How To Adopt A New Pharmaceutical Innovation Paradigm
Dan Balan, president of Fast Track, discusses the urgent need for pharma to address and revise the innovation paradigm. Balan outlines some of the steps leaders in the pharmaceutical industry need to begin taking in order to shorten the innovation cycle, including questioning the orthodoxy of a drug, and taking into account the growing competition from alternative and global treatment methods.
Interview Transcription:
Todd S: Live in Chicago, Life Science Connect Radio's day two coverage from this grand event continues. Todd, the morning session was stellar, amazing conversations, amazing organizations doing amazing things. However, I'm looking forward to this conversation. This should prove to be very enlightening.
Todd Y: We're going to get a little bit of a preview here, and our audience will, of one of the major events coming up on Wednesday.
Todd S: Yes, so let's get to it. Say hello to Dan Balan. He's the president of Fastraqq, a keynote speaker here at Pharma PACK EXPO. Welcome to the show, Dan.
Dan: Thank you, great to be here.
Todd S: It's great to have you. Thanks for joining us. Before we get into our conversation, Dan, do take a few quick seconds and inform us about you and your background.
Dan: I'm the head of a company called Fastraqq, in Chicago. We are a business transformation company. We help improve the supply chains of global companies, build better innovation portfolios, and help with growth and corporate strategies for companies.
My background is consulting, management consulting. I'm a former executive of a big 5 forum, and before that, I was with SAP, as a product manager in the supply chain realm. I was also a university professor, here in Chicago, before I started Fastraqq. We have helped a lot of companies from multiple industries, but I have deep roots in the pharmaceutical industry, as also in packaging.
I have done a lot of work in packaging and recently, the Packaging Digest magazine carried my front page article as the keynote article for the October issue. I have also been interviewed by the media outlets, and I've done more than nine articles for the global packaging industry.
Todd Y: Well, that's a good set of reasons of why we've invited Dan to be right here, and also why he was invited to be the keynote speaker on Wednesday morning. Give us a little preview. What are you going to be talking about?
Dan: I'm going to be talking about the next innovation paradigm in the pharmaceutical industry. When I say pharmaceutical, it is the medical industry, which includes devices, diagnostics, healthcare services, medical informatics, and all other allied constellational services, not just the drug making.
Why do we need a new paradigm? Because everything is shifting now. In the last five years, the world has changed so dramatically. Firstly, we're having a multi-generational workforce. People are living longer. Medical costs are rising, but the GDP is not rising just as quickly. That means that people don't have that much money to spend on healthcare and medical-related costs.
That means now it behooves on pharmaceutical companies to compete with alternative forms of healing, people going to other countries for treatment, for surgeries and so forth. Given this ever turbulent changing environment, what is the innovation paradigm that they have to adopt?
My speech is going to be why we need to tear down everything, from concept to customer, from product to cure, from [INAUDIBLE 00:03:21] to fitness, and what is it that we need to push as the next baseline for the innovation paradigm? That's what my talk's about.
Todd S: Dan, we've talked to about 30 organizations already at this show, and I would call each and every one of them innovative. They feel pretty good about it. They feel that they're making some good headway in advancing what they're offering the market.
How are they going to receive that message? Are they going to agree or are they going to say, “Whoa,I think we're already where we need to be.” I think the challenging is important and probably very necessary, but how is the market going to take that message?
Dan: The market has to readapt itself for two reasons. Number one, the innovation cycles are shrinking, which means the long, ten year innovation cycles have to be redefined, have to be reconsidered, and they have to shrink the discovery cycles, number one. Number two, with Facebook, Twitter, and other social media technologies now building a critical mass for clinical trials, it's a lot easier because of worldwide communication.
Thirdly, the lifespan of people have started to go up, which means we need more drugs for enhancement of health, rather than elimination of illness. There is a very subtle [INAUDIBLE 00:04:35] between the two. One is people need drugs to make them feel better, get better, at the least cost, not being shackled to a health situation which can be contained.
