Novartis Oncology Spain: Agile innovation and the RWE cell

Abstract

Healthcare and life science companies are transforming their business models from product development toward precision medicine. Vasant Narasimhan was appointed in 2018 as the new CEO of Novartis—a global pharma company. He champions a multi-faceted strategic intent: 1) transform the company from “selling pills” to investing heavily in discovering of new treatments that combine life sciences and digital technologies. In Spain, José Marcilla, the Director General of Novartis Oncology, pioneered an organizational transformation by developing (1) a cell-based innovation organization and process and (2) a new startup accelerator. This case explores both initiatives and their far-reaching consequences. The “Spanish experiment” helped to develop of digital services that reach the patient in a highly regulated environment. This duo of cases—Novartis Oncology Spain: Agile Innovation and The RWE (real wold evidence) Cell—gives students the opportunity to examine the motivations behind the transformation at Novartis, explore the implementation of its strategic intent, and ask what is the appropriate pace for such a dramatic change. The case is taught as a single class for decision-making regarding which cells and startups are suitable to be continued given the innovation horizons. By walking with students through these innovation horizons, the case enables decisions to be made about whether this pioneering Spanish program should be continued or not.

Keywords

Agile innovation design and creativity digital leadership digital transformation innovation organizational theory and change

Novartis Oncology Spain: Agile innovation (A)

Barcelona, May 2022

José Marcilla, Director General of Novartis Oncology,¹ and his team had paid great attention to detail in preparing their meeting with Vasant Narasimhan (MD) the Novartis CEO. Novartis Oncology Spain had launched 33 innovation cells in 2019, in which most of the employees in the Spanish subsidiary of Novartis had participated. In parallel, Novartis Spain launched the first edition of the Novartis Cancer Startup Program (NCSP) accelerator, where several startups had developed pilot projects in technology and in new digital business models for the healthcare ecosystem in Spain. Marion Chalumeau, innovation manager, had led the process, and Laura Linares, Head of Human Resources, and Reyes Calzada, Medical Director at Novartis Oncology Spain, had collaborated in the design of these innovation cells.

These initiatives sought to bring the strategic change championed by Narasimhan closer to the reality of the Spanish healthcare ecosystem, boosting innovative and high value-added treatments that made it necessary to drive digitization and transform Novartis’ culture. Consequently, Narasimhan was very interested in hearing about and evaluating the results of these initiatives. The management team in Spain thought that the initiative had been a success and, in the words of Marion Chalumeau, “it was possible to extend it to hospitals leading the field in cancer research and treatment.” The idea was that it could also be extended globally to Novartis’ entire organization.

Narasimhan went to the innovation and co-creation hub Barcelona Tech City in 2019,² where the results of the different innovation initiatives developed in Spain to fulfill the new Novartis vision and purpose (see Exhibit 1). During Narasimhan’s visit, the management team in Spain had shown him the first results of the project with the creation of innovation cells and technological startups, since “the innovative new treatments to which Novartis was committed required collaboration between many players in the healthcare ecosystem and the application of digital technologies to process patient data, not only to check the efficacy of the treatments, but also to improve the quality of life of patients and their relatives,” added Marcilla.

After stopping these initiatives due of the COVID-19 crisis, the key issue for Marcilla and his team was how to continue this project in the years to come, to create new capabilities in Spain. And, given the aim of driving new forms of collaboration within a multinational like Novartis the key issue for Marcilla was if the project would have global outreach.

Novartis: A new transformative leadership

In 2019, Novartis was a leading company in the pharmaceutical sector with net sales of 47,445 (USD m) billion euros and therapies that reached 800 million patients (Exhibits 2 and 3). The origins of the company go back to the 18^th century, although the name Novartis was established in 1996 following the merger of Ciba-Geigy and Sandoz.

On 1 February 2018, Novartis announced the appointment of a new CEO, Dr Vasant Narasimhan (MD), up until then Global Head of Drug Development and Chief Medical Officer at Novartis, who replaced Joseph Jimenez. The appointment of Narasimhan as new CEO was considered a paradigm shift, since on taking office he announced a radical strategic change toward the reinvention of medicine.

The main pillar of Novartis’ operations was research and development, with 23,000 scientists, doctors and professionals worldwide, whose remit was to discover new treatments and develop them, and Narasimhan wanted to energize the innovative character of the firm. Narasimhan decided to sell its ophthalmology division (Alcon) and Vaccines in 2015, in order to focus on high value business and restructure Novartis into Innovative Medicines, which included Novartis Pharmaceuticals and Novartis Oncology, and the Sandoz division, focusing on generic and biosimilar pharmaceutical specialties (Exhibits 3–5).

The main goal was to increase penetration in high value markets. In the past, pharma companies were structured to achieve efficiency in R&D, “produce pills” and sell them globally. But the change promoted by Narasimhan required Novartis to change its organization too, placing the patient at the center of the system and changing structures and processes. A new structure was required and a cultural change was implemented to build a leading health company powered by advanced therapy platforms, digital technologies and data science,³ the aim being to transform Novartis from a conventional pharma business into a “data science company.”⁴ But this required a change in mindset and culture expressed in three mottos: #BeInspired, #BeUnbossed, #BeCurious (see Exhibit 6).

Novartis in Spain

Novartis has been in Spain for 100 years. The company generated sales of 1610 million euros in 2019 in Spain, where cancer treatments represented 40% of the revenue stream. Cancer is related to aging. In 2019, 277,234 new cases of cancer were diagnosed in Spain, 12% more than in 2015. The number of new cases is expected to increase in the next two decades, reaching 29.5 million worldwide in 2040. Reyes Calzada observed:

Thanks to advances in the research and development of innovative treatments, the survival rate continues to rise and mortality has fallen globally by 18% since 1990. Spain has a unique healthcare ecosystem, with outstanding hospitals, dedicated health professionals, excellent researchers and highly prestigious universities. It is one of the countries that attracts the most clinical research, as measured by the number of active clinical trials in early phases.

