“There is a new strategic partner for companies. It’s called the consumer,” says Josh Ghaim, PhD, CTO, Johnson & Johnson Family of Consumer Companies, speaking at the joint luncheon fireside chat at Digital Medicine Showcase and Medtech Showcase. The relevance of the consumer isn’t a new condition, but the role consumers play as companies make product development decisions may be.
Josh Ghaim, Chief Technology Officer, Johnson & Johnson Family of Consumer Companies
The difference is a change of mindset. For example, rather than focusing only on pharmaceutical products or only consumer products, Ghaim says, “We are a healthcare company. Everything we develop must address healthcare, at the pharmaceutical, behind-the-counter or over-the-counter level.” That end-to-end approach means that product developers within the company are focused on finding the fastest way to get safe, efficacious products to market, and that they take the extra step of envisioning whether those products could—or should—become consumer products in 10 years.
Focus long term
The consumer aspect is an important facet of business development. “Drugs have a patent life of 15 to 17 years,” he points out. After those patents expire, the market potential of the drug diminishes. For over-the-counter and behind-the-shelf products, however, revenues depend upon branding and consumer loyalty.
“For example, Listerine mouthwash was introduced 130 years ago. Its formula hasn’t changed, and it generates about USD 1.6 billion in revenue each year. Likewise, Tylenol is about 60 years old and is still selling strong.”
The interest in digital health provides similar opportunities. Ghaim cites a dermatologist who sold memberships for his practice, betting that people would pay for convenience and speed. “Taking your son to the dermatologist for acne used to mean taking a day off work and spending 30 minutes in a waiting room. At this practice, however, it means sending a photo of the condition to the physician, who diagnoses the problem and sends a prescription to your neighborhood pharmacy.”
With the ever increasing integration of communications technology into our lives, this model is likely to become much more pervasive in the coming years. In fact, Johnson & Johnson encourages its employees to use telemedicine options to help manage their own health.
Consumer and pharmaceutical products all need to show evidence of safety and efficacy. “To deliver that, Johnson & Johnson’s consumer groups conducts more than 1,000 clinical trials each year. That doesn’t happen at most consumer companies. Our pharmaceutical expertise is a huge advantage,” Ghaim says.
Business development in this industry, therefore, isn’t just about product margins, but whether you can build a brand that will be strong for 50 years, he says. “A product’s true value is in the long-tern brand you build.”
Research considers the healthcare continuum
Johnson & Johnson manages R&D end-to-end. “The R&D management committee meets monthly to review talent and technology,” he says. This ensures that ideas aren’t dismissed because managers aren’t familiar with the concept. For example, “If an entrepreneur approaches a pharma person about digital health, pharma probably won’t know what to do with it. But, our consumer insights people are looking at it, too. Once the discussion begins, the pharma and analytics people may come up with ways to use it to solve problems in their areas.”
Another example is Johnson & Johnson’s decision to address lung cancer. “China is one of the biggest markets, and 85% of those with lung cancer were smokers,” he points out. “Therefore, we’re looking not just at pharmaceutical interventions but also government policies and programs around prevention and smoking cessation to actually prevent the disease from occurring.”
In other conditions, like allergies, over-the-counter products may be sufficient. Many over-the-counter allergy medications today were prescription-based five years ago, he says. That migration equates to savings within the healthcare system and greater convenience for consumers. “For every dollar a person spends on an over-the-counter medication, there’s USD 7 saved in healthcare costs. And,” he adds, “people typically shop for medications 26 times per year. They visit a doctor only three times per year.”
One of the areas ripe for innovation, he says, is the intersection of healthcare and technology “Whoever figures that out will have some exciting healthcare advances.”
Talk with J&J Innovation Centers
“At Johnson & Johnson, we understand that innovative ideas come from everywhere—not just the region around headquarters,” Ghaim says. “Our organization is shifting so that more than half of our ideas come from outside our company.”
To make it easy to find the right person within its more than 260 companies, Johnson & Johnson formed four innovation centers with the sole purpose of identifying innovative ideas that fit its goals. “The best way to approach us is through these innovation centers or their satellites.”
When you approach the company, “know what problem you’re trying to solve and be willing to have non-confidential discussions,” he advises. “It’s okay to ask for guidance on ideas that aren’t fully fleshed out. If it fits within our sectors of interest, we’ll be happy to help.”
Beyond any specific area or innovation, however, “it’s very important, going forward, for people to understand the complete healthcare system,” Ghaim says. Innovation isn’t confined to the next new drug, but to how breakthroughs are applied at all levels of healthcare to support. Think beyond the prescription.