How megatrends are affecting the pharma

industry, and how the CI function can use

megatrends to increase its strategic relevance

Frederic De Meyer

Senior CI Investigator

I.S.I.S. – Integrated Strategic Information Services, Inc. – www.isisglobal.com

Office Switzerland: +41.41.455.2522

www.isisglobal.com

Aim of this presentation

Raising awareness of the multitude of trends affecting the pharma business, either directly or indirectly

Learn how to use these insights to increase the CI function to the highest strategic level within your company

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let’s start with a challenge:

what do these have in common?

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here’s a hint…

Ford almost got out of

business in the early

1900’s for sticking to it

standardized products

In 2002 Barbie lost its

market predominance

to a new competitor

who just entered this

market the year

before

Until 2006 Coca Cola

was boycotted

multiple times in India

due to its water

mismanagement

practices

GM’s Hummer saw

sales drop 85% from

2006 to 2009

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sometimes long-term shifts can

have short-term consequences!

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one hurricane is not a trend, it’s an event...

an increasing number of hurricanes in the US

is a trend, not necessarily a megatrend

before we start… what are megatrends

exactly?

a worldwide increase in number and intensity of

hurricanes would be a megatrend

and the consequences might trigger new

(mega)trends

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Outline

• …a brain teaser as a starter

• Long-term trends affecting the pharma industry in the coming decade • The most obvious ones…

• Trends currently forming, outcome uncertain

• Some speculation…

• How to use these insights to increase the strategic relevancy of the CI function in your company • Setting up a megatrend exercise within your company

• Using megatrends to assess your competitive positioning for the long run

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we currently track +40 megatrends closely

DEMOGRAPHIC

• aging population • increasing world population • genY/Milennials • urbanization/geographic mobility • multi-ethnic society • gap rich-poor

TECHNOLOGY

• ubiquitous computing • disintermediation • crowdsourcing • social Media • augmented Reality • SaaS, DIY • cloud Computing • 3D • enhanced humans

GEOPOLITICS

• power shift to East • globalization 3.0 • trade blocs and unions • rising middle class • the Market State

SUSTAINABILITY

• global warming • scarcity of resources • energy dependency • biodiversity • green technologies

BUSINESS TRENDS

• shared value (CSR) • social Entrepreneurship • social Business • open source/ innovation • decentralization • gamification • virtualization • disruptive business models

CONSUMER

• mass customization • radical transparency • social buying • sustainable/ethical buying

SOCIETY

• dematerialization (digitization) • talent shortage • boundary blurring • have’s and have not’s (digital divide)

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…but not all of them are relevant for pharma

Trends with an obvious impact

• aging population • climate change • global mobility • new migration patterns • urbanization

Early signs of times to come?

• informed patients • customization • open source pharma • DIY health • shared value • health ‘as a service’

Somewhat more speculative…

• market State • enhanced humans (GRIN, genetic engineering, bioprinting, …)

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…let’s start with the ones that we can clearly see, but from which the full extent is yet unknown

Trends with an obvious impact

• Aging population • Climate change • Global mobility • new migration patterns • urbanization

Somewhat more speculative…

• Market State • Enhanced humans

Early signs of times to come?

• informed patients • customization • open source pharma • DIY health • shared value • health ‘as a service’

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the patient has limitless ways to be as

knowledgeable as the doctor

Do you have a direct touch with the ultimate patient?

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(mass) Customization is the new paradigm

Is this potentially a new source of revenue?

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Open source pharma challenges the current

business R&D model

Should you embrace or fight this new model?

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Shared value and social entrepreneurship can

unleash new innovations

peripheral

Own initiative

Imposed by community

Core product

(Frederic De Meyer)

Comply (legislation,

standards, …)

Corporate foundations

Threat area

Social Entrepreneurs

Social Innovation

How to combine profitability with social responsibility?

Dynamics of changes vs social environment

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New market for DIY health

(9000 Apple apps for personal health care)

is the doctor still your ‘route to market’?

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The underlying transformation for Health Care

providers

reactive pro-active

community

institutions

(based on a chart from Across consultancy)

TRU

ST

ATTITUDE

How do you redefine your position in this new paradigm?

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…some speculative trends and their consequences for pharma

Trends with an obvious impact

• Aging population • Climate change • Global mobility • new migration patterns • urbanization

Early signs of times to come?

