Executive summary
In the rapidly evolving landscape of healthcare, interconnectedness among stakeholders is increasingly vital. Previously siloed approaches are giving way to fully integrated LIFEcare systems, combining wellcare and disease management. Technological advancements, demographic shifts, and patient expectations are driving profound changes, emphasizing the need for enhanced collaboration. Many pharmaceutical companies are forging partnerships across the value chain, aiming to optimize innovation and market access. However, challenges such as market fragmentation, differing goals, inadequate investment, and cultural differences often hinder partnership success. To overcome these hurdles, a focus on trust, investment, mutual goals, and ecosystem engagement – “TIME” – is crucial. Successful partnerships require a commitment to long-term collaboration, shared vision, and alignment of incentives. Multi-stakeholder partnerships, though complex, offer comprehensive solutions and better patient outcomes by incorporating diverse perspectives and prioritizing patient-centric approaches. Ultimately, partnerships that prioritize "TIME" will be essential to navigate the dynamic healthcare landscape and drive sustainable growth.
Healthcare ecosystems are changing and need to be increasingly connected to achieve more with less
It is a truism to say that we live in “an increasingly connected world”. Yet, in the not-so-distant past, healthcare was an extremely disconnected industry. Each ecosystem stakeholder played a small role, with patients themselves being the only common denominator linking the various actors (e.g., general practitioner, specialist, pharmacist, payer).
Today, healthcare ecosystems are evolving at an unprecedented pace towards a fully interconnected LIFEcare system that combines wellcare and disease care.
Healthcare ecosystems are undergoing profound transformations, propelled by technological advancements, demographic shifts, and evolving patient expectations. The traditional siloed approach, characterized by fragmented communication and disjointed care delivery, is increasingly recognized as inadequate and cost ineffective. Instead, a paradigm shift towards enhanced interconnectivity and stronger collaboration among stakeholders is urgently needed to optimize innovation, improve efficiency, and ensure patient-centric care.
A primary catalyst driving this imperative is the growing complexity of healthcare delivery in providing increasingly personalized medicine. Additionally, the digital revolution has ushered in unprecedented opportunities to enhance healthcare ecosystems. Electronic health records (EHRs), telemedicine platforms, and health information exchanges could facilitate a seamless flow of information between stakeholders, enabling real-time access to patient data.
However, these rapid ecosystem changes and disruptive medical innovations require a constant re-invention of PharmaCos and their respective business models.
"We believe that, in times where the return on investment (ROI) of pharmaceutical innovation has decreased and macro-economic cost pressure has increased, greater convergence is needed between and across players."
Seamless partner networks between stakeholders along the healthcare value chain will improve the necessary connectivity to share and advance insights, enhance the patient experience, demonstrate the economics of data-based treatments, and enable scientific innovation. This, ultimately, will result in accelerated patient outcomes.
Current collaborations already go beyond traditional research alliances
Pharmaceutical collaborations today already extend across the entire value chain, optimizing companies' core activities. From research and development to manufacturing, distribution, and marketing, partnerships facilitate synergies, innovation, and efficiency gains.
Collaborative efforts with e.g., academia, BioTechs, and contract development (research) manufacturing organizations (CD(R)MO) enhance pipeline development, while strategic alliances streamline processes. Collaborations with healthcare providers and payers support market access and commercialization strategies, ensuring that products meet patient needs and achieve favorable reimbursement. By leveraging collective expertise and resources, pharmaceutical companies strive to strengthen their competitive position and drive sustainable growth.
We anticipate that future partnerships will even extend beyond the current value chain. For example, some stakeholders will likely focus on social media, to engage and educate patients very early in or even before starting on their patient journey.
Despite the apparent advantages, partnerships often struggle to fulfil their initial expectations and core objective, and thus to sustain themselves over a longer time period. According to research1, 85% of pharma executives say that partnerships and alliances are essential to their current business, yet half reported failure rates of over 60%. So why are companies struggling to jointly work on solving relevant challenges?
Our research suggests four main factors:
- 1Market: Inherently, partnerships and collaborations are complicated. Complexity is multiplied in multi-stakeholder networks such as a highly fragmented healthcare system. Thus, by comparison, centralized markets like the NHS in the UK seem more feasible for partnering.
