Decision-making asymmetry that matters to all of us

With the release of?the annual Pharmaceutical Innovation and Invention Index?this year, we faced a question: do we include the Covid vaccines/ drugs? (We knew what a huge skew Pfizer’s vaccine would represent.)

Of course, we had our ‘IDEA Razor’ - ‘if you gave the same drug to two different companies in phase I, would they be equally successful?’ So this new question actually presented an ideal real world example. As?Sy and I wrote in STAT, this wasn’t an industry that was short of candidates back in 2020 (and it is still critical that we become better at finding out ‘best’ candidates earlier…). Instead, what we saw, with AstraZeneca and Pfizer especially, but good shouts to Moderna and J&J, was a decision-making asymmetry that mattered to all of us.

This is why we do the Index, after all - no-one pays (or elects) to be included, we don’t charge anyone for it. We do it because it teaches us about innovation - real innovation, not HBR versions of it. And this remarkable two years has presented a wonderful lens on how different companies can be, and how differently they can behave.

As we said?in the Fortune article?that premiered this year’s rankings,?

Innovation, a force which ostensibly drives the lifeblood of the biopharmaceutical industry, is an oft-misunderstood concept. Not every act of invention is one of innovation—innovation implies staying power, the long-term realization of the value of an invention, and a foundation for future growth. Creating a new drug means little if it can’t be leveraged in a way that provides value to patients and the public, to stakeholders, and to the drug’s maker.

The pandemic’s effect on the biotech and pharma pecking order cannot be overstated. In just a single year,?Pfizer?and partner BioNTech’s?COVID vaccine?nearly doubled the drug giant’s revenues, with $36.8 billion of its 2021 revenues, or 45% of its global $81.3 billion in sales, fueled by the vaccine alone. Pfizer is?expecting another $32 billion in vaccine salesthis year in addition to $22 billion in sales of its COVID-fighting antiviral, Paxlovid. For context, AbbVie’s arthritis and psoriasis treatment, Humira, the world’s best-selling drug for nearly a decade, garnered $20.7 billion in 2021 sales. Merck’s extraordinarily successful cancer immunotherapy Keytruda rang in fourth on the best-seller list, behind Moderna’s COVID vaccine.

Key to this asymmetry, to the ability to execute, at companies like Pfizer and AstraZeneca, were?a kind of agility based not just on?thinking, but knowing they could?do…?(Where ‘doing’ meant not just development, but manufacturing, distribution, commercialising - all of the things that?everyone?needs to consider, all of the time, but usually don’t.) At those two companies we saw a better way to make decisions.?

“The reason that Pfizer was in the position that it was in, to do what it did with the COVID vaccine, is the same as the penicillin story,” said Mike Rea, CEO of IDEA Pharma. “We all think of penicillin as, you know, petri dish type stuff, but it took a long time to get to the point where it could be scaled and distributed to do something useful with it.”

That dovetails with the success stories of Pfizer, BioNTech, and Moderna. “What Pfizer did this time around to set up their success was, for one, to be in the water when the wave came,” Rea added, explaining that Pfizer partner BioNTech was already on the hunt for a flu vaccine using mRNA technology, which the companies were able to leverage in their development of a COVID vaccine. “That ability to pivot shows an agile, innovative mindset, as does the ability to scale up manufacturing and distribution quickly.?Pfizer executives have publicly stated how much they focused on their processes for this stuff in the last four years, so it’s not even like they had, you know, a blank sheet of paper and just decided to do this in 2020. The structures were in place before then.”

It’s a similar story with the much smaller biotech Moderna, which had been crafting its experimental mRNA platform for a decade before COVID hit.?Meanwhile, Pfizer benefited deeply from remote patient monitoring initiatives it had already used for years in other disease spaces, and which proved invaluable in gathering real-world data as new coronavirus strains emerged over the past two years.

It’s easy to look at the revenue, for Pfizer in particular, as ‘simple’ opportunism, but the stark asymmetry of these past two years (where were ‘the vaccine companies’ in this, for example?) reveals so much about the value of?opportunity seeking behaviour as a critical mindset shift. At a time when some companies are doubling down on thinking they can pick winners, others are more focused on the process of making winners from what they have. You can’t always be right, but you can have a process that knows and accepts that.