Three years ago, the $50 billion Swiss pharmaceutical company Roche found itself in need of an innovation shake-up. Roche executives, like their peers at rival drug makers, were under pressure from investors to lower the cost of drug development, which can reach $1.6 billion per drug. At the same time, insurers and government health payers were demanding that pharma companies justify their drug prices with more data that showed positive patient outcomes.
Roche, with 85,000 employees, had no dedicated innovation team at the time. Now, its 10-person Innovation Management unit, helmed by Sheila Babnis, evaluates 10 to 20 new ideas per quarter, and is overseeing between 20 and 60 on-going projects at any given time. Babnis is part of Roche’s Pharmaceutical Development (PD) division, splitting her time between Roche headquarters in Basel and San Francisco. She reports to Corsee Sanders, Roche’s Senior Vice President for Development Innovation & Clinical Operations.
Getting Started
Babnis’ team started as a “strategic project” with a charge from upper management to make the company’s drug development processes more patient-centric. That meant a shift, she said, away from focusing on the traditional metrics of drug safety and efficacy.
The company had always measured outcomes, Babnis says, “but we were looking at it in a scientific way, not in terms of bringing people back to having effective societal lives. So we started having a conversation about that, and that is where we started to shift our thinking.”
Over the course of a year, Roche underwent a three-step process to move towards open innovation, by first involving the business as a whole, and then patients and partners.
Phase 1 – Crowdsourcing the Mission Internally
The first project Babnis’ team took on was to ask employees throughout the business to brainstorm what Roche innovation should focus on. This crowd-sourcing exercise came up with three broad themes:
- 1. Exploring ways Roche could use its own data to improve the business
- 2. Creating a permanent innovation hub (this evolved into the Innovation Management group)
- 3. “Trial to patient” – Babnis said this broadly described ways to connect with the patient to understand their needs and their perspective as part of how the company designed its clinical trials.
From there, Babnis enlisted an outside firm for several months to identify “drill sites” within each of those broad themes.
Phase 2 – Bringing in Patients and Partners
About a year and a half ago, Babnis’ team started bringing in patients as part of an advisory group, including one patient with Crohn’s disease and another representing patients with neurodegenerative diseases.
The company also started engaging strategic partners to help further the patient-centric mission. As an example, Babnis mentioned a collaboration with insurer UnitedHealth Group, using their heat map data to identify pockets of Alzheimer’s patients who may not live close to large academic medical centers, so Roche can set up new clinical trial sites in those communities. This would increase convenience for patients, and likely help Roche recruit patients more quickly, lowering the costs of a trial.
“Some years ago, Roche relied on almost 100 percent internal ideas, and they were usually efficiency ideas, so the changes were incremental,” Babnis says. “Over the past year, that has shifted to 60 percent outside ideas, 40 percent inside.” Babnis says she likes that ratio’s mix of “quick-win efficiency things” and longer-term, more challenging projects.
Phase 3 – Imaginarium
Roche is now moving into the third phase of its shift to patient-centric innovation, which they call the “Imaginarium.” It’s a team that converges to take on a single concept, using role-playing to identify hurdles and opportunities.
“We are trying to reimagine how to execute a trial from the patient perspective,” Babnis says. “Every team has instituted a different way to connect and work with patients, from social media to accessing physicians in real-time to get their perspective, to telemedicine. We bring in a patient, doctor, nurse, and telemedicine experts and we role-play how to it would be to run the trial. Then we prototype how to design the trial to make it better for patients in different disease areas.”
The teams also make use of social media, videos, and other resources to understand the patient point-of-view. For instance, one Imaginarium team designing lupus trials viewed a video from a group of patients describing how difficult it is to go outside with rashes and how some patients had had to quit school.
The Model – By the Business for the Business
Babnis says Roche’s experience has shown that close ties and shared staff with business units is crucial. “We find that doing innovation within the business, it sticks much better than if it is done to the business,” she says. “So we have an interesting resource model – there are 25 people running projects throughout the business, but they are not all part of the Innovation Management group. We get them through part-time assignments from their managers who are interested in supporting that employee.”
“We also have rotation assignments. So for people you would classify as high-potential, or having high leadership abilities, they may rotate to my group for 12-18 months. Last year, we had five full-time rotations. The backgrounds are quite varied — a couple of MDs, and one person assigned from finance to do modeling and simulation to measure the impact of certain projects on the business.”
The Idea Machine
Babnis’ team oversees an idea submission site called Idea Zone that allows any employee to submit any idea. “We also have an open innovation platform,” she adds, “where an employee can post a challenge, and ask the internal community to help. There’s another external tool we use, called Innocentive, where we actually pay people for ideas.”
“Generally two years ago, someone would come to us with an idea and ask us for money, and this is how we got momentum going,” Babnis says. “But last year we changed our philosophy. Now that we have tons of ideas, it’s time to pick some things to move forward, which go through a rigorous four-phase process.” The phases are:
- 1. Concept
- 2. Test
- 3. Scale
- 4. Adopt
Babnis said most projects stay within her group for phases one and two, then move on to the appropriate business unit for the scale and adopt phases.
Winnowing and Measuring Success
“We test ten to twenty ideas over a quarter, but not through all four phases. Some things you know in four weeks that it’s not going to work and you kill them off right away. Others you continue on with. The hardest part of the whole thing is that there may be ten good concepts, but you can’t staff and resource all of those, so you have to choose maybe four or five to move forward.”
Babnis says her team’s metrics for success include both quantitative and qualitative measures. Those include “trust and credibility with patients, access to drugs and solutions that make a difference to patients, and growing the number of Roche teams being courageous like our patients are.”
