8OCTOBER 2023IN MY OPINIONRE-THINKING THE PHARMACEUTICAL VALUE CHAIN By Ivanna M. Rosendal, Senior Director, IT Business Partner, Ascendis PharmaOur industry is being faced with pressure to develop more innovative medicine at lower cost and accelerated speeds. Being able to adjust to these pressures may mean that we need to rethink how we are organised. In this article I argue that there is an alternative way of thinking about how we are organised, and outline a way to apply this thinking to your company. Pharmaceutical companies are still mostly organised according to functions, grouping people with similar skill sets in the same departments. This supports a waterfall approach to drug development, where one function completes an assignment and hands it off to the business function next in the value chain. According to Christian Born Djurhuus, this approach may no longer work. Let's take a ride in a helicopter, and consider what a pharmaceutical company looks like from the highest possible level. Five key Value Streams:Instead of grouping activities according to professional skill sets, we can get inspired by Lean Value Stream thinking and consider what are the overarching value streams in a Pharmaceutical company. I would argue that any pharmaceutical company or biotech can be divided into the five key Value Streams outlined in Figure 1 below: value Stream in a Pharmaceutical CompanyCompliance StreamQuality Pharmacovigilance RegulatoryLorem ipsumInnovation StreamDrug Discovery Product Development Clinical TrialsProduction StreamCMC Product supply DistributionCommercial StreamMedcial Affairs Market Access Marketing SalesCorporate StreamIP Legal Finance HR IT FacilitiesWill the regulatory bodies approve the drug?Does the drug work?Can we produce at scale?Can we sell and prot from the drug?Can we build an organization to realize potential of new and existing drugs?StakeholderValuespecific set of stakeholders in the industry. For example the Innovation Value Stream answers the question "Does the drug work?" and the Compliance Value Stream answers the question of "will the regulatory bodies approve the drug?" Remove one of these value streams, and you no longer have an integrated pharmaceutical company. Fail to answer one of these questions, and the company will struggle to develop and launch a drug successfully. Understanding the overarching streams in a company helps inform our thinking about what a pharmaceutical company is set out to accomplish, and avoid replicating the default organisational model that we may all have experienced in large pharmaceutical companies. This is a change in how we think about our companies. But to be actionable, we need to get more specific. Mapping out Value Creation To apply the value stream thinking to your organisation, I suggest considering what kind of value your organisation creates at a more detailed level. In order to get to that value, it helps to think through who the recipients of that value are. Think through your key stakeholders such as regulatory bodies, shareholders, pricing agencies, patients, caregivers, HCPs and so on, and think about what value you deliver to each stakeholder group. For example, a typical value could be "drug ready for human trials" completing the early research value stream, or "drug approved for reimbursement" completing the market access value stream. Having defined the value creation The figure shows value streams on the left hand side, with examples of departments that may fall into these. Each value stream answers a key question to a Figure 1: Five overarching Value Streams of a pharmaceutical companyFigure 2: Mapping Stakeholders to Value
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