Roche (Genentech) of South San Francisco recently announced its restructuring strategy away from a traditional national strategy and toward an organizational model centered on “local health care ecosystems.” The Basel Switzerland-based biopharmaceutical company must embrace “new customer engagement” models that helps the company keep up with morphing markets. Unfortunately, part of this transition necessitates the cutting of 470 primarily sales positions based at its South San Francisco, CA (Genentech) campus, according to a recent WARN filing, reports the San Francisco Business Journal. The company sees “Digital” as an absolute foundational trend impacting the business. Exactly what is digital for Roche? Why will it benefit patients (and shareholders) and How on earth can a big pharma transform itself to become a hub in a dynamic, patient-centric digital network?
Some Key Points
The layoffs were not associated with anything to do with COVID-19, reported spokesperson Heather Gloe to the San Francisco Chronicle. Nor were the layoffs associated with any failed trials or other factors other than the need to transform the business to keep up with the market. While Roche has spent lots of money buying companies that support its vision to transform itself to an active agent in the emerging patient-centric, digitally transformed health care world.
Where is Roche Headed?
The traditional model of pharmaceutical production and distribution will morph from the image still in many people’s mind today, at least on the front-end of the business at the doctor’s office as that of the pharma detailer making the rounds at various health providers offices, providing samples and literature while engaging in the latest data about that drug. Changing market conditions, technologies and rapidly unfolding scientific discovery, patient preferences and more pull Roche (and every other pharma) toward a new patient-centric, digital-powered distribution and engagement model. There are many challenges with the inherent assumptions that the pharma companies have in this emerging new world that we cannot delve into here.
Consumer Hub in Digital Network
According to a recent presentation titled “Digital technology and advanced analytics in Roche,” the company is fully embracing the “digital” trends impacting the Swiss giant’s business. For example, they anticipates greater “consumerized healthcare” which translates to the need for digital solutions in healthcare delivery coupled with direct digital channel engagement with key healthcare ecosystem stakeholders or as they put it “new customer engagement models.” Roche sees a world where its digital platforms will support the ongoing measurement and management of patient outcomes. Increasingly, all of those stakeholders will be bond together in a seamless digital network where patient data is continuously collected and acted upon.
Patients at the Center
Moreover, Roche envisions a world where patients are taking direct control and management of healthcare. A plethora of new digital services, delivered via apps, wearables, sensors and more will literally empower patients to directly make decisions to improve their healthcare.
Embracing a Transforming Ecosystem
At the same time, Roche understands powerful new stakeholders have moved aggressively into the health ecosystem. Participants such as Google, Amazon and Microsoft bring not only high-powered cloud computing but a plethora of platform, data collection and digital service ecosystems. By embracing at least some of these as part of comprehensive digital strategy, Roche seeks to contribute to the reduction in inefficiencies in the healthcare system.
The Next Chapter?
Where does Roche take all of this? Well, their mandate: they must produce higher quality products at lower costs while delivering at full velocity, faster than before. How can they accomplish this? Again, back to the Digital transformation assuming that Roche successfully reorganizes itself completely, around the patient and its ecosystem and associated data, assuming various systems and processes have been transformed for this new reality than Roche would be in the enviable position to leverage powerful Artificial Intelligence (AI) and robotics technologies for example to drive transformation of internal processes to continuously react to and fulfill the requirements of this new reality.
How do they get there?
Roche has a lot of work ahead to achieve the vision outlined above. And importantly this requires leadership, relentless execution and lots of money. Roche is one pharma with wherewithal: according to one report Roche is now spending over $3.3 billion on digital per year. Anchored on major digital acquisitions including Foundation Medicine (molecular insights business) and Flatiron (accelerate cancer research and improving patient care), the company reports 300 ongoing initiatives associated with “Digital” with at least 50 partnerships that purportedly support the big pharma company’s strategy.
Even before COVID-19, Roche was transitioning to IT/IS environments that support flexibility, agility and cross-functional collaboration across the company’s value chain: for both internal employees as well as external business partners in a bid to create a digital culture across the organization.
What about Clinical Trials?
As the TrialSite is profoundly interested in research what is Roche’s latest thinking on leveraging of digital to transform drug development and in the process offer tools to support and hence patient and investigator experience.
Most clinical trials struggle to recruit and retain sufficient numbers of patients. Roche’s digital strategy presupposes a number of investments and strategies that help pinpoint prospective patient targets meaning that by the time Roche’s study gears up sufficient numbers of potential subjects are already engaging with the company via its various digital channel, or at least more efficiently targeted for outreach by either the company’s clinical operations, or its CROs or sites.
Patients and investigators and staff have access to portals and smartphone apps while the company (or its business partners such as CROs) leverage a plethora of data sources to drive the patient recruitment process. One that the TrialSite adds, must become far more efficient than it is today.
Moreover, Roche invests in “investigator engagement” tools, leveraging study and investigator portals, engagement platforms including various apps designed specifically for the busy investigator and their staff. The company must seek to make it far easier for clinical research sites to work on its studies. Otherwise, the research sites flock to pharma companies that in fact do care about investigator experience.
The company will capitalize on accumulating data to embrace novel measurement and endpoints from digital biomarkers using sensors, wearables and mobile as well as capitalizing on AI and deep learning models and advancing algorithms for endpoint measurement and prediction.
The move to a patient-centric, data-driven digital world is of course not representative of a nice clear straight path but rather is represented as an unfolding, dynamic journey, involving twists, turns, and countless course adjustments as, in some cases, companies move into unchartered territory. Undoubtedly, big pharma companies such as Roche will have to make more cuts of some roles while they hire and build other departments and functions to transform their companies to optimally perform in this unfolding new reality. The implications for employees are significant. Many of the functional roles in a biopharmaceutical company will undoubtedly morph and transform over time.
Call to Action: Layoffs are never good or easy, especially in the current times. Resources such as sales personnel for a company such as Roche/Genentech could be very valuable additions to other biotech firms entering the commercialization phase.