One of the distinguishing features of Novartis was the presence of NTO’s seven drug manufacturing plants, which exported 90% of their production. In 2019, the two plants in Barcelona were outsourced to the Swiss company Siegfried,⁵ a third-party manufacturer.⁶ The sales force were specialists in their particular business unit (Pharmaceuticals and Oncology), numbering 1200 professionals across the various sales teams. In February 2020, at the height of the coronavirus (COVID-19) crisis, Novartis announced a collective dismissal procedure which meant that 92 employees were to lose their jobs, principally staff selling drugs for the treatment of respiratory illness. “This measure was taken due to the strategic intent to transform Novartis into a leader in innovative medicine adapting its portfolio to the patient”—according to one Novartis executive

Leading the transformation in Spain

José Marcilla led a process of reflection with his team about the current and future needs of the sector, the clients, the new channels that could be used, the new strategic alliances to be built and the potential of new technologies to engage in the cultural transformation Novartis was promoting. The objectives were (1) to increase market penetration in Spain; (2) to improve talent engagement; and (3) “don’t do that alone.” As Marcilla stated:

To reimagine medicine, the important thing was to translate this entrepreneurial vision into something tangible for a healthcare ecosystem like the one in Spain.

To start this transformation, Marcilla wanted to start with a very important aspect: “tone at the top,” in order to ensure the commitment of the leadership team to the cultural change he wanted to make. The first initiative was created to stress the idea of #BeInspired with an overarching objective: to bring out Brave Smiles to Cure Cancer. This slogan aimed to pay tribute to patients and relatives who were going through a very difficult time.

Then, Marcilla wanted to deploy the concepts of #BeUnbossed and #BeCurious. He formed an initial team composed of Marion Chalumeau, Director of Innovation, and Laura Linares, Head of HR at Novartis Oncology Spain.

The team stated the transformation process with #BeCurious, by presenting the first challenge inviting all Novartis employees in Spain to present ideas that may generate a distinctive value proposition based on reflection on the current and future needs of Novartis customers, future trends in the sector, new channels they could use, new strategic alliances to be forged or the potential of new technologies such as artificial intelligence, personalized medicine, and real data obtained from treatments (real-world evidence, RWE).

In order to do so, the team decided that—in order to transform the business culture around the notion of #Unboss—they would promote “agile” organization over what was the status quo in their company at the time.

Agile methodology

The transformation program began in 2019 with the launch of a voluntary internal innovation call for ideas. Then an Innovation Committee was set up to evaluate them on the basis of four criteria: “the degree of alignment with the strategic pillars of Novartis, the level of impact expected for the end user, the extent to which new technologies were implemented, and the degree of scalability,” Chalumeau explained.

Laura Linares recalled that “this initiative had a lot of internal traction.” The initiative was a resounding success. In March 2020, 53 ideas had been received, with 70% of these proposals from the teams with most contact with clients (pharmaceutical sales representatives). This first challenge gave rise to 15 disruptive ideas, of which the leadership team selected three to pursue: Click2Buy, Science App to you, and Rubik (see Figure 1).

Figure 1.

The three ideas from the first challenge.

To develop these ideas, the leadership team identified 18 intrapreneurs, people “we thought had the ability to accelerate the digital transformation we were looking for and at the same time connect with our purpose,” added Chalumeau. Along with the leaders of the company, these corporate “innovation hackers” were the pioneers in joining our transformation process. The fundamental unit in Novartis agile organization in Spain was the cell: self-steering, autonomous teams responsible end-to-end for their own specific purpose. Linares commented that

The key issue was to build an unboss culture. This means that every employee had the chance to create and think as an entrepreneur. We really believed in building a learning organization. In order to do so, we created cells to tackle the challenges. People coming from different fields (sales, operations, compliance, technology) had to define a challenge and go for it.

A key question was to define the size of each cell. Finally, the leading team defined that each cell was based on 4–6 people, multi-departmental, “with an organic focus,” and it would have its own resources with which to develop the projects. According to Chalumeau,

Cells cannot be too small or too large. If they are too large, the required alignment is in jeopardy. If the cell is too small in size, then they normally need other cells to help them realize their purpose, which again creates dependencies and therefore more alignment efforts. All that could create inefficiencies, which we wanted to avoid.

Within each cell, product ownership was assigned to one cell member, the product owner, who oversaw the cell’s work and took responsibility for its outcomes, but this did not involve any hierarchical responsibilities. Chalumeau explained:

The product owner is not a boss. We wanted to boost the “unboss culture,” so we needed to clarify that a product owner was not a defined function in an organizational chart. The product owner was an innovation role. Roles can be replaced in time. But the product owners represented the team when discussing priorities.

The ATOMIK program (2020)

In 2020, Novartis Spain launched the ATOMIK program, a company-wide digital transformation program to accompany teams in their training in new technologies. “We created a virtual internal training space to learn about the latest trends in innovation and the most important meetings in Spain on new technologies and business models,” added Chalumeau.

The leading team also launched the monthly ATOMIK Tech Challenge, a challenge to learn about a certain subject such as blockchain or robotics through different materials (e.g., podcasts). This space has had a lot of internal drive and has become a crowdsourcing space, where employees share content of interest, doubts and new ideas to keep learning. Marcilla commented:

The ATOMIK program began with the launch of a voluntary internal innovation call for ideas that we called Atomikall, with the aim of collecting ideas that would allow us to create value from a differential point of view in our sector.

Laura Linares recalled that “this initiative had a lot of internal traction.” The initiative was a resounding success, with 53 ideas received, and 70% of these proposals from the teams with most contact with clients (pharmaceutical sales representatives). In order to select the ones that made most sense among these 53 ideas, “we set up an Innovation Committee and asked each member to rate them based on four criteria: the degree of alignment with Novartis’ strategic priorities, the level of impact expected for the end user, the degree of incorporation of new technologies, and the degree of scalability,” according to Chalumeau. Finally, six ideas were selected, of which we asked all our employees to vote for the three that they considered most viable, as shown in Figure 2.

Figure 2.

ATOMIK cells.

Cell innovation dynamics

Dual organization: Exploration versus exploitation

The cell organization structure was combined with the traditional multinational structure in Spain. Marcilla declared:

Therefore we created our dual organizational model whereby, on the one hand, our collaborators continued with their traditional roles—marketing, sales, human resources, etc.—but on the other hand, they devoted a percentage of their time to these cells which develop new ideas or have the potential to identify new business models.