• Informed patients • Customization • Open source pharma • DIY health • Shared value • Health ‘as a service’

Somewhat more speculative…

• Market State • Enhanced humans

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The market state, an imperative or a delusion?

Will government become your key partner in the future?

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Human enhancement as an alternative to

medicine?

Who will be your key partners in the future (technology, insurers, …)?

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Are these trends applicable to Europe?

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Outline

• …a brain teaser as a starter

• Long-term trends affecting the pharma industry in the coming decade • The most obvious ones…

• Trends currently forming, outcome uncertain

• Some speculation…

• How to use these insights to increase the strategic relevancy of the CI function in your company • Setting up a megatrend exercise within your company

• Using megatrends to assess your competitive positioning for the long run

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Where tomorrow’s pharma innovation will

come from

• Aging population

• Global warming

• Urbanization

• New migration

• DIY Health

• Informed patients

• Open sourcing

• Shared value

• Customization

• Health ‘as a service’

• Market State

• Enhanced humans

• New ‘go-to-market’

• New markets

• New customers

• New partners

• New channels

• New ways of

influencing patients

• New vision/mission

• New organization

• New business model

• More efficient R&D

• More successful future

Do you take the lead or do you wait for disruptive models to emerge?

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how the CI function could use megatrends

assessment to increase its impact on

business strategy

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here’s a simple process to assess the impact of

megatrends on your company:

#2 discuss Megatrends

internally

#3 draw conclusions

and recommendations

#4 Communicate results

internally and externally

#1 identify

Megatrends to discuss

Mega trends

but the devil is in the detail…

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guidelines for selecting trends to assess in your company

Mega trends

• don’t select (exclusively) trends with

an obvious impact on your industry

or company… the most successful

ideas for innovation will come from

elsewhere;

• get your ideas and selection from a

combination of internal (survey) and

external (consultants) input;

• generate 50 ideas for megatrends,

select 20 to discuss.

guidelines for discussing trends in your company

• Invite people with different

background, functions and seniority

• follow a discussion template -for

instance Osterwalder’s business

model canvas:

• 5-6 persons per theme, 30-60 min. per

trend;

• also look at anti-trends;

• keep it fun !

guidelines for drawing conclusions from the trends

discussions

• segment the trends so as to show

which ones need action or close

monitoring

• map the way megatrends impact your

customer segments and stakeholders

guidelines for communicating the conclusions of the

megatrends exercise

• Set up different documents dependent

on target group and aim:

Outline

• …a brain teaser as a starter

• Long-term trends affecting the pharma industry in the coming decade • The most obvious ones…

• Trends currently forming, outcome uncertain

• Some speculation…

• How to use these insights to increase the strategic relevancy of the CI function in your company • Setting up a megatrend exercise within your company

• Using megatrends to assess your competitive positioning for the long run

www.isisglobal.com

How to assess your long-term competitiveness

and short-term actions needed

1. List of 25 metrics that

indicate long-term

competitiveness (industry

dependent)

2. Weigh the topic in terms

of importance/relevance to the industry

3. Do a neutral benchmark

(1-5 scores) based on public sources and info

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How to assess your long-term competitiveness

and short-term actions needed (cont.)

4. Draw conclusions, set recommendations

In this case:

1. Preparedness for geopolitical trends is currently your key

competitive differentiator. This needs to be kept!

2. Top performer overall has introduced key disruptive

business model and customer innovation. You

need to study which of these you can leverage profitably

for your business

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Demographics

Sustainability

Consumers

Geopolitics

New Business models

Strategy

Future readiness benchmark company <YOU>

YOU

Top overall

performer

Average of 6

companies

Overall conclusion

• Investigating long-term trends has short-term relevance: » Ideas for innovation

» Find competitive differentiators

» Refine strategy for future success

• There is an easy, structured way to get the maximum

value out of a megatrend exercise;

• By taking the lead of this exercise, the CI function would

elevate its relevance in the strategic direction of the

company.

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The future can not be predicted…

but it can be made ! (ancient African saying)

prepare your business now, and make sure CI has

the leading role in it!

Frederic De Meyer, Senior CI Investigator, I.S.I.S.- frederic@isisglobal.com Marc Limacher, Managing Director, I.S.I.S. – marc@isisglobal.com Europe (Switzerland): +41.41.455.2522 U.S.: +1.650.298.8555 www.isisglobal.com

Lucerne – San Francisco – Princeton (NJ) – Shanghai – Bangalore – Miami

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