The healthcare sector is undergoing unprecedented change. Aging populations and the rising incidence of chronic diseases have strained budgets, resulting in policy reforms that are changing the way healthcare is provided, consumed and paid for around the globe. The traditional contrast between the European universal payer system and the US freer market model is starting to fade, as more than half of US reimbursement now comes from public entities such as Medicare and Medicaid. In emerging markets, despite the rise of middle-class populations, challenges remain, from intellectual property to manufacturing quality, drug pricing. and patient access to health services.

Major players in the health ecosystem—patients, providers, manufacturers, and payers—are changing their behaviors in response by assuming more financial responsibility for improving health outcomes, adopting new technologies, and leveraging data to drive innovation and care delivery. In parallel, the confluence of radical advances in biotechnology and information technology is leading to a new model of precision medicine. It gives unprecedented power to individuals, and it allows the deep integration of the customer voice into innovation, from product co-creation to continuous monitoring.

As it has happened in many other industries, the entrance of nontraditional players is poised to disrupt the health industry and its incumbents, creating a cadre of new potential leaders. Some of these include consumer, telecom, and tech powerhouses; Apple, IBM, Google, Intel, and QualComm have all made major investments in health. A plethora of start-ups, particularly in the data analytics space, is also upending business as usual. Today, health data is fragmented and in silos.

While consumer data collected on smartphones and biosensors are still not connected to medical offices and electronic health records, there is great promise in eventually providing seamless care to patients, from research to the clinic, and moving from treatment of illness to prevention and prediction. Consumers have become accustomed to the convenience of personal technologies and will increasingly demand the same from their health providers, including more remote care and data sharing. With health budgets already under strain, the value generated by these insights may come at the expense of healthcare industry incumbents.

The global biopharmaceutical industry finds itself in the middle of this storm. In a world where payment will be based on demonstrating real value, the industry's traditional development and commercial strategies are no longer fit for purpose. Commercial-stage biopharma companies are beginning to adapt their strategies, reducing their dependence on large sales forces that promote undifferentiated products. They now seek to unlock value across their operations—from how they approach R & D (leveraging data and focusing on precision medicine and orphan diseases), to the evidence they collect to support value arguments, to providing “beyond-the-pill” solutions that may require partnerships with nontraditional entrants.

Emerging biotech companies working on exciting new science must also adapt their financing strategies to this new reality. No longer is it enough to sell investors on the promise of new scientific approaches. Biotechs must also articulate why their scientific advances will result in differentiation in a competitive global market. In Managing Biotechnology: From Science to Market in the Digital Age, Françoise Simon and Glen Giovannetti provide a comprehensive overview of the new business context and global strategies for biotechnology companies. The book is an important source of insight into critical topics such as networked innovation, alliances, commercialization, and digital communications. It serves as a roadmap to take concepts and products from science to market, and it captures the range of knowledge that students and managers need to leverage emerging technologies. It can also help interested policymakers aiming to grow and support biotech clusters worldwide to understand the risks, opportunities and challenges of the biotech industry.

This in-depth examination, based on the authors' broad experience, will be useful in teaching and inspiring current and future leaders across sectors driven by biotechnology. It will contribute high-value guidance for all stakeholders, from providers and payers to manufacturers. Most importantly, it may play a part in helping to bring new medicines to market and improving patients' lives and outcomes.

For biopharmaceutical firms, the future may hold an enabling scenario of optimized research, but it could also be a disruptive one, of disintermediation by infotechs of patient/provider communications. As the authors point out, success will depend on a melding of new cross-industry business models and of leading edge science, to improve the standard of patient care on a global scale.

By Philip Kotler

S.C. Johnson & Son Distinguished

Professor of International Marketing

Kellogg School of Management

Northwestern University