That means the very orthodoxy of the drug has to be questioned. Is the drug for containment? Is the drug for elimination of the symptoms? Is it for suppression of the condition or is it completely for [INAUDIBLE 00:04:58] of the entire illness itself?
That has to be rethought, right at the drawing board level, with pharmaceutical companies. Also, the global healthcare situation is constantly shifting. Countries like China, India, Brazil, and other populous nations are now trying to adapt to a better health infrastructure.
This gives a lot of opportunity for American companies to extend their tentacles worldwide, but also understand the risks and the dangers inherent in doing business worldwide. The innovation paradigm itself has to be redefined from multiple angles.
We're not urging companies to innovate. That is not new. The innovation is not proliferation. Proliferation is not innovation. Urging companies to innovate is not new, but urging companies to innovate thoughtfully, in a timely fashion, in a strategic manner, understanding all the market constraints and the social constraints and the cultural redefinitions of our society itself – that is changing, which is why innovation is now business. It's not about innovation.
Todd S: You spoke earlier, in the first of three or four points you just made, about the need to shorten the innovation cycle, and that's, frankly, I think, quite easy to accept. Okay, I get that. I understand why. How to do that is a whole different matter. How do I begin to approach an organization that I'm leading, let's say, and shorten that innovation cycle?
Dan: The innovation cycle – let's look at the steps. You're isolating the condition, validating the health condition, isolating the lead molecule, optimizing the lead molecule. Then you get into the chemical formulation of the drug, run through clinical trials, then apply for the new drug application to FDA.
They take their time, before they give their approval, before it's ready for mass launch. If you break down all the steps, the time it takes for the initial discovery is several years. How can that be shortened? Now, here's where, if you look at Google, Google is trying to extend and elasticize its search technologies, to finding out what the molecules are and how can those discovery steps be shortened?
In other words, it is using mathematics, search technologies, and a field called combinatory optimization. It is actually mathematics. It is a field of operations research for which Georgia Institute of Technology is very famous. But combinatory optimization is finding its new application in medical discoveries.
It's very much like paper folding. You take a flat sheet of paper, fold it in multiple configurations. It is called origami in Japan, but it's the same principle of how can you get to the final configuration with all the constraints in the molecular structure, in the proteins, amino acids that make up the proteins, and how do we get to optimizing the lead molecule, thereby getting ready for the formulation of the drug itself?
That process is being stretched into the mathematical realm to see if that process can be done faster. That's number one. Number two is now adapt to a drug design is a new concept that is coming into play. What do we mean by that? We're not discovering one drug, but a family of drugs.
We're moving from a core drug to a constellation drug. A simple example would be Alka-Seltzer. Alka-Seltzer takes care of your acid stomach, heartburn, headaches, body aches, fevers, and so forth.
It is treating a bunch of symptoms quickly. But what if we were to take the same principle, extend it, and make that the new paradigm for drug discovery? It is not one drug, but it's multiple drugs. It's a poly-drug that can treat a whole family of conditions. Shifting to that paradigm would change the medical industry.
Todd S: You touched on this, if you were paying attention to our conversation so far. You've partially answered this question, but I want to re-ask it and re-summarize it, for the benefit of the audience.
If someone listens to your keynote on Sunday morning, walks out of there convinced, “Yes, I need a new innovation paradigm,” and they go back to their organization and say, “We need to make some fundamental mind shifts here,” what are those first two or three steps they ought to take to position themselves to benefit from this new paradigm?
Dan: The first step is to informationally unite the company. That means, right from the very beginning, from concept to customer, through all the intermediate stages, how can innovation or the journey of a drug or the trajectory of a medication be tracked, and how can all the different departments, cross-functional departments, from R&D to sales to marketing to supply chain to customer service to corporate strategy – how can all of them have a common ground, a correlational literacy, a common body of knowledge?
