The Keystone Advantage for Pharma
How to Construct and Manage ‘Gravitational Pull’
Takeaway: Markets fare better when they link capacity-building.
“Ecosystems" are economic systems with the power to reset how an entire market works; or, like LillyDirect, they have the ‘kinetic potential’ to become a channel themselves, a new center-of-gravity around which entire categories of products and services are drawn and start rotating, creating a new orbit for ‘commercial model innovation’.
An ecosystem solves a cold network problem. And an ecosystem-centered market strategy uses the principles of biology to make the abstract “systems thinking” more accessible and practical. It pushes the premise of strategy itself into a new frame.
The process knowledge to construct and sustain a new industry ecosystem -- to intentionally position and manage the roadmap to a system advantage -- is a a different kind of expertise for brand, creative and technical management.
In an interview with CNBC shortly before the end of the year, Albert Bourla struck a positive tone about activist investor Starboard Value, saying he agreed with some of its criticisms, but maintained that Pfizer is headed in a good direction. “I think we are doing a lot of changes. But if Starboard, and anybody else for that matter, have good ideas, I will certainly discuss them and entertain.”
This week at JPMorgan, Bourla said Pfizer is going "all in" to develop its experimental obesity drug and has been recruiting more experts in that area. From Reuters’ coverage:
Bourla said the experts were helping Pfizer "make better and more sound decisions," and the company could start a late-stage study of its drug, danuglipron, in the second half of this year.
Through the drug, Pfizer aims to offer patients a more convenient alternative to injectable drugs — Eli Lilly's Zepbound and Novo Nordisk's Ozempic— that currently dominate the weight-loss treatment market.
Lilly and Novo are also developing their own oral treatments. Some analysts expect the market for these drugs to be worth more than $150 billion in annual sales by the early 2030s.
"We expect that we'll have a competitive profile," Bourla said, adding that Pfizer's pill could be the second to market after Eli Lilly's if the company is able to meet its timeline.
Which is a Standard Model frame of how competition currently “works” in the drug market and how “value” — the shareholder kind, the stakeholder kind, the payer kind, the patient kind, the employer kind — is created, sold and judged. It’s a screen play whose main characters, dialogue and camera angles go “way back to 1849, when Charles Pfizer and Charles Erhart started the company we know today as Pfizer”: my drug vs. your drug.
Said another way, If the ambition is to “dominate” the $150 billion market in weight loss, the pharmaceutical industry is either asking the wrong questions, or the questions are based on the wrong camera angle.
Should Pfizer Acquire Walgreens? Should Lilly?
Markets aren’t about “efficiency” — they’re about power and control. And market innovation is the deliberate process of finding and positioning power, of inventing leverage in an organized and persistent way. The end state is/are a new economic system (“ecosystem”) that becomes a control point, a way to displace an embedded economic network.
Many management teams miss or misunderstand the “conjuring” part of market innovation: markets are less ‘out there’ in the ether somewhere, but constructed deliberately.
A modern strategy is an entirely new form of intentionality, innovation at a system level, a technique that starts with the intentional combination of ‘market sets’ into a new economic system (“ecosystem”). Think ‘market interoperability’ before data interoperability. Everything is in the remix, the ‘differential connectedness’ that becomes voltage to spark the novel.
In the spirit of offering Albert good ideas to discuss and entertain, here’s how to launch a new orbit for competition in the markets for GLP-1 consumption + GLP-1 ‘evidence of value’:
Microsoft + Pfizer combining as keystones to invent ‘specialized cognition’ around the production of cardiometabolic health. (Microsoft would understand this as ‘computational imagination’; Pfizer would understand this as real-world evidence. The storyline to align value for both would be positioned as 'data on purpose'.)
Microsoft + Pfizer extending their keystone advantage to integrate Nestlé + Equinox in a $40,000 gym membership (something Equinox is already doing), packaged as a benefit innovation sold by, say, Cigna to say MGM Resorts as a strategy for employee retention (MGM just dropped coverage of GLP-1s for its 74,000 employees, but yet is also “desperate for workers”).
Microsoft + Pfizer + Nestlé acquiring Walgreens as a new care and service infrastructure for the United States, in the process rebranding Walgreens as ‘PfizerForAll’ and selling directly into employers, dislodging the control of Big PBMs on the economics of the drug market.
[You can get the same strategy story by swapping the lead characters, e.g., Google for Microsoft, Eli Lilly for Pfizer, Rite Aid for Walgreens. At a system level, the pieces are commodity inputs. What matters is how they’re combined into a new new industry narrative.]
Missing from the big confab in San Francisco — besides Cigna, Centene and Walgreens, who all dropped out, and UnitedHealthcare, which never attends — is a panel discussion with better ideas about market interoperability, original vision to crack the mad riddle of healthcare.
The elephant in the room is the room itself, an approach to business and product marketing in the pharmaceutical industry unchanged since before the first Ford Model T rolled off the assembly line in Detroit.
Don’t let all the AI-enabled slop distract: an entire system of thought is the problem.
When it comes to the “transformation thing” in the drug market — the commercial model kind, the market access kind, the digital kind, the patient kind, the kind that can be sold to the media and the board and the analysts on Wall Street — it's better to think in terms of gravitational pull, a new "universe" that rotates around the concepts of 'shared marketspace' and value alignment.
The leadership program for management teams and executive MBA programs the world over to practice is this: Conventional strategy plays the player. Strategy at a system level plays the board.
/ jgs
John G. Singer is Executive Director of Blue Spoon, the global leader in positioning strategy at a system level. Blue Spoon specializes in constructing new industry ecosystems.