Biovision: Industry Vision Of Disruptive Innovation Focuses On Production

LYON, France – The opening plenary session of an annual industry forum on life sciences, focusing this year on immunotherapy and ageing, highlighted disruptive innovation as a way to address growing public health challenges. The concept, however, seems open to interpretation.

The ninth edition of Biovision took place in Lyon from 5-6 June. The forum presents itself as fostering a dialogue on life sciences discoveries and their impact on society, “and to translate innovative ideas into actionable solutions for the benefit of citizens.”

Years after the notion of disruptive innovation was introduced, interpretations of it seem to vary, based on the panel’s presentations last week.

Disruptive innovation was first coined by Harvard Business School Prof. Clayton Christensen, according to Prof. James Barlow, chair of technology and innovation management at Imperial College London. In Christensen’s key concepts, disruptive innovation “describes a process by which a product or service takes root initially in simple applications at the bottom of a market and then relentlessly moves up market, eventually displacing established competitors.”

It departs from the usual innovation models in which, according to Christensen, companies, pushed by competition, tend to innovate to produce products or services that are too sophisticated and too expensive for many customers in the market. These companies then charge the highest prices to their most demanding and sophisticated customers at the top of the market, he explains in his concepts.

“An innovation that is disruptive allows a whole new population of consumers at the bottom of a market access to a product or service that was historically only accessible to consumers with a lot of money or a lot of skill,” according to Christensen.

Pharma, European Union on Disruptive Innovation

According to Christopher Viehbacher, CEO of Sanofi and president of the European Federation of Pharmaceutical Industries and Associations (EFPIA), innovation is fundamental to discovering new drugs, but also to remaining competitive. Only through innovation will Europe be able to compete, he said, insisting on the need to invest in education, universities and research.

Innovation is not always successful, he said, adding that out of 400 new drugs approved over the last decade, only 20 percent of them recovered their research and development (R&D) costs.

“Disruptive innovation by its very definition means a break with what we know,” said Viehbacher. A multidisciplinary approach is needed, as well as open innovation, with researchers who are embedded in the research ecosystem and conducting research that translates into a benefit for patients.

Robert-Jan Smits, director general, DG Research & Innovation at the European Commission, said investing in innovation should be used as a means to get out of the economic crisis.

“There is a clear signal from Brussels,” he said. “Invest in innovation.”

Smits underlined the importance of public-private partnerships (PPPs), and mentioned the Innovative Medicines Initiative (IMI) as an example. According to the IMI website, the initiative aims at speeding up the development of better and safer medicines for patients.

He also mentioned the establishment of the European unitary patent, which he said will reduce the patent filing costs by 80 percent.

Michel Goldman, executive director of the IMI, said during the opening plenary meeting that the key word is ‘collaboration’, not only to overcome medical challenges, but to create a new environment that can streamline all the different steps from discovery to delivery of innovative drugs to patients.

“It is very much about sharing,” he said, not only knowledge and expertise, but also data. Data sharing is critical, he said, for learning from successes and failures. Data of failed trials are arduous to gather, he said, calling for the development of common standards to be used by investigators.

Goldman also said regulators should be involved earlier and better in drug development, patients’ voices should be central, and incentives should be provided for all stakeholders, including reinvesting in difficult areas such as antimicrobial resistance.

Paul Stoffels, chairman of Jansen Pharmaceutical Companies of Johnson & Johsnon, said accessing the best science in the world is key in the innovative process, pre-competition collaboration necessary, and ways to secure more return on investment in the pharmaceutical sector is essential.

For Patrick Errard, president of Les Entreprises du Médicaments (Leem), a French pharmaceutical industry group, several factors are important for disruptive innovation. One of the conditions, he said, is to create the economic conditions of stability for investors. Another one is to facilitate a swift market access for new drugs.

Panellists Depart from Key Concept, Academic Says

Barlow did not quite agree with the vision the panellists gave of disruptive innovation. Technological innovation is a double-edged sword, he said. On the one hand, it is good and “we all want it, we need it.” But it also represents a problem for governments and taxpayers because it drives up costs, he said. Innovation, though needed, is not easy to manage in an economy, he added.

The original definition of disruptive innovation is not merely a break from the past, he underlined. “It is about moving away from very high cost, high technology, possibly over-specified models of services towards simpler, cheaper and good enough medical products for people,” he said.

The real question, he said, is where the pharmaceutical industry sits within this emerging disruptive innovation model. Possible tools have been described by panellists, he said, such as reducing the cost of the development process through open innovation and collaborative relationship, and the pharmaceutical industry funding and supporting small biotech companies.

However, the more difficult question, he said, is “how do pharmaceutical companies reinvent themselves not just as providers of ever more beneficial and expensive pills, but as part as that healthcare system value chain?”

Intellectual Property in Disruptive Innovation

To a question about how intellectual property sits in the disruptive innovation landscape, Goldman said there was a lot of scepticism about the IMI because of intellectual property issues, but that the IP framework developed with the EU Commission allows open innovation to work.

Everybody can be rewarded according to their contribution,he said. The framework facilitates dissemination of knowledge but can also be adapted according to the types of projects that we have, he said. The key principles of the framework is that everyone is protected, he added.

Viehbacher said that while developing drugs, companies experience a cash-flow negative situation. “The patent starts when you have a molecule,” he said, not when the drug is actually being marketed. There is a long period when capital is being spent and a positive period after the drug is launched when that investment may be recovered.

However, with the rapid turnover of innovations, the depth of that negative area has increased in the last decades and “we have a shorter period of time to recover the investment,” he said. “At some point we have to reconcile patent lengths with the increasing amount of time used to develop a drug, because the clock starts as soon as you start developing it.”