Pharma Futures: The Future of the Pharmaceutical Industry

by Joyce Tait, David Wield, Joanna Chataway and Ann Bruce

The Organisation for Economic Development (OECD) is launching a book ‘The Bioeconomy to 2030: designing a policy agenda’ which summarises the outputs from a major International Futures Programme. Innogen contributed a major scenario report on health-related biotechnology up to 2030 .

Innogen’s research over the past seven years has focused on the interactions between innovation and regulation in the pharmaceutical industry. Unlike most industry analysts we see regulation as the key determinant of the overall structure of the sector, of the nature and mix of firms participating, and also of the relative competitive advantage of countries and regions. Rather than being an immutable part of the background, if we want to get the maximum innovative benefit (public and commercial) from the huge investment in basic life science, regulation is the key variable capable of driving radical change in the sector.

The starting point for our scenarios was a world health care system that, from the perspective of potential impacts of biotechnology, is mainly under the influence of the innovation model of multinational drug companies (big pharma). The scope and inventiveness of this model has been constrained by expensive and lengthy regulatory systems that act as a barrier to entry for small companies that could challenge the industry status quo. Radical regulatory change (smarter regulatory systems for 21st century science and innovation) is seen as a necessary precursor to the emergence of a new, more radically innovative, health care sector.

To achieve these beneficial outcomes for the health bio-economy our scenario suggested that a big pharma company and a major ICT firm could form a joint company to deliver ‘Networked Health Care’ and described how this could emerge, given ‘smarter’ regulation. To succeed, the new company would need to harness a wide range of global networks, bringing together new technology, new types of expertise, surmounting regulatory barriers to innovation, and embracing new competition models.

In this scenario, the most powerful partners would no longer act as technology gate-keepers, inhibiting the development of innovations that did not contribute to a drug-based approach to health care.

Achieving radical change in major industry sectors or regulatory systems is sometimes described as “turning round an oil tanker”. However, even once you have turned the oil tanker round, it is still an oil tanker. The challenge in this case was equivalent to converting the oil tanker into a multifunctional mother ship in charge of a fleet of smaller faster vessels capable of taking off in many directions while remaining well connected with one another. And regulatory change is the essential first step in enabling this to happen.

See: Innogen Policy Brief “Pharmaceutical Futures Health Biotechnology to 2030”; also presentation by Joyce Tait to LSE Complexity Workshop