Johnson & Johnson President Alex Gorsky: "Our recent priority is to accelerate growth globally through innovation and operational efficiency. Internally we have established a rigorous management process to better focus. We are launching a new business model. And the customer experience to address the development of medical integration and medical alternative resources. We also see that technology and data are having an increasing impact on the products and services we provide, and we are improving the results in a cost-effective manner."
Looking at the global business market, the wave of digitization is already unstoppable. The heavily sturdy medical industry is also being refactored.
McKinsey created a metric to assess the performance of companies in various industries in terms of digital maturity. Digital leaders tend to score between 70 and 80, with the best performing industries, such as retail, travel and hospitality, with an average net score between 40 and 50. The global average maturity score for all companies in McKinsey research is 33, and the average for the pharmaceutical industry is 27. Why is Lizi behind in this industry called innovation-driven and genetic? The reason is simple. The McKinsey report also states that only 10% of companies say they have clear and clear cognitive and strategic response decisions about how digital influences their business.
But the direction of the tide is determined by the 10% of the company. Johnson & Johnson is one of them.
Starting from consumer goods to focusing on pharmaceuticals
In 1886, the American pharmacist Robert Wood Johnson joined forces with his two brothers to start surgical dressing supplies at an old wallpaper factory. The company had only 14 employees. Today, Johnson & Johnson has more than 200 companies and 134,000 employees worldwide.
Johnson & Johnson entered the medical field not in accordance with the path of producing over-the-counter drugs. Johnson & Johnson was accompanied by the sterility theory put forward by Dr. Liszt, who produced sterile gauze and disinfection bandages at that time.
At the end of the 19th century, Johnson & Johnson vigorously developed the consumer health products business. For example, the baby talcum powder launched once accounted for more than 40% of Johnson & Johnson's revenue. And other floss and mouthwash. And the Bondi band-aid that was invented in 1920. Bondi was not only synonymous with band-aid, but also the best-selling product of Johnson & Johnson.
Johnson & Johnson really strode into the prescription drug market, which began in the mid-20th century, when it was only a Johnson & Johnson of a small pharmaceutical company, and successively acquired several companies focused on pharmaceuticals. In 1959, Johnson & Johnson acquired the McGeil Laboratories of Switzerland and the production of the children's prescription drug Tylenol. In 1961, Johnson & Johnson acquired the Belgian Janssen Pharmaceuticals. These two acquisitions have allowed Johnson & Johnson to gather the power of prescription drug research and development.
After having a prescription drug, Johnson & Johnson also began to get involved in the medical device field. In 1986, Johnson & Johnson purchased LifeScan's blood glucose meter production line. In 1996, it acquired Cordis and its heart and arterial stent products. In 1999, it acquired the biotechnology company Centocor.
Note: The fiscal year does not coincide with the natural year.
Unit: million dollars
After more than 120 years of development, Johnson & Johnson has formed a structure driven by the three main businesses of pharmaceuticals, medical devices and consumer goods. It can be seen from the revenue data of the past years that the pharmaceutical business has always been a big part of Johnson & Johnson. Although Johnson & Johnson has its triangle, but the structure is not stable, the first to bear the brunt is Johnson & Johnson's diagnostic business. In the second quarter of 2018, the pharmaceutical segment sales were 10.4 billion US dollars, an increase of 17.6%. However, the medical device business grew by only 2% during the same period. In the long run, in 2017, the pharmaceutical business accounted for 47.4% of Johnson & Johnson's total revenue. In the past five years, the pharmaceutical business has grown at an average rate of more than 7%, while the other two businesses, the medical device and consumer goods businesses, have been flat.
Johnson & Johnson is also more optimistic about the pharmaceutical sector. In March of this year, Johnson & Johnson sold its blood glucose meter subsidiary LifeScan for $2.1 billion. Johnson & Johnson's non-core business, such as the sale of these blood glucose meters, is to withdraw from the highly competitive low-profit sector and return to its core business. At the same time as the medical device business was sold, Johnson & Johnson spent $30 billion to acquire Actelion, a company specializing in rare disease drugs. The acquisition of Actelion is the biggest work since Johnson & Johnson was founded. Johnson & Johnson also regarded the rare disease pharmaceutical industry as another growth pole and became the sixth largest therapeutic field. Form a differentiated, leading drug portfolio.
Pharmaceutical business faces difficulties
However, Johnson & Johnson tightens its business, and its main focus on pharmaceuticals is that it can be left unattended. Not to mention that among the top 10 pharmaceutical companies in the world, each family has its own magic weapon, and each family is also pressing step by step. The pharmaceutical business itself is facing more and more problems.
