start planning midway through that you get in trouble.”
Early digital planning for and around new drugs and other pharma initiatives should also help the industry evolve toward what might come next.
“We think that someday pharma companies will be in the software business, either in addition to the molecule business or in place of it,” Kvedar continues. “Digital tools can have remarkable therapeutic effects on their own.”
Pick your spots.
Villetelle believes Takeda's successes in the digital realm have everything to do with an approach that is as relentless as it is selective. For example, Takeda in mid-November was running 40 health-tech experiments across geographies, brands, and therapeutic areas. Some are destined to “fail fast,” as Villetelle puts it, while others could morph into something entirely different than first envisioned.
Ultimately, though, it's not just about the success of a given project. An important side benefit comes in the form of encouraging people at all levels of the organization to prioritize digital thinking and empowering them to translate those thoughts into action.
“Small, lean teams exploring new areas — that's what commitment to experimentation looks like,” he adds. “I don't believe there's such a thing as ‘digital culture' or ‘digital mindset.' You learn by doing.”
Takeda's iBData program satisfies just about every criteria health-tech leaders at the Japanese companies recommend. It was developed in partnership with two important allies, Vanderbilt University Medical Center and Texas Digestive Disease Consultants. Its development coincided with Takeda's growth within the IBD category. It developed organically, rather than under the thumb of a digital leader or squadron. And it lends itself easily to an elevator pitch: patients can track their symptoms and lifestyle factors using wearable watch technology.
Villetelle has high hopes for this and other digital experiments, whether efforts to show the mode of action for Takeda products using virtual reality or a program alongside WeChat in China to bolster patient education about chronic disease. He believes the company's work will foster a sense of adventure.
“I was listening to entrepreneur Elon Musk give an interview recently and he said something that stuck with me,” Villetelle says. “It was something along the lines of, ‘Life needs to be about more than solving problems every day.' We need to be excited about the future. [Digital health] gets us to that place.”
Oliver, on the other hand, recalls a business-magazine article from years ago that likened the pharma industry to the steel industry.
“That's very sobering. That's not the comparison we want,” he recalls. “The point was the last real shakeup in pharma was when the FDA was formed, 130 years ago, and now there's very real disruption. You can go two ways when that happens: disrupt yourself or be disrupted by external forces. Having the courage to disrupt themselves is what's going to make or break a lot of companies in the next decade.”