Pharmaceutical/high-tech alliances; transforming healthcare?

Abstract

Purpose Digitalization is changing businesses everywhere and the healthcare sector is no exception to this (r)evolution. Yet history teaches us that radical innovation rarely comes from within the industry. Big pharma is a potential victim of this rule. Its leaders should be worried. Some are already. The industry needs to develop its digital capabilities. Alliances with high tech companies may help this process. Design/methodology/approach The article adopts a critical analysis approach of alliances between the pharmaceutical and high-tech industries. The viewpoint is supported by revelatory case studies. Examples include Amazon and Pillpack as well as Google’s launch of Verily and Calico. Alliances between Novartis and Microsoft and Amazon as well as GSK and Google also provide supporting evidence. Findings Pharmaceutical companies are lagging behind in digital transformation. A recent McKinsey report found that the industry was well below the travel, hospitality and retail sectors in digitalization. It was barely more advanced that the public sector. Given the financial and intellectual resources within big pharma, this result seems nothing short of stunning. Originality/value This article offers an evidence-based viewpoint on the current state of digitalization within the pharmaceutical industry. It demonstrates the danger that high-tech companies present to big pharma and offers advice on how they may counteract such risks through alliances.