Cells were built around different disciplines, areas of expertise, and backgrounds. Linares said, “One of the core changes of this new organization is the cooperation between sales representatives, medical experts and customer journey experts, who work together in one cell.”

Another key change was to overcome the silos approach. “But combining the cell structure towards new ideas and innovation with the day-to-day jobs was challenging,” Linares stated. For instance, a cell could make progress, but at the same time, sales representatives had to achieve their sales objectives, “and in some cases, this created some confusion in our people,” Marcilla added. With this dual approach the people working in cells needed to combine their role in the cell and also perform with the organizational incentives.

Ideally a cell could present an outcome and stop the innovation process as soon as they were sure enough that the outcome might be the best option that had been identified with the time and resources provided to the cell. Chalumeau added:

However, in practice, this strategy proved to be pretty difficult to achieve. Firstly, if the idea seems interesting, there are always limitations that still have to be outlined. We found that defining a prototype or a “minimum viable product” required more time than expected because there is a natural decline in enthusiasm and also the prototype is very much dependent on the particular problem we are dealing with. Moreover, in some cases this decline affected the cell commitment as well as the tight agenda employees have to achieve their goals and incentives.

Alignment versus autonomy

A continuous challenge for Novartis Spain was the balance between autonomy and alignment in tackling the goals and objectives that cells defined. “Sometimes one team does not feel aligned enough, or you think they are not aligned,” recalled Chalumeau, “so in some cases we needed to help cells to improve, but carefully since we did not want the cell to see that as an intrusion into their autonomy.” Marcilla knew that too much autonomy may become anarchy, so Novartis created a steering committee to check outcomes, Laura Linares recalls. The cells had ideation and experimentation sessions every two or 3 weeks and, according to Chalumeau,

All that had been learned was shared and the work to be done up to the following sprint was planned. Moreover, daily meetings of 15 minutes were held to keep people up to date, explain how the project was progressing and talk about the obstacles encountered, so that with the help of everyone these could be overcome as quickly as possible.

For each cell,

We decided that, besides the product owner, there should be a member of the Oncology Leadership Team (OLT) who could guide or support the cell whenever necessary. Another benefit for the members of the OLT who acquired this role was that it gave them the opportunity to become familiar with and develop talent outside their own department, fostering collaboration and innovation.

The innovation process was structured in three stages. As Chalumeau went on to explain,

At each stage, a presentation was made to an Innovation Committee—composed of the OLT, a member of the Purchasing department and a member of the IT department—which would decide whether the cell should continue to develop and receive funding and move to the next stage, or whether this was the moment to dismantle it.

Management of innovation: Agile decision-making

The aim of the ATOMIK program was, according to Marcilla,

To foster the development of projects with a high degree of innovation, promote the use of disruptive technologies and explore new business models. Therefore, we provided a suitable framework for the purpose, because innovating is a long, sometimes even frustrating, process in which projects are exposed to a high degree of uncertainty.

As a result, the Innovation Committee created a process to select the best ideas. On some occasions, the Committee presented suggestions to adjust or change some of the ideas presented by employees. According to Linares,

The aim is for the customer or user, whether a patient, doctor or public administration, to be genuinely at the center of all projects and for us to be able to discard any ideas that are not really useful to them.

In order to do so, a three-phase methodology was designed based on (1) Ideation, (2) Experimentation, and (3) Scale-up.

Ideation phase

In this phase, the leadership team collected disruptive ideas within the company to improve the care of cancer patients. “It is important to note that the ideas can be synchronous, through the annual campaign for all employees to submit their ideas (Atomikall),” according to Chalumeau, “in which case the cells started the acceleration process at the same time, or asynchronous, i.e., a cell can start at any time during the year whenever a need has been detected or an employee has had an idea.”

Experimentation phase

In this second phase, the objective was to find the problem-solution fit. Each cell conducted interviews, surveys or different types of tests to validate some of the most critical hypotheses of its ideas. The suitability of the problem-solution binomial could be quantified in the following:

• Adjustments in the problem: understanding it better or discovering another problem that was worth solving before the initial one.

• Adjustments in the customer segment: certain customer segments originally targeted “did not have the same perception of the problem as we did,” according to Chalumeau.

The cell’s evolution in solving the problem-solution binomial was rated in three to 6 months. If the idea did not fit the criteria set by the Innovation Committee, then the idea was discarded, and the cell’s work discontinued. This criterion helped cells “to make quick and agile decisions, while also avoiding confirmation bias,” according to Chalumeau, who added that

At the second stage of the innovation process, efforts were made to find the product-market fit, that is to say, the cell already had a solution that had been tested and validated by the first clients. The third stage was the scaling stage, exploring the growth mechanisms of the project. Experiments and tests were performed to identify the business and growth model.

In the second stage of this second phase, for those cells that had passed the first stage, the objective was to find the product-market fit: the cell already had a solution tested and validated by the first customers or users (“early adopters”) in a pilot test or with a minimum viable product (MVP) sized to validate the viability of the product. For this purpose, a table was created with various criteria:

• Magnitude of the opportunity (total addressable market, or TAM);

• Degree of satisfaction with the product, cost of distribution, or magnitude of the opportunity;

• Adjustments in the solution, changing the solution or its technology based on the evidence of customer interest;

• The basis of the importance of the problem and the need; estimation of the effort and the investment that the customer or user needed to make to solve the problem;

• Substitution or complementarity: maturity of the idea in relation to existing current solutions in the market (existing solutions and competition).

The cell quantified each of these parameters, and if after 12–18 months, the value in the table did not fulfill the criteria to continue, the MVP or prototype was discarded. According to Marcilla,

One of the most important cultural changes in our company was to accept that discarding a project was not a bad result. On the contrary, it is a success in terms of savings generated for the company and resources freed up to be distributed among initiatives with a higher probability of success.

Scale-up phase

In this phase, the product-market fit had already been validated with “early adopters” who were using the product or service, either in a pilot version or simply with the first customers. Then the mechanisms for expanding the project to more customers were tested. Experiments and tests were conducted to identify the optimal growth model. It could be

• Addressable market: (1) core markets, those that were closest to Novartis’ existing business; (2) adjacent markets, service projects that added value to Novartis’ drugs; and (3) transformational projects that required market creation.

