CHAPTER 3

STAYING AHEAD OF THE CURVE

Proactive business model redesign in an evolving healthcare ecosystem

IN THIS CHAPTER

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BUILDING RESILIENCE THROUGH INNOVATION

INTERVIEW WITH DAVID DRODGE - DIGITAL TRANSFORMATION LEAD, ROCHE

INTEGRATING TECHNOLOGY ACROSS THE VALUE-CHAIN

INTERVIEW WITH DEBORA FANG - STRATEGIC ADVISOR, F&F ADVISORY

PERSONALISATION: FOCUSING ON INDIVIDUAL PATIENT NEEDS

INTERVIEW WITH STUART COCKERILL - HEAD OF LIFE-CYCLE MANAGEMENT FOR MYOPIA MANAGEMENT AND SPECIALITY LENSES, COOPERVISION

INTERVIEW WITH DOMENICO VELLUCCI - HEAD OF SUPPLY CHAIN, NORTHERN EUROPE, HALEON

Staying ahead of the curve

The healthcare ecosystem finds itself at a pivotal juncture. The extended periods of crisis mitigation during and after the pandemic have ignited a collective drive for change. This prompted a system-wide reconsideration, looking at how best to harness the unique strengths of the life sciences and consumer healthcare sectors to meet current and future healthcare needs.

Staying ahead of the curve

As we delve deeper into the transformation processes, two strategic areas stand out as central to the journey. The first one is digital and data - with consensus among leaders about technology being an integral part of a future-ready health ecosystem. The second key area is personalisation.

While this trend is driven primarily by the life sciences industry developing increasingly wider offerings of tailored products, there are a range of different initiatives across the public and private sector aimed at making healthcare truly patient-centric.

In this chapter, we use the lens of digital and personalisation to explore the strategies companies are adopting to stay ahead, leveraging innovation to reshape the contours of what healthcare means.

Digital and data:
how to use tech to remain in the game

While it’s not new that digital and data are central to companies’ transformation strategies across sectors, the last two years have seen a further spike in digital being prioritised as an area of investment. Our survey findings show that there are three key strategic priorities that life sciences and consumer health firms are currently investing in.

It's clear that in any period of significant transformation, workforce management will be vital for public and private sector organisations alike. As the healthcare ecosystem evolves in the age of digitisation, the workforce not only needs to be allocated differently, but there is also a need for training and upskilling that workforce and ensuring that the right change management processes are in place to support this transformation.

While our research demonstrates a commitment from leaders that technology is a key part of the evolving healthcare ecosystem, this does not mean it has been easy to implement successfully across an entire value chain.

As highlighted in our research, one significant hurdle around digital transformation involves effectively managing vast amounts of data generated by digital initiatives, but in a way that meaningfully impacts the organisation’s strategic decision-making.

While most companies have now taken the first step of gathering data, building out the expertise to extract the insights most valuable to the organisation is a process many are currently undergoing. Another critical challenge is demonstrating the relevance of digital initiatives to employees and ensuring company-wide buy-in.

Clear communication of the purpose and benefits of digital integration to specific business functions is key, ensuring engagement and promoting a culture that embraces all of the opportunities that digitisation offers.

What strategic projects are you currently investing in?

Digital and data technology investment
Sustainability
Workforce management

“Betting everything on the strategy without constant course correcting doesn’t work.”

David Drodge
Digital Transformation Lead,
Roche

Drawing on 25 years’ experience working in digital across various industries, Dave Drodge has been driving Roche’s digital transformation strategy and delivery in different roles in legal, sustainability and marketing. In this conversation, he shares his insights on what companies tend to get wrong when implementing digital transformation at a global level - and how to get it right.

A considered approach is critical
Today, digital transformation is a priority for pharma businesses large and small - but how effective companies are at implementing it is another question. Drodge believes that amid the noise around digital transformation, corporate leaders often struggle to turn enthusiasm into a clear, strategic plan. “Across the board, we see a dedication to make things happen and a willingness to put resources behind it, but there is still an enormous challenge around creating a system at a global level and course correcting at all levels of the organisation to make it work.”

David Drodge
Digital Transformation Lead,
Roche

“Within a large, multi-national organisation like Roche, different groups may come up with ten different solutions to the same issue.” Drodge believes that while a purely top-down approach is not the answer, the duplication of processes risks digital transformation creating more problems than it solves. “Betting everything on the strategy without constant course correction doesn’t work. Digital transformation often looks like a decentralised rush - when it should be about strategic, radical simplifications and course correcting at pivotal moments.” Drodge points out that many of the ‘new’ solutions leaders are seeking to implement already exist within the organisation. “COVID has taught us the power of leveraging our internal network within Roche. With lockdowns across the world putting increased pressure on digital engagement functions, sometimes we just had to put up the bat-signal (from Batman) and managed to connect with people in a completely different region and division who actually knew how to solve the problem we were facing.”

