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Companies are experimenting very actively with new discovery models, embedding researchers in academic groups, spinning out product portfolios with venture capitalists, and co-developing products with research charities and academics. I believe these are just the first 'straws in the wind;' we will see further changes in where products are sourced, as the NIH and major academic medical centers invest in discovery themselves, driven by the need for outside sources of revenue.

Many companies now spend half of their research budgets outside, and some are asking how much further might the trend need to go? A lot depends on whether the major companies can create small company dynamism inside their own walls. This is a very different leadership task from managing a massive global network.

Marketing and sales—or, as I relabeled it when I was ABPI Director General—"establishing value and access," is in the throes of major change. Sales forces are being scaled back, key account management is taking hold, and health economic value arguments are becoming more important than classic brand positioning and promotion.

The Tech Boom

Turning to the use of rapid advances in IT to drive the uptake of biopharma innovation is only in its earliest stages. Of course, person-to-person communications will always have a role, with governments, value agencies, health systems managers, and individual prescribers. But industry must embrace the new tools of mobile health and social networking. Otherwise these channels will be dominated by those whose interests are very different, and not obviously pro-innovation: powerful PBMs, new e-health entrants, anti-industry activists, and budget-conscious health system managers.

So early experiments with interactive websites, Twitter feeds, mobile patient education videos, and medication alerts to mobile phones are all welcome. But they need to be assessed very carefully from two quite different viewpoints: their effectiveness in getting 'the right medicine to the right patient at the right time' and their reputational impact. If we do not bear both in mind we will simply repeat the saga of DTC advertising.

So, profound change is already under way at all stages of industry's value chain. What are the barriers in our four Grand Challenge areas?

In discovery, so much has been invested in 'industrializing' research in big internal labs that it is hard to reorient to place multiple bets with multiple outsiders, and to invest the creativity and time to make the new relationships work.

Despite the many consortia and think-tank proposals, practical examples of progress on streamlining development are few and far between, as both companies and regulators are afflicted by risk aversion. Progress here must be measured by promising real product pilots, and these are still rare.

Marketing and sales organizations are still dominated by those who 'rose through the ranks' with very few imports from other industries to bring fresh perspectives and expertise in pricing for value, engaging customers in real time, and managing relationships for win-win outcomes.

In this area, a new mindset is as critical as new skills. In today's world—let alone tomorrow's—the major developed economies struggle to meet their health budget demands. Payers and health managers must take truly radical action to engage patients, reshape care, and realign incentives if the healthcare funding gap is not to widen further. The industry must be an ally—not a bystander—in that struggle.