• Payment models: (1) a paid growth model, where the sales network, marketing campaigns, and other positioning actions were the drivers of growth; and (2) an adhesion growth model, where the growth was based on business model innovation due to the number of customers that could shift to a subscription model.

• Network effects: where growth is based on recommendation between customers.

However, according to Chalumeau: “it is important to note that growth in the scale-up phase is a matter of finding the balance between the different growth drivers and discovering which are the optimal actions to take to achieve the greatest growth in terms of customers and users.”

Innovation outcomes

Some of the cells Novartis decided to develop after 2019 and 2020 were as follows:

Telemedicine cell

This cell was created to serve the strategic goal of “a commitment to data and digitization.” The aim was to develop telemedicine solutions for cancer and hematology patients. The idea arose before COVID-19, when we realized that many chronic patients had to travel to hospitals far from their homes for a simple check-up, which required a great effort and caused discomfort. Novartis staff knew that hospitals were looking into new healthcare strategies, as Chalumeau explained:

Telemedicine is very important to guarantee that the service is accessible and universal particularly in rural areas, and with elderly and chronic patients. Furthermore, these apps can improve quality of life, alleviate the loneliness felt by people in the final years of their lives and reduce psychosocial problems.

The health professionals did not see the clear benefit of this technology in 2019 since it meant extra complexity when it came to managing virtual and physical visits. They began to explore other technology platforms but, with the arrival of COVID-19, telemedicine became a necessity. The team in this cell quickly adapted to the circumstances of the pandemic and then worked with the physicians themselves to validate their new needs. Finally, a pilot project for the use of a telemedicine platform was launched with a hospital in Madrid.

Science App to you

This cell had to discard its original idea after 3 weeks of conducting more than 20 interviews with customers because the need was already covered. However, the team identified the need to improve awareness of onco-hematological diseases and started the idea of LymphocyteGO, a game that combines lymphocyte hunting with awareness campaigns and fundraising for research projects.

Aviro cell

The idea of Aviro was born with the aim of providing patients with personalized information about their diagnostic process, therapeutic regimen, and hospital center, among others, based on their specific needs, as well as providing them with a place where they can have all this information organized and easily accessible. After more than 40 insights from stakeholders (patients, nurses, psychologists, oncologists, etc.), the cell identified the key functionalities for the patients and the oncologists and decided to focus their MVP on one functionality: a chatbot to answer the most common questions around metastatic breast cancer.

Click2Buy

The Click2Buy cell discarded its first idea after several interviews with the customer, in which it was discovered that something else was required to improve the daily life of the hospital pharmacist: training. As a result, Click4Growth, an online training platform for pharmacists, was created. Chalumeau added “in less than two weeks the team developed internally a mockup of the solution with different content options to be tested with end users, and compared it with other solutions available in the market.”

Cell for breast cancer

This cell was created to serve the strategic goal of preparing the launch of a product for metastatic breast cancer. “We wanted to test whether this new working methodology could optimize the way in which we launched products onto the market. This experiment was about changing the traditional way in which we launched products by departments (marketing, medicine, etc.), replacing this with another approach followed by a multidisciplinary team without roles or hierarchies,” added Calzada. Working in continuous co-creation with customers led the cell involved to develop the so-called HOPE study promoted by the academic clinical-translational cancer research group SOLTI.⁷ The HOPE study, through training workshops, empowers breast cancer patients and offers them the possibility of sequencing their own tumor and performing a liquid blood biopsy by proactively requesting their participation through an app.

Hyedra cell

This cell employed speech analytics to develop an artificial intelligence system capable of translating and recording the conversation between a doctor and his/her patient during a consultation. This offered several advantages for both the doctor (simultaneous transcription of the consultation into the medical history) and the patient (annotation of important information for the patient or creation of personalized alerts).

Novartis Cancer Startup Program: Toward an open ecosystem

Another basic factor in putting the strategic change at Novartis into operation was to recognize that not all the capabilities were inside the company. This was why Marcilla promoted an ecosystem of partners who would share the proposition and values of Novartis. As Marcilla observed:

We wanted to escape from the traditional ecosystem concept which large corporations had developed in the past, placing the largest company in the center, while the others revolved around it, like planets around the sun. We believe in a genuine ecosystem formed by startups, foundations and companies from both inside and outside the pharmaceutical sector, in which there is co-creation of value between the partners. Looking at the evolution of the startup ecosystem, which is particularly active in Spain, we saw the need to position Novartis Oncology Spain inside the digital ecosystem and generate alliances with these new players in the health sector.

Thus, the Novartis Cancer Startup Program (NCSP) was created in collaboration with the Conector startup accelerator. NCSP was the first startup acceleration program in the digital health sector focused on care of patients with cancer. The aim was to dynamize the entrepreneurial ecosystem to develop innovative solutions that would improve the quality of life of people with cancer, from prevention and diagnosis through to treatment. In the words of Carlos Blanco, founder of Conector,

The digital health sector is booming, so there are many opportunities for both large companies and small businesses and entrepreneurs. The key will be for everyone to be able to understand each other in order to work together, increase their respective capabilities, and drive innovation for the benefit of the patient.

Blanco also added,

Many startups fail before they get funding, due to inexperience of the founders or because they invest too much time in reaching the perfect solution and use up their resources. With programs such as the Novartis Cancer Startup Program, by Novartis and Conector, startups can reduce the number of mistakes made in the initial stage, managing to expand their success options by 2.6%, compared to the market average.

In April 2020, a selection was made of six startups that offered digital solutions for improving the quality of life of cancer patients. Previously, an appeal had been made to the entrepreneurial ecosystem, and more than 100 startups from various countries had presented their credentials. José Marcilla, commented:

We are convinced that the combination of innovation and collaboration is essential if we are to continue to improve the quality of life of people with cancer, and therefore we are committed to launching initiatives that go beyond the development of innovative therapies. By working together with startups and other players in the digital environment, we will be able to exploit all the potential that innovation and the new technologies have to offer, and in this way make further progress in our mission to reimagine medicine.⁸

From the startups that responded, the Digital team at Novartis Oncology Spain made an initial selection of 21 that were considered to have the greatest impact. Subsequently, an evaluation committee composed of staff from Novartis and Conector was created to whittle the 21 companies down to six:

• RheoDx: An in vitro diagnostic device that analyses the elastic properties of red blood cells, making it possible to diagnose alterations in these cells. It has a fixed part and a disposable part.