Drodge believes that digital transformation must be done in a considered way that begins with a stock-take of all existing infrastructure and capabilities across the organisation, allowing for making adjustments locally to fit the local environment.

Democratising data and analytics
Reflecting on the drawbacks of an all-or-nothing approach, Drodge challenges the idea that digital transformation must make every single employee within an organisation a digital expert. “I have often seen companies trying to make people into technology experts across digital domains.” He notes that this can lead to a reluctance among employees to embrace digital transformation. “When people don’t see the relevance of what leaders are trying to introduce to their specific role, there will be a lot of pushback. What employees do need is digital awareness, asking the right questions and reaching out for digital experts where needed.”

David Drodge
Digital Transformation Lead,
Roche

Drodge says that the best way to get buy-in is through showing people tangible examples of how they can benefit from data-driven decision-making. “On the one hand, it’s about giving them access to tools and resources that will actually simplify some of the labour-intensive elements of their job, so they can focus on the more complex, high-value areas. On the other hand, it’s also about ensuring that good quality, reliable data is at the core of all business decisions.”

While Drodge believes that not everyone needs to be a digital expert, he notes that treating analytics as the property of a single function is one of the biggest mistakes companies can make. “Data and analytics are a common good that should be democratised across the organisation, and not locked away in silos.” In Drodge’s view, the key to successful digital transformation at a global scale lies in effective knowledge and capability management, rather than just giving people shiny new tools.

Digital transformation has gone from being something that keeps you ahead of the curve, to a business survival necessity. Our research shows that leaders see investment in technology as the area most likely to lead to a competitive advantage over the next five years.

Although there is an industry-wide drive to integrate more technology across the value chain, determining the right approach to do this is a complex process.

Making the right choice between partnership and acquisition requires a careful evaluation of the organisation’s goals, resources and long-term plan.

"We’re just about to start the shared transformation programme recognising the need for change, not just from a money point of view.”

Debora Fang
Strategic Advisor, F&F
Advisory

With over 25 years’ experience in the consumer goods industry, Debora Fang is an independent advisor supporting private equity firms that are looking to buy or sell businesses in the sector. In this conversation, she reflects on how trends in mergers and acquisitions have shifted in the past decades and the role of strategic acquisitions and divestments in helping companies stay competitive.

From scale-driven to strategic - the purpose of M&A
Discussing the role of mergers and acquisitions in how companies evolve, Fang says that there has been a major shift in the objectives that underpin M&A-related decisions. “When I started in M&A, when companies wanted to build capabilities in new geographies or segments, scale was a key driver in decision making" - she explains. "Over the last years, the focus in M&A is much more likely to be on filling strategic gaps in the portfolio, with growth as a key driver. As firms identify these gaps as part of their planning cycle, they often come to the realisation that shifting their portfolio internally will not be enough to fill them."

Debora Fang
Strategic Advisor, F&F
Advisory

Fang notes that in parallel with these more strategically driven acquisition decisions, portfolio reshaping efforts through divestment have also intensified in recent years. " Companies have been shedding their underperforming assets in order to improve or streamline their portfolio. In more challenging times, this pruning is strongly driven by investor pressure. Large corporates across industries continue to announce significant divestments of categories or brands that do not fit with their overall strategy.”

Fang believes that with the pace of change faster than we have ever seen before, companies seeking to remain competitive must be continuously analysing their portfolio with a critical eye. “Adaptability is crucial, and it depends on an ongoing assessment of whether they are in the right space, and if their current portfolio will be able to propel them forward to where they want to be in 5-10 years’ time.”

The role of M&A in the era of technology
Another area Fang highlights as a core capability that will lead to a competitive advantage for companies is technology. She notes that M&A tech and digital strategies. “The majority of attractive targets often have a strong technology component across its operations, from marketing and analytics to channel and supply chain, particularly if you are looking into positioning to younger cohorts.” However, technology must be seen as an enabler, rather than an end in itself. “A few years back, direct-to-consumer (DTC), which is very much technology-driven, was all the rage in acquisitions. Many companies had a channel gap, and they were keen to bring in-house that knowledge about how to go direct-to-consumer.” However, Fang points out that this emphasis on channel often meant that companies were neglecting other commercial aspects. “DTC capability is important, but it’s one of many aspects to be considered. Acquirers have learnt that success requires a strong overall proposition and - in most cases - an omnichannel approach.”