- 2Goals: Goals are often connected with culture, but simpler to align. Therefore, partners need clarity on the desired outcome of each party, making structuring agreements and KPIs paramount for success.
- 3Investment: The level of initial resource investment can be an immediate issue; however, the longer-term commitment of those resources, and over-reliance on external funding, are often more relevant factors for failure. Too many partnerships are financed with an unhealthy balance, only existing because one of the parties is footing the bill (e.g., PharmaCos). Partnerships and collaborations should aim for a sustainable business model even after the initial funding disappears.
- 4Culture: Cultural differences are often over-obvious and under-appreciated. Collaborations between private companies, governmental organizations, and research groups require careful consideration of different working styles. Speed, responsiveness, and the perceived level of priority can vary significantly between stakeholders. Often, partnerships fail because individual relationships break down, e.g., between champions and advocates.
Recommended reading
Bridging Pharma’s $200 million commercial gap
Robust contingency plans to capture full asset potential
Case examples
Please note that the presented case examples are based on public knowledge, and kindly refer to the respective footnotes for more information.
-
Otsuka and Proteus2
In 2018, Otsuka Pharmaceuticals and Proteus Digital Health forged a partnership to jointly develop a novel "digital pill" system using ingestible sensors. Otsuka injected $88 million3 in equity and other financial resources into Proteus to support a diverse portfolio of innovative digital medicines. However, the partnership concluded abruptly after just one year, with Proteus filing insolvency.
Initially, the two entities joined forces with the aim of fortifying their respective positions in the market. Otsuka sought to enhance its robust portfolio in psychiatry, neurology, and oncology, while concurrently expanding its footprint in medical diagnostics devices in these areas. Conversely, Proteus, a digital health startup renowned for its digital health solutions (e.g., ingestible sensors, wearable monitoring devices), required financial backing to scale its innovations.
Ultimately, the partnership faltered due to a lack of sustainable business models at the individual level, divergent goals (with Otsuka prioritizing digital capabilities and Proteus seeking funding), and inadequate patient adoption rates and supporting data. This underscores the importance of understanding each other's genuine goals and identifying common ground for fruitful collaborations.
-
GSK and 23andMe4
In 2018, GSK and 23andMe established a multi-year collaboration aimed at uncovering new drug targets. This venture harnesses human genetic insights to drive discovery efforts, targeting emerging disease subsets. The primary focus lies in crafting therapies to address critical medical needs, leveraging newfound drug targets and accelerating progression of clinical programs, as drug targets backed by genetic validation show significantly higher potential for patient benefit and therapeutic success.
23andMe possesses the world's largest repository of re-contactable genetic and phenotypic data from willing participants, totaling over 5 million customers5. Its data science capabilities offer individuals the opportunity to explore their genetic profiles, engage in research initiatives, and contribute valuable information to an ever-evolving database. Conversely, GSK brings extensive capabilities in drug discovery and development to the table, including access to additional data sources, in-house target validation expertise, and a thorough understanding of genetics. Moreover, the manufacturing capabilities, commercial infrastructure, and scale of a global PharmaCo such as GSK can strengthen partner activities across the research and development spectrum. Following the initial 5-year discovery collaboration, 23andMe announced an extension of the partnership in 2023, through a new data licensing agreement with GSK. This agreement enables GSK to tap into 23andMe's extensive database, for novel drug target discovery and other research endeavors. This partnership underscores the value of an independently successful business models for long-term sustainability.
-
Novo Nordisk and Echosens6
In June 2022, Novo Nordisk and Echosens unveiled a collaborative partnership aimed at boosting diagnostic rates for severe non-alcoholic steatohepatitis (NASH), amassing clinical and real-world evidence for non-invasive diagnostics, and heightening awareness of the importance of early diagnosis and treatment. NASH, a chronic metabolic liver ailment impacting approximately 115 million7 individuals globally, poses a significant risk of progressing to advanced liver conditions and potentially resulting in fatalities. Yet timely diagnosis of NASH is missed in around 90% of patients, due to the absence of early-stage symptoms, limited public awareness, or the lack of broadly applicable screening methods.