• Biomedica Molecular Medicine: A diagnostic spinoff from Hospital de la Paz, which develops and commercializes cancer detection tests.

• OncoSalmah: A virtual assistant that accompanies you throughout the procedure, identifying symptoms, helping with decision-making, and facilitating access to professionals.

• Trillío: A medical device connected to a smartphone/tablet, which can set reminders for taking medication, thereby improving adherence and helping careers monitor patients.

• Avívate: A digital school to which the patient subscribes. The goal is the holistic improvement of the patient throughout the process of treatment and illness.

• Axess4you: A startup which is transforming the approach toward access to the drug and medical device market, with a platform that includes artificial intelligence.

The selection criteria were based on the profile of the entrepreneurial team, market potential, the position of the company or the product at that time, the degree of innovation and number of competitors, scalability, and alignment with the values and mission of Novartis. Marcilla recalls:

In April 2020, the six startups selected took part in a virtual competition in which more than 170 partners were invited to connect and decide on the two companies that would subsequently be accelerated. Two key figures from the digital ecosystem, Óscar Sala from the Collider program and César Morcillo from Sanitas, took part in this stage of the evaluation process.

In the selection of the winners, account was taken of criteria such as the suitability of the project to the main focus of the program, its economic viability, the capacity of the team to carry it through, and to what extent the continuity of the project could be guaranteed. Finally, the winning startups selected on the basis of their innovative potential were Trillío (Exhibit 7) and Avívate.

Lessons learned and future challenges

Chalumeau said that using agile methods and innovation cells, “We started to break down the silos and promoted new conversations with our customers in order to develop new ideas to engage medical staff and hospitals. We also learned that innovation cells generated more engagement in our employees to be key characters of the Novartis transformation.”

After 2020 Novartis Oncology Spain grew over and above the hospital market average (17.5% vs. 10.6%) while increasing its market share from 3.5% to 3.7%. In order to measure the degree of satisfaction of Novartis employees, every 3 months a survey measuring variables such as sense of belonging, trust, responsibility, commitment and collaboration is conducted. The results of this survey increased from 76/100 points in 2019 to 83/100 points in 2020, being above the company’s global average. Marcilla commented:

By the end of 2020, we managed to generate a flow of innovative ideas with more than 60 digital projects, positioning us as an innovation generator for Novartis at a global level. More than half of these ideas are transformational. Of the transformational projects, 60% are in an early consumer discovery phase and 40% are in an implementation phase (pilots). The remainder are other ideas such as omni-channel projects or core projects (directly related to the core business) such as virtual meetings.

After the COVID crisis, Marcilla and his team were evaluating to continue these initiatives due to the many learnings acquired (Exhibit 8). Marcilla commented:

The fact that some initiatives did not prosper should not be considered a failure, but part of the normal process of innovation. In reality, they may be seen as a success in terms of savings for the organization and resources freed up for assignation to initiatives with a greater probability of success.

Marcilla also realized that with the innovation cells “the impact you make is much bigger since you involve more people in the process, so everyone feels committed to the transformation Novartis is experiencing.” However, there were things to improve. According to Chalumeau, “in some cases we experienced tensions between day-to-day obligations and the innovation process; we are also concerned about the number of interactions to reach an MVP; and finally, we need to manage frustration when an idea does not fly.”

Marcilla and his team had several challenges ahead. For example, can they continue with a new startup acceleration process and invest in some of the startups? Which initiatives and cells should be continued and which should be discarded? How could the innovation process be improved? And finally, how could they make the ATOMIK program scalable so that other countries would see it as a model of innovation? José Marcilla thought once again about the challenge of redefining the role of Novartis Oncology in a healthcare ecosystem like the one in Spain. But he also thought that it was a challenge he faced as a leader on the path to fulfilling a dream: to 1 day cure cancer.

Exhibit 1: Vasant Narasimhan (MD) in Barcelona Tech City (2019

Vasant Narasimhan (MD) and José Marcilla in Barcelona Tech City (2019)

Exhibit 2: Novartis business unit sales (2014–2020)

Source: Novartis Annual Report, 2020

Exhibit 3: Novartis financials

Source: Novartis annual report, 2021

Exhibit 4: Novartis’ global organizational structure

Source: Novartis annual report, 2021

Exhibit 5: Corporate units

Global Drug Development (GDD) was responsible for monitoring drug development activities. GDD had some 11,000 full-time employees worldwide, including centralized global departments such as Regulatory Affairs and Global Development Operations. In 2019, Novartis had 16 technology platforms for the development of therapies and a powerful pipeline of 114 new treatments in 2020.

Novartis Technical Operations (NTO) was responsible for centralized management of the manufacturing and supply chain operations of the Innovative Medicines and Sandoz divisions. NTO had 60 centers worldwide and more than 60,000 employees. In 2019, the decision was made to cut the workforce by 12,000, closing some plants and outsourcing the work of others.

Novartis Business Services (NBS) had more than 10,000 employees in more than 30 countries and was divided into six services areas: financial reporting and accounting operations; human resources; information technology; procurement; product lifecycle services; and real estate and facility management. NBS provides all the divisions and business units with integrated solutions. It was due to embark on some extensive restructuring in 2019, with the loss of some 700 jobs.

Novartis Corporate Affairs (NCA) was responsible for relations with the various government structures for approval of drugs, price setting and legal advice.