Beyond the importance from a portfolio perspective, Fang notes that digital transformation is another dimension of technology where companies often seek to build their capabilities either internally or through third-party partnerships. “There is no question about the fact that digital transformation can give firms enormous top-line and bottom-line advantages. Most companies are currently undergoing this, and the best companies know that to be able to evolve their business, digital transformation must be non-stop.”

Portfolio divestments

Beyond technology-based acquisitions, consumer and life sciences firms are looking to streamline their portfolios to demonstrate what they wish to be best known for within the market. Along with acquisitions, this has also seen significant divestment of parts of portfolios over the last couple of years - most notably with GSK/Haleon and Johnson & Johnson/Kenvue.

For consumer health as a sector, these proactive divestments are playing a key part in shaping what the future healthcare ecosystem may look like. Through the development of more health-tech applications and improved online health literacy enabling stronger selfcare and access to over-the-counter medication, it’s technological transformation that can facilitate this change - with proactive business redesign developing products that better meet the future needs of patients and customers alike.

Personalisation: focusing on individual patient needs

An important area of innovation in pharma and life sciences, that goes hand-in-hand with technology, is personalisation. In recent years, companies have been actively embracing technological advancements to expand their offerings and provide personalised products and services tailored to the unique needs of patients.

“New technologies are simplifying the development of personalised eyecare and enabling a wider offering of tailored products across the sector.”

Stuart Cockerill
Head of Life-Cycle Management for Myopia Management and Specialty Lenses,
CooperVision

Having worked in the eyecare sector for almost three decades, Stuart Cockerill leads CooperVision’s work to expand and reinvent the myopia management and specialty lens franchises globally. In this interview, he discusses how the company’s developing data and digital technology infrastructure brings greater efficiency and customisation to eyecare, and shares his vision about the future of the sector.

Specialty lenses - a data-led approach

As a common theme across the healthcare sector, patient-centricity and the personalisation of care have become paramount when companies develop their strategies, and this is not an exception in eyecare. Providers have expanded their speciality lenses, with over a billion different combinations of products available to customers.

Stuart Cockerill
Head of Life-Cycle Management for Myopia Management and Specialty Lenses,
CooperVision

Cockerill explains that the demand for greater personalised eyecare has led to a growing awareness around the importance of data collection. “We gather a lot of data which allows us to develop products for the future.” He explains that the data captured through the topographical scanning of the eye allows CooperVision to aid eyecare professionals in building the right lens for patients with unique needs.

Cockerill points out that analytics have been critical to CooperVision, as they help the company identify trends in the market and new areas for contact lenses to go into. “New technologies are simplifying the development of personalised eyecare and enabling a wider offering of tailored products across the sector.”

Working in partnership with eyecare specialists
Cockerill is an advocate for providing training and education for eyecare professionals to get various types of lenses, the trainings we offer can also help them in their business practice.” CooperVision have recently run their online ‘Virtual Perspectives’ conference, in 15 languages across Europe. “It’s a full day of workshops and roundtables on issues ranging - explains Cockerill. He adds that while customer awareness of contact lenses and their understanding of their own conditions have been increasing continually over the last 20 years, the eyecare professional is still seen as the trusted source of information and expertise.

“With eyecare services traditionally done in hospitals now increasingly being pushed back into the community practice, we have a responsibility to collaborate with eyecare practitioners, understand their challenges and keep them up-to-date on the most recent developments in the sector.”

Stuart Cockerill
Head of Life-Cycle Management for Myopia Management and Specialty Lenses,
CooperVision

Smart eyewear and electronic lenses - the future of eyecare?Discussing the potential in tech-enabled eyewear, Cockerill notes that while the first model of Google Glass raised concerns around privacy and failed in the consumer field, these technologies have been very successful in the business field. "A key example is warehouses that use pick-to-light systems, where these glasses have meant that there is no need to install lights everywhere. They are also increasingly being used by supermarkets to help online shopper pickers find the right item quickly”.

Cockerill believes that smart eyewear will eventually flow through into the consumer environment. “Many millions of dollars have been invested in the development of electronic contact lenses, but the technology is not quite there yet. Companies trying to develop these products for personal consumer use will have to address a number of challenges as they walk the fine line between healthcare and tech”.

Our research found that achieving true personalisation in healthcare requires patient support services and tools to be established through a genuine collaboration with patients and patient advocacy groups. Involving patients in the development of personalisation tools is critical in making sure they are aligned with real-world patient experiences and address actual unmet needs.

Actively engaging patients can offer valuable insights into the practical aspect of their care journeys, including medication adherence, self-management techniques and overall wellbeing. This collaborative approach helps identify gaps in existing support systems and enhance the relevance and effectiveness of the tools developed by life sciences companies.