First, in terms of policy regulation, sales of pharmaceutical companies are affected by government medical programs and private insurance plans. With more and more medical expenses, financial pressures are growing. Global health care spending is expected to reach $8.7 trillion by 2020, which will put tremendous pressure on the health care system. The payers of the public sector and health care services will drive down the price of medical services.
And the reform of the medical system, there are already can see the payment side began to integrate the value chain provided by the past for health care services. After the integration begins, the paying party will have stronger bargaining power for the pharmaceutical companies, which will bring greater pricing pressure to the pharmaceutical companies. On the other hand, the influence of the public sector as a payer on regulatory policies will place more obstacles for these large pharmaceutical companies. For example, in China, multinational pharmaceutical companies want to let anti-cancer drugs enter medical insurance, expand drug accessibility, and prices will face lumps.
Johnson & Johnson bluntly mentioned that the existing public policy in the United States is not conducive to intellectual property rights and patent protection. In Japan and Europe and the United States, the government is widely involved in health care financing. In the emerging markets such as China, the State Council's Office of the Medical Reform Office's "Opinions on Reforming and Improving the Supply and Protection Policy of Generic Drugs" has been launched, and the market position of the original research drugs in China has faced severe challenges.
In addition to the policy, the competition of generic drugs brought by patented cliffs can be said to be the life burden that pharmaceutical companies can't bear. Taking Johnson's REMICADE® (infliximab) as an example, infliximab can treat rheumatoid arthritis, Crohn's disease, and psoriasis. Infliximab can account for 8.3% of Johnson & Johnson's revenue. But the drug is facing competition from biosimilars, and its market share in Europe has fallen by 50%. Zytiga, an important drug for Johnson & Johnson, to treat prostate cancer, also ushered in patent expiration in 2018. Zytiga's sales last year were $2.505 billion, accounting for 34% of Johnson & Johnson's drug sales.
Of course, the research and development capabilities of multinational pharmaceutical companies are not to be underestimated, they can develop new drugs. But almost every pharmaceutical company hopes to break through major diseases that have not yet been resolved. Drugs in the field of tumors and immunization are being closely watched by families. In the case of prostate cancer drugs, Johnson & Johnson has invested heavily in it, but Pfizer and Roche have the same input.
The development of new drugs requires a lot of cost, and the failure of clinical trials can bring heavy losses to pharmaceutical companies. Last year, the FDA declined to approve a Biologic License Application (BLA) for Johnson & Johnson's IL-6 anti-inflammatory drug sirukumab, which seeks to approve treatment for moderate to severe rheumatoid arthritis (RA). The failure of the project allowed Johnson & Johnson to have "blockbuster" drugs such as Imbruvica and Darzalex in 2017, but it still became a regret that Johnson & Johnson could not erase in 2017.
Pharmaceutical companies do not prescribe drugs
Whether there is a "blockbuster" class of new drugs has become a straw for large pharmaceutical companies, and digital innovation is often seen as a icing on the road to accelerated research and development. However, the solution to the problem of pharmaceutical companies is not the medicine. A report from Accenture pointed out that among the best-selling top10 drugs, those who took them only played a role in 4%-25% of patients taking the drug. If you want to improve your health, the solution should not depend on the “blockbuster†drug, but how to provide more support to patients.
So the prescription of the pharmaceutical company is not medicine, but how to change the service. Services are health-related management tools for patients, providers, or caregivers that enable patients to achieve better health outcomes. Services include a rapidly expanding set of interventions such as digital tools and applications, care support, remote monitoring, counseling and transfer.
As the entire healthcare system moves toward a personalized and value-based system. Value-based medical services mean that pharmaceutical companies need to shift from product quality to consumer-centric, transparent, accessible, and quality-assured services. Turning to a service strategy can save pharmaceutical companies $50 billion in capital and make these funds more valuable.
Obviously who chooses to watch this time, who will fall behind. After all, even Internet technology companies like Apple and Google are integrating the entire market.
Jorge Mesquita, president of Johnson & Johnson, said: “At the heart of these rapid changes, there is a new consumer-centric model that completely overturns the cost scale and value scale of the products we know. Innovation in the past There are certain barriers for industry, but innovation can now be achieved through an external partnership network. In addition, for companies like Johnson & Johnson, financial strength is not as important as it used to be, as new start-ups can pass relatively easily. The venture capital is funded.
Johnson & Johnson, which has frequently faced consumer questioning in medical devices and consumer health care businesses, recognizes the status quo and moves toward a value-centered healthcare system transformation. Johnson & Johnson believes that the next step in expanding the pharmaceutical business is to ensure that the company can introduce new products and increase the accessibility and market penetration of existing products.