The Novartis Institute of Biomedical Research (NIBR) was the innovation engine of Novartis, with a total of 5600 scientists, doctors and professionals based in the USA, Switzerland and China. The NIBR centralized the Artemis Project with a global artificial intelligence initiative and big data. Artemis was initially focusing on the following projects: (1) creating personalized therapies for macular degeneration, which causes blindness; (2) improving the manufacturing of gene and cell therapies with AI, starting with acute lymphoblastic leukemia; and (3) using machine learning to identify molecules that may be used to treat diseases.⁹

The Center for Data Operations (NERVE): In April 2018, Novartis opened a new digitally enabled nerve center on its Basel campus (called NERVE), which enables the company to monitor its worldwide clinical trials—some 500—in real time, a first for the industry (see Exhibit xx). The NERVE center used predictive algorithms, which could pick out likely problems in advance: 12 months, 18 months, 20 months down the road. The project had been a major undertaking, not only in the process of “cleaning” and linking all the disparate datasets into one “data lake” but also bringing different internal teams together and breaking away from established practices.¹⁰

Exhibit 6: Novartis’ five pillars for cultural change

Novartis’ mission is to reimagine medicine to improve and prolong people’s lives. To achieve this mission, CEO Narasimhan set five strategic priorities:

1. Unleash the power of our people

“We are transforming our culture to ensure people can fully apply their talent and energy. We’re creating an organization where people are inspired, curious and unbossed.”

2. Deliver transformative innovation

“In our pursuit of transformative treatments, we challenge medical paradigms and explore possibilities to cure disease, intervene earlier in chronic illnesses, and find ways to dramatically improve quality of life.”

3. Embrace operational excellence

“We are rethinking how we work, embracing agile teams and building better productivity into our company to free resources that we can invest in innovation and help boost returns.”

4. Go big on data and digital

“We aim to spark a digital revolution at Novartis, embracing digital technologies, advanced analytics and artificial intelligence to help drive innovation and improve efficiency.”

5. Build trust with society

“We strive to build trust with society through our efforts to operate with high values and integrity, and to find new ways to expand patients’ access to our treatments.”

Exhibit 7: Trillío

A connected medication reminder for seniors and chronic patients. It reminds the patient to take the right medicine at the right time, quickly and easily. If a reminder is not heeded, the emergency contact is alerted in real time. All configuration is done remotely by the caregiver with their smartphone, tablet or computer.

When a prescription runs out, the patient can send a refill request for home delivery with just one click. TRILLIO is equipped with an embedded SIM card and is always synchronized and connected with the caregiver. Thanks to the Bluetooth module, TRILLIO can connect to third-party measurement devices and send readings to the caregiver.

• e-Health platform for caregiver and family.

• Manages medication plans and keeps TRILLIO devices synchronized.

• Patient’s online adherence dashboard with medication history and log.

• Sends SMS and email alerts to the emergency contact whenever a medication is not taken or a potential health problem is detected.

• Predictive analytics: TRILLIO analytics can accurately identify potential health problems in advance. Caregivers are able to take effective and timely action to prevent dramatic consequences for their patients.

• Open platform. Easy integration with third-party platforms for a total e-health and prevention experience.

Source: www.trillio.com, June 2021

Exhibit 8: Lessons learned

The importance of pivoting: modifying an idea is not a step backward. Any suggestion or solution is welcome if its intention is to improve the product.

Minimum viable products (MVPs) can be generated in a few weeks with few resources: there are very simple tools that allow any team to create a specific product to meet the minimum requirements for testing the idea.

Being capable of discarding ideas quickly without wasting time and money: the aim is not to develop the most disruptive idea, but the one that best meets a customer need.

An example of this was the Rubik cell idea, which was discarded in less than 2 months after several interviews and workshops with internal users. It was confirmed that although the need did actually exist, the idea was not to create a new solution, but to optimize the ones that already existed internally, with the consequent saving of resources. 4.

Not falling in love with the initial idea but looking for fresh inspiration: although an idea may seem very innovative at the outset, if it does not solve a relevant need, we must be brave enough to discard it as soon as possible and focus our efforts on other ideas that provide greater value to the customer. We learned that we must fall in love with the problem, not the solution.

The importance of listening to the customer and co-creating with them to develop products: pursuing customer satisfaction and periodically informing them of the status of the project.

Adapting to changing circumstances: projects do not usually end the same way they started. It is essential for those implementing them to be able to adapt to changing circumstances.

Knowing how to identify the right partner: in many cases, the solution we are looking for already exists, but it is a question of finding it by forging alliances with new players.

Reconciling your traditional role with that of the cell. Our dual organization system requires time and commitment, and it is difficult to find a balance between the traditional role and the cell role.

10.

Enjoying yourself. In the cells, the teams have had the chance to get to know each other better by working with different people, to learn new things without the pressure of having to deliver a result and to enjoy what they were doing. They have established codes of trust that they have then transferred to the traditional organization, improving collaboration between departments, and ultimately obtaining better results.

Novartis oncology Spain: Agile innovation (B): The real-world evidence (RWE) cell

May 2022

Barcelona, February 2022

José Marcilla, Reyes Calzada and Marion Chalomeau were preparing a meeting with Dr Felip at the Consortium for Translational Research and Medicine (from research to medical practice) in Oncology in Vall d’Hebron Hospital in Barcelona. They were thinking of including this institute in a new innovation cell.

In the past, pharma companies were structured to achieve efficiency in R&D, “produce pills” and sell them globally. But the change promoted by Narasimhan required Novartis to implement advanced therapy platforms, digital technologies and data science,¹¹ in other words, the aim being to transform Novartis from a conventional pharma business into a “data science company.”¹² That vision explained the global investments in data and artificial intelligence technologies that led to important investments such as the NERVE center, which monitored the 500 test trials worldwide and alliances with technology firms such as Microsoft and Amazon.

However, although data management was centralized, data came from clinical tests of new treatments. For Novartis, the two leading countries in data generation in new treatments were the USA and Spain. According to Calzada, “in 2019 alone, 178 clinical trials were conducted in Spain, with the participation of 108 centers and more than 1000 patients. This represents 50% of clinical tests conducted worldwide.”

VHIO

In 2018, Novartis Oncology and the Vall d’Hebron Institute of Oncology (VHIO) started to cooperate in drug and new treatment discovery. The collaboration between Novartis and leading medical centers was critical in that matter, since, according to Dr Felip, Head of the Thoracic Cancer Unit at VHIO,

the discovery of a treatment takes place in phases (Exhibit 2). Each treatment starts with an idea that is incubated, refined and analyzed, first in the laboratory and subsequently in clinical practice, over a period of many years. Our researchers anticipate promising ideas from a variety of internal and external sources, focusing on projects with the potential to improve or prolong patients’ lives. This approach in the discovery of drugs requires close collaboration with pharma industries in order to develop disruptive therapies.