In the pharma space, a recurring challenge is when the products and tools are there, but they are not accessible to patient populations. Particularly in the case of innovative therapies, organisations are redoubling their efforts to demonstrate the value of these products to regulatory authorities to promote wider access.

Achieving this requires a data-driven approach, with real-world evidence gathered through robust clinical trials, followed by an analysis of patient’s health outcomes and overall quality of life.
(capital, time and resource), meaning that regulatory decisions regarding the approval and reimbursement of these products are often delayed.

The focus on personalisation is not unique to the pharmaceutical sector. Companies in consumer health are actively working on developing digital or health tech-based solutions to provide more comprehensive product and services experiences. These solutions often complement existing products, based on a holistic approach to meet consumer needs.

“It is essential that we integrate artificial intelligence in a profound way into how we determine the future needs of our consumption supply.”

Domenico Vellucci
Head of Supply Chain,
Northern Europe, Haleon

With a broad spectrum of experience across sales and commercial areas, Dom Vellucci currently oversees Haleon’s Northern Europe supply chain, covering 11 markets including Nordics, France, the Benelux states, Ireland, and the UK. The focus of his role is to ensure The Quality and Supply Chain function partner the commercial organisation in driving our portfolio to consumers and customers to propel the business forward.

Building trust through secure supply

Since the demerger of GSK’s consumer healthcare business last year, Haleon has been establishing its purpose and strategy as a standalone company. Creating trust, Vellucci claims, is a fundamental objective as the firm starts evolving independently. “Our current strategic priorities are all about building credibility and trust with our new shareholders that we can deliver quarter by quarter" - he says.

Domenico Vellucci
Head of Supply Chain,
Northern Europe, Haleon

Reflecting on what building trust means from a supply chain perspective, Vellucci notes that in a fast-moving consumer environment, the supply chain function needs to ensure a stability of supply to match the commercial ambitions, be resilient and provide the right agility to maximise opportunities.

“In theory, the process is simple. We work extremely closely with the commercial organisation - on a short-range bottom up forecast typically 6 to 12 months using a mix of AI with market intelligence, further out 2-3 years we use a mix of category, market, strategic data to forecast. From this base volume, we have many processes in place to ensure our supply matches the demand needed and what/where to increase if needed.” However, Vellucci believes that with the supply chain function’s evolving data capabilities, they are growing to support the commercial team a variety of ways.

“Continuously tracking performance, promotions, and their impact on volume, competitor and category performance allows us to challenge the commercial team’s thinking, helping us to become more effective in predicting, evaluating and resolving anything that might affect our supply" - he says.

"There are strong digital transformation efforts across Haleon. For us in supply chain, it is essential that we integrate artificial intelligence in a profound way into how we determine the future needs of our consumption supply" - he adds.

Domenico Vellucci
Head of Supply Chain,
Northern Europe, Haleon

From standalone products to comprehensive solutions Discussing the evolving offerings of companies across the consumer health sector, Vellucci says that the growing interconnection of consumer health and technology is likely to transform how people manage and think about their health.

“The emerging areas of innovation in digital health are unlocking completely new areas for a company like Haleon to support people in taking care of their wellbeing" - he notes. Vellucci believes that consumer health firms must now think about creating not just products, but comprehensive solutions that address consumers’ health needs. “Take, for example, a consumer who buys a cream from Haleon because they have got muscle ache - we have got to think beyond the product itself and consider if we can help them holistically on pain" - he explains. "The purpose of our partnerships with tech is to make sure we can offer something to consumers from a digital perspective that can enhance what our products do.” For Vellucci, the future of the sector lies in shaping the portfolio so it offers an all-round health benefit to customers.

To truly add value for patients, it’s essential to consider the entire treatment experience comprehensively. While introducing innovative and personalised medicines is undoubtedly one component of this, companies must go further. They need to extend their focus beyond the development of medicines and delve into critical areas such as supply chains, support services and access. By examining these, companies can more effectively deliver authentic personalised medicines to transform the healthcare landscape.

The healthcare industry is currently experiencing a profound shift in focus towards technology and personalisation. The transformation required has prompted organisations to implement business model innovation. Our research highlights that companies are responding in three ways by:

rethinking their portfolios to focus on technology and personalisation;
prioritising strategic partnerships to increase agility and develop new capabilities; and
streamlining their portfolios to demonstrate what they wish to be best known for.

In today’s uncertain and rapidly evolving landscape, companies seeking to gain a competitive advantage must prioritise building resilience. As the healthcare industry continues to embrace technology and personalisation, those organisations that successfully navigate this transformation will not only thrive, but also profoundly shape the future of healthcare.