The role of digital transformation is as Johnson & Johnson's chief information officer and vice president said: "Our business strategy is not based on what we think we can do, but how to support our goals and shape us in the next three to five years. Process."
It is also necessary to fight hard, and the internal digital transformation of Johnson & Johnson
The arterial network has taken stock of several digital innovations transformed by large pharmaceutical companies, although digital innovations range from drug discovery to clinical trials to drug sales and supply chain and investment incubation. However, it can be found from the previous inventory that large pharmaceutical companies have different focuses in digital innovation. For Johnson & Johnson, the most powerful part of the digital transformation is the digital transformation of internal management.
Johnson & Johnson Vice President and Chief Information Officer Stuart M. McGuigan pointed out: "IT work is to change the internal management system from the background function to the real innovation engine." In the pharmaceutical industry, digitization has previously only played a role in manufacturing, designing, analyzing and submitting regulatory documents. Now, digital transformation solutions can change the rules of the pharmaceutical company's game in every way by putting the digital strategy in the right place.
Stuart M. McGuigan said in an interview about the reasons for the internal digital transformation of Johnson & Johnson. He pointed out: "Although Johnson & Johnson's existing consumer goods business and life sciences business are mostly in offline business, it is undoubted that e-commerce is the future. In addition, the entire healthcare system is evolving toward precision medicine . A large amount of data and analysis is driving personalized medicine. Advanced tools like machine learning can directly understand which personalized medical methods can improve life. Quality, reducing follow-up medical costs, preventing disease recurrence in specific populations, and reducing the rate of rehospitalization. These techniques are very exciting and there are still huge application scenarios even after decades."
In digital innovation, innovation in internal processes is often a neglected part. But internal digitization is related to using the original data to reconstruct the workflow and create greater benefits. It is also very important to drive the entire digital process. True digital innovation should be innovation from the internal core to the supply chain. Pharmaceutical companies want to implement user-centric processes at the front end, and digital business processes must also be implemented in the background. What's more, the cost of maintaining a raw system for a pharmaceutical company may even be higher than building a new digital system.
Johnson & Johnson has more than 200 independently operating companies in more than 60 locations around the world. The digitization of Johnson & Johnson internal processes can first address information access across departments and organizations, and transfer content to hybrid clouds to unlock key information values ​​from legacy systems. . Johnson & Johnson also uses analysis to obtain complete customer images, providing demand forecasting and pricing simulations.
Johnson & Johnson has invested more than $2 billion in technology every year and is now seeing results. Song Miao, vice president of Johnson & Johnson's chief information officer, said: "In the cloud's turn, Johnson and Johnson have created an integrated, scalable and secure GxP cloud IT platform, which is now stored by our hybrid cloud. The amount of data is 2.8 times that of Google's daily processing data. Johnson & Johnson is now 90% of the business is now in the cloud."
Other process innovations
AI plus drug discovery
The team from Johnson & Johnson's Janssen Pharmaceuticals used artificial intelligence to redefine drug discovery. Yangsen Pharmaceutical scientists at Cell Chemical Biology called Yangsen's team of scientists to discover a new way to use artificial intelligence to help speed up the drug development process. The use of machine learning to accomplish tasks that usually require mental and intellectual needs to be accomplished.
In traditional drug development trials, cells that represent a particular disease are typically photographed by exposure to various compounds. A microscope snapshot was taken for each subsequent reaction. An experiment may produce 500,000 snapshots. Scientists use AI to sort out and help find compounds that respond specifically to related diseases.
Yangsen scientist Hugo and his team found that using this new approach to artificial intelligence can increase drug development efficiency by up to 250 times over traditional methods. He said: "In the pharmaceutical field, many medical needs need to be met. Our algorithms can help to organize relevant information more effectively, find better treatments faster, and benefit patients."
Supply chain digital innovation
Remo Colarusso, vice president of Johnson & Johnson Pharmaceuticals, said: "We are working hard to optimize the supply chain so that we can not only meet the needs of patients, but also be able to predict and understand the needs of patients and transform themselves to meet their needs. The healthcare industry is rapidly Using digital technology to help change the course of human health: Today, 57% of patients use connected devices to share important data, such as blood glucose readings or blood pressure data, with physicians. At the same time, healthcare providers are providing medical services in the same innovative way. , for example, passing test results and online appointments.
Digital innovation in the supply chain enables the use of internal data and analytics to drive business decision-making processes. Although pharmaceutical companies have a large amount of data, these data are in an island state and cannot extract valuable information. Advanced technologies such as big data, agile analytics and artificial intelligence can help pharmaceutical companies gain insight into market dynamics and consumer behavioral intelligence. The key to driving the strategic business decision-making process.
