Burning Differences: “Fireside Chat Explores How to Bridge Gaps in IT, Pharma Alliance Cultures
Posted By Jon Lavietes, Friday, January 8, 2021
The IT and biopharma industries make up a good portion of the strategic alliance and ASAP communities’ foundation. For many years, these two verticals worked largely in separate spheres where they approached alliances in different ways that reflect their respective industry landscapes, yet that never stopped professionals working in each of these contexts from learning from one another. Now, digital health collaborations between tech and biopharma are proliferating in our healthcare system, and working together is no longer optional.
What should pharma and IT companies be cognizant of when they enter these types of partnerships? A recent ASAP Netcast webinar, “Fireside Chat: Exploring Critical Partnering Practices Between Information Technology and Biopharma,” discussed the key divergences that need to be bridged and provided a broad compare-and-contrast of the two markets. Christopher Urban, head of alliance and integration management at Amgen, gave listeners an inside look into his company’s long-established alliance practice, which executes collaborations at all phases of the drug and alliance life cycles, while Don Busiek, senior vice president of strategic alliances at PTC, detailed how his company’s relatively nascent two-year-old alliance management function is architected.
Molecule Management vs. Partner Types
The biotech giant Amgen is made up of alliance centers of excellence that serve specific drug development phases. The common thread among collaborations run by Urban’s alliance group is that there is “a shared financial interest in a molecule” that requires traditional joint governance to manage. Urban’s team is not directly responsible for relationships that can be characterized as more “supplier/vendor” in nature.
Rather than organize in “stage-gate” fashion, PTC’s partnerships are divided into three categories:
- Channel Management: Resellers and smaller sell-through partners
- Technology Partners: Companies that fill a part of PTC’s suite of offerings
- Alliances: Partnerships where marketing, R&D, finance, legal, and customer success teams, among other facets of an organization, are all aligned and entwined
“It should be like you buy from one vendor when you buy from our alliance,” said Busiek, describing the latter group of collaborations, for which he is responsible. By way of example, he mentioned that PTC’s collaboration with Rockwell Automation involves 23 work streams, each representing a business unit or department. (For more insights into the PTC–Rockwell Automation alliance’s accomplishments, see “Business as Unusual,” Strategic Alliance Quarterly, Q3 2020).
Bridging Speed, Regulatory Cultural Barriers
As the body of work of digital health partnerships has grown in recent years, a few recurring challenges have emerged. Urban began by highlighting the disparity in the product quality standards that are considered the norm in the two industries.
“[Technology companies] work in scrum sessions, they deliver things called minimum viable product, and then they move on to the next step. Then you’ve got your culture at Amgen, where there is no such thing as a minimum viable product for a therapeutic. It has got to be perfect,” he said. “Getting across that culture barrier is an interesting challenge.”
This led neatly into what are arguably the two biggest gaps in the two cultures: speed and regulatory environment.
“You’ve got a culture of the partner, which is trying to move quickly, [and which] may not fully understand some of the regulated requirements of our industry. Then you’ve got the culture of Amgen [which], for all of our desire to move more quickly, can’t move as quickly as a technology company,” said Urban.
“There’s a speed difference,” Busiek acknowledged. “Your industry is much more heavily regulated.”
Not Aligned on Dashboard and Timing? Your Alliance Goose Is Cooked
Busiek has seen different expectations in timing torpedo alliances, even when everyone was in agreement on the collaboration’s end goals.
“You have to align on the metrics and the dashboard but also the timeframe with which that applies,” he explained. “Yes, we agree that we are going to get to ‘x,’ but I’m thinking we’re going to get to ‘x’ tomorrow, and you’re thinking we’re going to get to ‘x’ in two years. That doesn’t work.”
Metrics themselves represent another area where the two industries paint a vastly different picture.
PTC, for example, has predictable top-line metrics such as bookings, revenue, and new business, but the company also has marketing metrics around joint references in each stage of the sales funnel, R&D metrics around product releases and product gaps filled, and what Busiek termed “tactical metrics” that gauge things like whether the parties passed orders along in a timely manner or booked them expediently enough to recognize the revenue in the same quarter. Of course, he also reiterated that none of these KPIs matter if the parties aren’t in agreement on the partnership’s larger vision.
“Are we aligned at a leadership level around what the goals are, what that dashboard looks like, and how we measure it? Because if we’re misaligned, we’re cooked,” he said.
Hamstrung by Alignment Drift
Revenue metrics aren’t an option for many pharma relationships, particularly clinical-stage alliances that might go a decade before their first readout, said Urban.
“It may sound awkward, but we don’t measure ourselves on financial metrics. It’s not something that is characteristic of the partnership ecosystem we manage. We measure ourselves based upon the efficiency with which we keep the two companies aligned on that shared decision-making process,” he added.
Urban further explained that the evolution of companies’ financial position and organizational structure over a span of several years can result in disconnects.
“The way that the companies’ priorities or decision-making processes can evolve can really create a massive amount of wasted time and effort [and] inefficient decision-making escalation that could ultimately hamstring a product. The role of my group is to close that gap,” he said.
Urban and Busiek’s discussion revealed more great insights, such as the differences in how the companies construct and operationalize governance and how ASAP frameworks are applied within their respective practices. ASAP members, remember, you can rewatch "Fireside Chat: Exploring Critical Partnering Practices Between Information Technology and Biopharma" and other past ASAP Netcast webinars in our Member Resource Library.