That has to be dealt with, informationally, first. That's the first step. The second step is what I call job rotation. It is not enough just to be a molecular biologist or a cell entomologist or just a medical doctor. You have to understand the other aspects of the business. One of the big challenges in pharmaceutical companies is this: there's so much opacity, black space, and brick walls in a silo mentality.
That can only be smashed or solved culturally. That means, people in multiple departments have to rotate through other departments to understand their issues, challenges, constraints, problems, and what are they dealing with and how can some of those issues be dealt with cross-functionally?
The third issue is, simply, making creativity the next paradigm of the company. Medical companies live and die by creative new ideas, new paradigms, new ways of looking at old issues, and new ways of solving problems. How can we bring creativity and non-linear thinking within the company, and taking adaptive steps such as creativity training or training in stand-up comedy or something that promotes right brain thinking and right brain liberation?
Doing that as part of a corporate training program or culture will change the paradigm for a lot of companies. Many of the breakthrough medications have come because of people thinking out of the box. Straight line, linear thinking can no longer suffice. It has to be pushed by people who can bring outside perspectives.
For example, why not bring a juggler into an R&D department, who can juggle multiple disease or enact a skit about the disease? Why not bring some people doing stand-up comedy into an R&D department, and try to do a skit on different diseases and how people cured themselves and walked away?
That will get us out of our cognitive rigor mortis. It is not a disease, but a term. Doing all of these steps as part of the regular organizational culture will definitely shift any company.
Todd Y: Dan, one thing you haven't touched on yet – and I'm really interested in your perspective on – is the idea of more personalized pharmaceuticals. I have a different genetic code, different age, different lifestyle, been exposed to different things and environment than you have, or that Todd has. A given pharmaceutical is going to have a different impact on me than you or to Todd. How does that play into this whole change in the paradigm that we've been talking about?
Dan: In short, what you're asking, Todd, is designer drugs, like make your own omelet. If we were to stretch that concept, the discovery process, when I mentioned about family drugs and families of illnesses or afflictions, what I meant was what are some of the proximity conditions or propinquity conditions to the main illness that can be mapped as an orbit, and what are some of the possible permutations and combinations in which a certain disease or a dysfunction can occur?
What are the possible drug matches to those conditions? That way, it is much easier to segment, right at the formulation level, who are the people who will take all of these drugs? One size doesn't fit all, and one potency doesn't fit all. Form, dosage, delivery, absorption, dissemination, metabolism, and elimination vary from people to people, and you hit a right point.
Children may absorb the drug very differently than adults, or senior citizens. How can all those variations be contained? But those variations have the address right at the discovery level, and perhaps followed closely at the formulation level.
Todd S: A quick comment, before my next question. I'm thinking that the frequency with which you're going to have to deliver this message, of a changing innovation paradigm, is going to be more often, as the future progresses, right?
I think now, if you deliver this presentation on Wednesday, I think you're going to have to deliver a message in a few years quicker, because the pace of change is so dramatic, and technology is making such changes. As the market is learning, it's going to be interesting to see how often this innovation paradigm is going to have to happen. It'll be fun to see how that goes.
Speaking of the future, any thoughts, any insights on some packaging innovations we ought to be keeping an eye on?
Dan: Yes. Packaging is not about packaging anymore. It is business enablement. Packaging has morphed into a legitimate business function. Companies are challenged with producing costs, containing their supply chains, and trying to slash miscellaneous costs due to inventory theft, pilferage, brand protection, shortchanging of good at key transfer points and transaction points.
This is why they're looking at packaging as not packaging, but as enablement of the supply chain, number one. Number two, packaging is also having a greater role to play in the days to come, in the years to come, because of hyper segmentation. A given market is broken into ten different segments, and all of them need to be appealed to, or delighted by using packages.