For example, the robot yumi in the Johnson & Johnson supply chain team, a collaborative robot, can perform some repetitive assembly tasks to help increase productivity and deliver products to consumers faster. The robot has been working in Johnson & Johnson in France since 2015. It is very precise and can even be needled to make its supply chain work highly accurate.
Supply chain innovation allows Johnson & Johnson to quickly identify problems in the production process and predict them before they occur. Before digitization, there is not enough data to support such operations, and there is no such real-time data processing capability.
Serving patients, not just medicines
Pharmaceutical companies want to establish more direct contact with patients, and participate in the health and health management of patients, all major pharmaceutical companies have launched their own health management APP. Johnson & Johnson is optimistic about future health care solutions, and hopes to improve health outcomes through early intervention in combination with consumption and medical care. Advocate a sustainable change in health behaviors, participate in health management in the early stages of consumer care, and use the full process data to capture value.
Johnson & Johnson's future medical pathway should be able to assess factors affecting individual health behaviors before the clinic, using data-based recommendations to consumers to make appropriate health improvement behaviors. Use practical experience and evidence to improve efficiency and measure impact size. Finally, use data analysis to better understand consumers and learn to evolve processes. In the digital health, Johnson & Johnson launched a variety of APP.
One-touch Reveal
One-touch Reveal is another mobile app that helps diabetics easily monitor and control blood sugar levels. Connected to J&J's one-click blood glucose meter, the app tracks patient blood glucose levels, helps visualize trends and share data with doctors.
7minute workout APP
The APP is like the Johnson & Johnson version of KEEP. It can be synchronized with the iPhone's health app, recommending different workouts and strengths based on overall fitness levels to keep the sport alive. And Johnson's app is especially suitable for beginners, it has 12 different half-minute practice recommended. At the same time, the app also has a built-in coach video.
Rest Devices
Boston-based Rest Devices announced a partnership with Johnson & Johnson to develop a smart, personalized sleep guidance system for babies (and their parents, using a smartphone to hover in a crib). Includes a wearable baby monitor called Mimo and a companion app called Nod.
Investment and incubator
As mentioned at the beginning of the article, innovative companies can get a lot of money through venture capital and have the power to face up with traditional companies. Of course, advancing these innovative companies in advance can be a win-win solution. In 2017, Johnson & Johnson conducted 21 investments through its Johnson & Johnson Innovative Company.
Johnson & Johnson has expanded its search for innovative medical solutions with 22 QuickFire Challenge projects starting in 2014, with more than 1,500 applicants from around the world participating. These challenges range from a wide range of areas, from artificial intelligence to baby care to drug safety. Johnson & Johnson will continue to expand the field of competition, and the three QuickFire challenges in digital beauty, future lab coats and other areas will be launched in 2018.
In June of this year, Johnson & Johnson announced the launch of the QuickFire Lung Cancer Challenge in Shanghai. In China, Johnson & Johnson also cooperated with Shanghai Pudong District Government to establish Shanghai JLABS Incubation Park.
Dr. Robert G. Urban, Global Head of Johnson & Johnson Innovation LLC, said: "At Johnson & Johnson, we use a collaborative approach that works together and based on the needs of the company and its technology. We customize every transaction so that we can accelerate the best science and technology to solve today's healthcare challenges. We have achieved incredible results in external innovation because we built more than 60 important things in 2017. New strategic relationship."
summary
In any industry, consumers never pay more for the historical tradition of the business. Johnson's talcum powder and shower gel and vaginal mesh in medical devices face litigation abroad. Johnson & Johnson has always hoped to participate in the emerging health care reform. Johnson & Johnson's innovation also has its own localization characteristics, and innovative experiments are carried out in combination with different environments in different regions.
At the same time, the best route to be optimistic in Johnson & Johnson's innovation is still a project that can closely integrate its consumer goods, pharmaceuticals, and medical equipment businesses. Provide an integrated approach to prevent, intervene and treat patients. For example, Johnson & Johnson initiated the use of artificial intelligence to detect signs of early Alzheimer's disease and used voice recognition to monitor the brain health of the elderly online. Whether it is Johnson & Johnson's digital transformation or supply chain transformation, it also covers three business pipelines.
In pharmaceuticals, Johnson & Johnson hopes to introduce disruptive products that turn existing incurable diseases into diseases that can be controlled and managed. In the face of the future, Johnson & Johnson hopes to continue to innovate and break through and find a new stage of export.
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