Before a new treatment was approved for use on humans, an initial safety and efficacy profile of the candidate drug had to be defined (Exhibit 2). Dr Felip observed:

During this phase, scientists can use artificial intelligence models and laboratory tests to evaluate the safety of this candidate. These tests determine the drug’s degree of absorption, its distribution in the organism, how it breaks down or metabolizes, and the speed and method of elimination. It must be remembered that we increasingly need personalized treatments for each patient depending on different parameters, one of these being the genetic base.

VHIO brought the candidate drug into the clinic for proof-of-concept trials, through which the basic efficacy of the drug can be quickly tested and basic information gathered about its effectiveness, safety and tolerance, and whether the guidelines established by the health authorities for early clinical tests are met. This is called “applied and translational research in oncology.”

Real-world evidence

In the pharma industry, Real world evidence is clinical evidence on a medical product's safety and efficacy that is derived from analysis of real wold data resulting from routine healthcare delivery. There are several sources of RWD, including electronic health records, registries, patient-generated data ... and from other sources such as digital health technologies. Data analysis can be done in order to improve clinical processes and treatment adherence, and to generate ideas about how to take decisions based on profiles of interest in the history of a patient. Calzada added,

Developing new drugs has become as much an AI and data science problem as it is a biology and chemistry problem. Therefore, we expect a clear impact in terms of lives saved worldwide if we can discover new medicines faster. In this context, it is important to remember that Spain boasts the largest database of clinical test data.

For this purpose, it was necessary to gather data from various sources (big data¹³) to compile information. Chalomeau added,

Clinical trials, systematic reviews of clinical analyses, administrative databases, population surveys, observational studies, experiments, expert opinions, as well as lifestyles, data on which could be obtained from monitoring equipment, wearables, equipment installed in homes, social media and mobile activity, among other sources. Therefore, it was necessary to develop new forms of digital relationships with the hospital environment and with the patient.

The Real-world evidence (RWE) initiatives added transparency and efficiency to the approval process. Furthermore, once the drug is in the market, “it is necessary to continue watching out for adverse effects and to inform the regulatory authorities of these,” Calzada said, “in addition to monitoring its life cycle—including Phase 4 clinical trials—in order to explore and add new indications or improve the existing formulations of the drug.” According to Marcilla,

If RWE is wanted before a drug is commercialized, it is advisable to have a good team and expert scientific advice to define the most important points in clinical terms, and gather and analyze this data in an appropriate methodical manner.

Reyes Calzada thought it was interesting to explore the possibilities offered by digital technology to monitor patients, and added:

In our everyday work we aim to establish relationships of trust with medical teams that treat serious illnesses, and as technology provides value in these relationships and improves the life of the patient, our position as responsible doctors is to promote those solutions that enable us to gain intimacy in these relationships.

CAR-T therapies

VHIO had conducted tests on patients with a new immunocellular therapy called CAR-T to cure a specific type of cancer. As Dr Felip explained,

CAR-T technology¹⁴ represents a very important step forward in personalized therapies. It consists in extracting a blood sample from the patient, and then treating and reprogramming some of their blood cells to stimulate the immune system with the aim of curing the illness.

What we expect from the pharmaceutical industry is greater collaboration once the pre-clinical phase is over; in other words, once the treatment can be commercialized, we believe there is considerable room for improvement in the time that elapses between its design and its general availability in hospitals as well as producing therapies at reasonable costs.

In 2021, another leading hospital in Spain disrupted the status quo when the Spanish Agency of Medicines and Medical Devices (AEMPS) approved another CAR-T treatment¹⁵—developed by Hospital Clínic—as an advanced therapy drug of non-industrial production for its use in patients over 25 years of age with lymphoblastic leukemia that was resistant to conventional treatments. It was the first CAR-T developed entirely in Europe to be approved by a regulatory agency and, from a competitive perspective, a real threat or Novartis’ strong positioning in these types of treatments.

Decisions

The reason to create a new innovation cell with VHIO was the answer proposed by Novartis management to the interest shown by The RWE Cell in collaborating with Novartis in the creation of a project aimed at improving the help provided in phases after the launch of drugs. The question is how to generate synergies between the initiatives in Spain and maybe global innovation initiatives.

Consequently, the Spanish Novartis team invited VHIO to become part of a joint venture and create an innovation cell with the intention of scaling up and with time collaborating at a global level. There were many issues to tackle. For the Spanish Novartis team, this was a far-reaching strategic move and the first challenge was to translate the importance of this movement to a global level.

Exhibit 1: Global data projects

The Artemis Project and NERVE

To enable Novartis to evolve into a focused, personalized, and innovative medicines company, the firm needed to develop new capabilities incorporating digital platforms and data science in R&D and operations and creating new alliances. According to Narasimhan:

Artificial intelligence (AI) and machine-learning approaches are raising expectations that therapy discovery and development may not only be more innovative, but also more time- and cost-effective.

The machine-learning algorithms needed data. One person generated around 1100 TB in their lifetime: 60% came from their behavior and their risk practices (accessible through sensors, trackers, and other technologies that monitor their lifestyle); 30% from their genome (accessible through biomedical research and innovation), and the remaining 10% from their medical history.¹⁶

In order to achieve this, Novartis decided to create the Artemis Project and centralized it in The Novartis Institute of Biomedical Research (NIBR), in Cambridge (MA), with a total of 5600 scientists, doctors and professionals based in the USA, Switzerland and China. The Artemis Project was focusing on (1) creating personalized therapies; (2) improving the manufacturing of gene and cell therapies with AI; and (3) using machine learning to identify molecules that may be used to treat diseases.¹⁷ In April 2018, Novartis opened a new digitally enabled nerve center on its Basel campus (called NERVE ), which enabled the company to monitor its worldwide clinical trials—some 500—in real time, a first for the industry using predictive algorithms, which could pick out likely problems in advance: 12 months, 18 months, 20 months down the road.¹⁸

Alliances with big tech platforms

In 2019, Novartis announced alliances with Microsoft, Amazon and the Chinese company Tencent. The purpose of the alliance with Microsoft was to create an AI lab in order to (1) generate new models for the drug discovery and development process and (2) empower employees by bringing new tools to their desktop to help to improve efficiency in manufacturing, operations and finance. The aim of the alliance with Amazon was to deploy Amazon’s web services and cloud technologies to transform Novartis’ manufacturing process by unifying access to all information and enabling Novartis to make quick and informed critical decisions.