One size doesn't fit all, and one dimension or configuration doesn't fit all. Packaging will have to adapt itself very quickly to changing marketing conditions. The next issue about packaging is that it has to directly address sustainability. Sustainability, five years ago, was a distant buzzword. Now it is a common word, a common theme in corporate circles.
That means material choices, supplier selection, how materials are going through manufacturing, how materials are arranged in the transportation realm, so the transportation costs are contained. All these are now coming back into packaging and packaging design. These issues will be addressed in packaging. They'll impact multiple cross-functions within a company.
Todd Y: You talked a little bit ago about the need to break down silos within a given organization, rotate people among different functions so that they see the problems and the issues. That same problem, or the same issue exists throughout the whole supply chain, from the very beginning sources all the way through to the end patient. How do I break down those silos, or what kinds of things can be done to break down those silos among the different organizations all along the supply chain?
Dan: A great question. Supply chain is simply the movement of goods and services from original supplier to the final consumer. It has a lot of intermediaries: Tier I supplier, Tier II supplier, or multiple tiers, multiple manufacturing plants, intermediaries, packaging guys, distribution warehouses.
Finally, it gets retailed out to an industrial organization. What is the common ground? To understand the flow of product, the challenges at every node, the challenges in manufacturing, transportation, and packaging, shortage of materials, risks throughout the supply chain, what can bring the chain down?
For example, a critical machine that does not operate perfectly and breaks down before the truck leaves the factory. They're all challenges. To break down the silos, what is required is a common body of knowledge, a clear understanding of issues, causes and effects, and a correlational literacy.
That means that a supply chain two day boot camp for all the executives, from VP of Operations to VP of Purchasing to the plant-level supervisors to customer service representatives, to the salespeople – that way, they understand the lifeblood of the company, which is the supply chain itself.
That has a way of connecting people and bringing to light all the issues, challenges, and problems. Once, two days, they go through this immersion program of understanding supply chains, it will save companies a lot of time, aggravation, and money in terms of firefighting all the time. This is the best way to break silos within the company.
Todd S: Alright, great stuff. Dan, I hate to say it, but we're running low on time. Let me assure you, Todd and I are going on strike Wednesday morning, so we can come over and check out your presentation. Let's remind the audience of when that is. It's Wednesday morning, at 9:00 a.m., in W190, that's West Hall 190.
Dan, before we let you go, how can people get in touch with you and learn more about all your important work at both Fastraqq and where can they follow up with you on this keynote?
Dan: They can follow up with me, Dan Balan at Fastraqq, but my email is Dbalan@Fastraqq.com. Our website is www.Fastraqq.com. Right after the keynote, I'm delivering a supply chain presentation, called Transforming the Supply Chain, for 90 minutes. I'm not sure which hall it's in, but Julie tells me it's somewhere close by.
It's 90 minutes of supply chain presentation in which I will discuss the challenges in the pharmaceutical supply chain, the primary, which is the drug manufacturers, the tertiary, which is all the wholesalers, packers, repackers, before it gets to all the pharmacies and other medical outlets.
This 90 minute presentation will give you a clear overview of the issues, challenges, and give you a framework for solving some key supply chain problems. You can get in touch with me there, Dbalan@Fastraqq.com. If you have any questions, please fire to me and I'll be delighted to answer your questions.
Todd S: Shoot, we make go on strike all of Wednesday.
Todd Y: Well, I think so, because we've got the cure for cognitive rigor mortis right here between us.
Todd S: Yes, we do. Dan Balan, president of Fastraqq and keynote speaker, here at Pharma EXPO, it was great to have you. Thanks for stopping by.
Dan: Thank you, both of you, Todd and Todd. It's a great pleasure being here, and I look forward to working with you. Thank you so much.
Todd Y: We appreciate your insights.
Todd S: The pleasure is ours. Alright, that wraps this segment. This has been Life Science Connect Radio, Todd and Todd, signing off from Chicago. Our live coverage will be right back.