Author: Michael Dalgleish

Pharmaceutical companies are increasingly engaging in or competing with the mHealth sector (mobile health), but an interesting dichotomy is developing.

Pharmaceutical firms, by their nature, are meticulous and consequently classically slow to make decisions, develop new products and adopt novel approaches. On the contrary, digital technology businesses are more often fast, dynamic and agile both in their development process, responding to market needs and new technical capabilities.

When pharmaceutical companies only had to worry about competing with other businesses on a similar scale, and with similar process restrictions, there was a level playing field. Increasingly however, threats come not from innovative drug candidates, or better marketing, but from disruptive technologies.

With the typical development time for a new drug being 12 years and costing over £1 billion — it is easy to see why pharmaceutical companies take their time to make slow, carefully considered decisions and conduct extensive market research before engaging on new projects.

However, contrast that with typical Silicon Valley start-ups, who might launch a Minimum Viable Product (MVP) inside 12 months having invested under a million dollars and see their company grow into a multibillion-dollar business in the same timescale it takes to develop and launch a drug candidate.

Pharmaceutical companies might, therefore, turn their attention towards mHealth thinking that there is a route to accelerated growth. Indeed, on paper, they would seem to be at a huge advantage over the typical tech start-up. However, to realise that potential they’ll need to think much more like a start-up.

The start-up world often talks about an MVP — the minimum set of features necessary to engage users and start understanding which other features will be helpful. It’s an approach largely alien to the drug development world. It’s also an approach, which if applied incorrectly, has the potential for harm — if not to patients then to corporate reputations.

Johnathan Friedman, a partner at LionBird Ventures, coins the term2Minimum Viable Claims (MVC) to better describe what a digital health product should be aiming to do in the early stages.

With a carefully designed development programme, led by people who not only really understand the regulatory landscape but also the commercial realities it’s quite possible to incrementally improve the MVC product learning from user feedback to deliver features which help attract and retain users, or even that deliver whole new product claims.

Once a company gets into the habit of thinking in highly regimented ways it can be particularly difficult to break down the cultural barriers that make high impact, accelerated growth possible.

When the event horizon for pharmaceutical companies is measured in years, and the start-up is working in months or even weeks, it quickly becomes clear why pharma may be at a massive disadvantage unless it can learn to control its corporate structures.

One approach that can prove successful is to put the innovation in a separate entity with much greater agility and flexibility, but it must have a shared understanding, vision and control or disaster looms.

Alternatively, simple acquisition of start-ups beginning to look promising in a particular space is another approach — however once integrated into the new parent there is a risk that their previous agility is strangled out of them.

An effective strategy might be for the leaders of pharmaceutical companies to take the time to understand how the emerging digital health world differs from their own and understand how to bring in some of the key benefits — including radically changing the thinking on product launch timelines.

Even planning mHealth products within a two to three-year timeframe means companies will be building platforms on outdated technology and probably numerous product versions behind their agile, lean, start-up competition.