Finally, the purpose of the alliance with Tencent was to launch an online long-term disease management platform for heart patients. The platform was called “AI”—meaning “care for the heart” in Chinese—and covered daily health indicator monitoring and health condition assessment through voice and image recognition. It was launched in WeChat as a mini-program.

This change toward innovative medicine required a cultural transformation based on five pillars. Narasimhan stressed the change from a hierarchical to a high-performance-oriented culture since Narasimhan believed that “people are not motivated by carrots and sticks. They are motivated by purpose, autonomy and the opportunity to improve themselves,”¹⁹ and “being a good leader is not about bossing people around but instead giving them more power—and making them happy.”²⁰ The question was how this change was going to be implemented in the different countries.

Exhibit 2: Phases in the launch of a new drug

Preclinical phases	Confirmation and drug launch phases			Monitoring phase
Proof of concept	Phase 1	Phase 2	Phase 3	Monitoring phase
⁃ Identification of a protein associated with a human disease (“target”) ⁃ High-performance selection to find the chemical compound or antibody that binds to the target or impacts it so that it modifies the disease ⁃ Use of computer models and laboratory tests to evaluate the safety of this candidate: decomposition of the medication candidate and form of metabolization ⁃ Basic information gathered about pharmacokinetics, safety and tolerance, and compliance with the guidelines established by the health authorities for early clinical tests ⁃ Patent	⁃ First clinical trials of a new compound in a small group of volunteers ⁃ Study of the safety profile of the drug, including the safe dose range ⁃ Studies of absorption, distribution, metabolization and excretion, as well as the duration of its action	⁃ The drug is tested in a larger group of patients with the disease studied ⁃ Study to evaluate safety and efficacy ⁃ Establishment of appropriate therapeutic doses	⁃ Large-scale clinical trials with several hundreds to thousands of patients ⁃ Specific indications for regulatory approval ⁃ Comparison with a previous or standard treatment to evaluate the risk-benefit ratio of the new medication	⁃ Monitoring of patients ⁃ Checking of treatment efficacy ⁃ Report on adverse effects not detected in previous phases ⁃ Comparison with other treatments ⁃ Ongoing safety studies

Exhibit 3: Real-world evidence market

Real-world evidence solutions, by application

• Drug development and approvals

о Oncology

о Cardiovascular disease

о Neurology

о Immunology

о Other therapeutic areas: infectious diseases, musculoskeletal disorders, dermatological diseases, and respiratory diseases

• Medical device development and approvals

• Market access and reimbursement/coverage decisions

• Clinical decision-making

• Other: regulatory decision-making, post-approval monitoring, and post-market device surveillance

Real-world evidence solutions, by end user

• Pharmaceutical, biotechnology, and medical device companies

• Healthcare payers

• Healthcare providers

• Other end users

Source: Novartis, 2022

Real-world evidence: Data sources

Source: McKinsey, 2020

Footnotes

Declaration of conflicting interests

The author(s) declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.

Funding

The author(s) received no financial support for the research, authorship, and/or publication of this article.

Notes

Author biographies

Javier Busquets is a Telecommunication engineer and holds a Ph.D. in Management (CBS) and MBA (ESADE). He is an Associate Professor at ESADE (URL) where he teaches Strategy in Innovation & Technology and Digital Business. He is author of several international cases internationally awarded as well as papers published Science (Scientific Reports), Entropy, Communications of ACM, Journal of Information Technology, European Journal of Information Systems, Innovations (MIT Press) and Decision Support Systems among others. He serves as Director the Master of Science Digital Business (2022–). He also manages Executive Education Programs Custom Programs. He served as Chair of the Department of Management Information Systems (2003–2011). He has an extensive professional and executive experience in the Information Technology (IT) and telecommunication industry where he served for 17 years. In 2007 and 2011, he received an IBM Faculty Award dedicated to research in Service Science and Innovation in Banking.

Silvia Ramírez-Peinado is a biologist and holds a PhD in Biomedicine (Universitat de Barcelona) and EMBA (ESADE). She is a research assistant at ESADE. As a Healthcare innovation strategist at Alira Health, she is committed to deliver accessible and value-added solutions in healthcare; building relationships and partnerships across therapeutic areas to deliver high-quality products. She also works in solutions and strategies to improve patient care (medicine and digital health) She has served as innovation manager in Novartis and Ferrer. She organized entrepreneurial programs at Biocat (BioRegion of Catalonia) and worked in scientific research in BioMed X Institiute.

Manel Peiró is Doctor in Medicine (MD) and holds a PhD in Management (ESADE). He is an associate Professor, Department of People Management and Organisation at Esade. He is currently Director of the Institute for Healthcare Management of EsadeGov and Director of the Executive Master in Healthcare Organizations Leadership (EMHOL/EMDOS). He serves as Chairman of the Board of Directors of Blood and Tissues, Vice-President of the Board of Trustees of Fundació Cemcat, member of the Board of Trustees of Multiple Sclerosis Foundation, Fundació Puigvert, Sant Andreu Salut Fundació and Fundació d'Estudis Superiors en Ciències de la Salut (FESS) (Higher Studies in Health Sciences Foundation). He is a member of the Advisory Board of Catalan Association of Health Entities and a member of the jury for the Quality Awards of Avedis Donabedian Foundation.

Marta Camacho holds a Bachelor's degree in Communication (UOC) and Executive Master in Digital Business (ESADE) She is a research assistant at ESADE. She is a program manager an TD Synnex. She is expert in digital transformation and digital innovation focus. Previously she had different positions as social media strategist and manager in entrepreneurial ventures.