While we might not be used to seeing the words “generic” and “innovative” in the same sentence, this oxymoron has now become crucial for the success of generic pharmaceutical companies. The forces of innovation have already reshuffled and disrupted a number of industries and will continue to do so. The important thing for companies to recognize is the need to ride the wave instead of fighting it, because every industry will be affected.
Generic companies should not be satisfied with just copying innovative products. To be competitive in this evolving industry, companies have to change their business models and re-innovate their product portfolios by adopting a patient-centric approach. Generic companies can build on the early success of innovative products but improve their offering with revised and refined features: in other words, offer “differentiated” products.
Some generic companies have already started doing so by developing “super generics” and new drug-delivery systems. But companies don’t need to adopt radical and costly changes to products: they can simply focus on reformulating products so that they modify the drug’s release rate. They can also attach user-friendly drug-delivery systems that are safer and more practical compared to the way existing original drugs are delivered. A good example of this is the development of pre-filled syringes. These value-added features will allow the drug to gain a price premium compared to conventional generics once marketing approval is received.
A key area that has been overlooked by many pharmaceutical companies is digital health technology, which can increase patient engagement and give pharmaceutical companies ideas on how to revamp their existing business model, especially when it comes to marketing their products. Patients and physicians are increasingly using smartphone devices and a broad array of apps to track and report data. Physicians are becoming less accessible to medical reps and are opting for more efficient “digital” approaches as opposed to the traditional detailing model.
Physicians are looking for ways to become part of a larger ecosystem that is seeing patients adopt devices such as Fitbits, wireless blood pressure monitors and apps such as Calorie Counters. All these devices facilitate decision-making for physicians and allow them to help a larger number of patients. If pharma companies with wide portfolios of products for certain diseases want to still be viable options for physicians as they consider the next medication for their patients, they must invest in and use digital health technologies.
If a company does not have the internal capabilities to re-innovate then another way to embrace innovation could be by partnering with or investing in companies, especially start-ups, that are working on systems, devices and apps that could enhance their product and service offering. Forging strategic partnerships with companies working on different technological platforms, either by emulating the venture capital model or by implementing this strategy as part of wider business development activities, is becoming increasingly important for companies that want to be competitive in the generic space.
It takes time to reap the benefits of these investments, particularly in the pharmaceutical space, where long R&D and regulatory timelines are the norm. But the investments will pay off – not just financially, but strategically as well.
The Annual Meeting of the New Champions 2015 is taking place in Dalian, China, from 9-11 September.
Author: Lana Ghanem, Corporate Strategy and Development Director, Hikma Pharmaceuticals
Image: Rosario Iannella, Qardio’s Chief Information Officer, models a Quardiocore heart monitor during Pepcom’s “Digital Experience”, a consumer electronics showcase, in Las Vegas, Nevada, January 6, 2014. REUTERS/Steve Marcus