Recognizing the widespread underdiagnosis of NASH, Novo Nordisk has invested in NASH treatments such as semaglutide (Phase III) and FGF-21 (Phase II). As timely identification of NASH is crucial to early care, Novo Nordisk was prompted to partner with Echosens. Its development of FibroScan, a non-invasive method for early NASH diagnosis, positioned Echosens as a viable partner. Liver biopsy is the current standard for confirming NASH diagnosis, but Echosens aims to generate data and raise awareness to encourage adoption of FibroScan for non-invasive diagnostics. In essence, this partnership underscores the importance of establishing mutual goals that cannot be achieved independently, thereby motivating all parties involved and leveraging complementary capabilities.
Improving the success rate of future partnerships
Based on the analysis of prominent case examples and our research, we determine that successful partnerships take TIME.
The attributes requiring the strongest focus in each dimension may vary depending on the partnership type, but assessing and implementing the TIME formula is vital to its success.
Be the right partner
PharmaCos should primarily seek mid- to longer-term partnerships with stakeholders who prove themselves trustworthy. PharmaCos can apply the trust formula to build confidence and assess partner trustworthiness.
Partner with self-sufficiency and commitment
Successful partnerships go beyond mere financial transactions. They require a deep commitment that acknowledges each other's expertise, and a shared vision for a sustainable business model. While financial value is undoubtedly important, it's often the commitment to collaboration and leveraging each partner's strengths that truly drives success, especially within the complex, multi-dimensional healthcare system.
Moreover, a self-sustaining business model is essential for the longevity of any partnership. It ensures both parties are invested in the venture’s success, beyond immediate gains. Aligning incentives and sharing risks enables partners to work towards a common goal, while maintaining the flexibility to evolve as market dynamics shift. This requires the commitment to open communication, transparency, and the willingness to adapt strategies as needed.
Partnerships built solely on financial gain often lack the foundation needed to weather challenges and adapt to changing circumstances. Time commitment and adapting to each other's working styles are paramount for a successful lasting business partnership. Investing time fosters trust and understanding, essential for effective collaboration. Adapting to diverse working styles enhances synergy, enabling partners to capitalize on complementary strengths. This is often massively underestimated in collaborations between corporates and the public sector.
Successful partnerships are further characterized by a shared vision that extends beyond short-term profitability. Financial returns, while important, should not be the sole driving force. Instead, partners should aspire to create lasting value for healthcare ecosystem stakeholders.
Drive towards a common target
Striving for common goals fosters strength and cooperation in partnerships by creating synergies. Prioritizing transparency over individual goals cultivates trust and understanding, essential for effective collaboration. Aligning expectations ensures clarity and reduces the likelihood of misunderstandings or conflicts. Maximizing value for the partnership and its ecosystem encourages a focus on collective success, driving innovation and sustainable growth. Working towards shared objectives leverages partner strengths, resources, and expertise more effectively, boosting resilience and achievement.
In essence, the united pursuit of common goals forms the bedrock of successful partnerships, fostering mutual benefit and enduring relationships.
Engage across various stakeholders
Single-stakeholder focused partnerships within the pharmaceutical industry undoubtedly offer a streamlined approach, enabling efficient decision-making and swift execution of strategies. However, in the healthcare ecosystem multi-stakeholder partnerships bring together a more diverse array of stakeholders. Such partnerships enable the pooling of diverse expertise, resources, and perspectives. Ultimately, this diversity fosters comprehensive problem-solving, ensuring that the various facets of an issue are thoroughly addressed.
Moreover, multi-stakeholder partnerships enhance decision-making within the larger ecosystem, by incorporating inputs from different stakeholders. This inclusive approach not only results in more robust and well-informed decisions, but also promotes transparency and accountability across the board. Such partnerships can lead to solutions that are more sustainable and acceptable to a wider range of stakeholders, thereby enhancing credibility within the industry and among the public.
Most importantly, multi-stakeholder partnerships have the potential to significantly improve patient outcomes. By integrating the perspectives of patients, healthcare providers, and other relevant stakeholders into the drug development process and healthcare delivery systems, these partnerships ensure that patient needs and preferences are prioritized. This patient-centric approach leads to the development of more effective treatments, better access to healthcare services, and ultimately improved health outcomes for individuals and communities. Thus, while single-stakeholder partnerships may offer efficiency, multi-stakeholder partnerships are crucial in fostering innovation, inclusivity, and ultimately better outcomes for patients and society.
Sebastian Kwisda, former Manager at Strategy& Switzerland, also contributed to this article.
Contact us
