One strategy that companies apply – when in position to do so – is an increase in the R&D investment (Strategy 1). In a mature industrial stage this however only leads to incremental innovation on products. Like this the established players can stretch out their time-duration of certain market leadership and can resist for a while the emerging competition of newcomers. Typical examples of this comprise: improvement of retardant release action of drug products like capsules and tablets, improvement of drug stability / shelf-time, improved coatings and surface treatments of tooth or bone implants that are promoting oseointegration. What companies shall do is to strengthen their innovation and technology departments (by adoption of modern creativity, innovation and technology management methodologies) and to focus on disruptive new product development (NPD), best achieved in spunoff sister companies (separation of budgets and decision making) or in the mode of “Open Innovation” (see also Strategy 4 below). Mature players are normally just too busy with the current operations and with incremental improvements. Their increase in R&D spending typically does not leverage and does not result in major improvement of the business / product portfolio ^{[1, 7]}.

Examples of more disruptive product innovations where Altran is assisting with incumbent product development are: tissue engineered “drug products” (incorporating e.g. growth factors or factors that modify cell repulsion and attraction), microtechnology based manufacturing of deep brain stimulation electrodes having much larger selectivity of brain tissue activation, magnetic steering of heart ablation catheters used in treatment of heart arrhythmias, and development of combination products (CPs). Both types of industries (medical device and pharmaceutical) have correctly identified combination products as NPD strategy that is quite disruptive and that can thus give them a larger innovative boost and competitive advantage over other players. Examples of CPs range from simpler prefilled or reconstitution syringes, electronic inhalers with intelligent sensing, user biofeedback, and wireless connectivity, to more disruptive ideas of cochlear implants combined with drug delivery for transdifferentiation of ganglionic hearing cells into sensory primary hair-cells and/or neuroprotective drug delivery. CPs bring two advantages to the industries: A: increased value proposition along the customer value chain (improved diagnostics, improved delivery / therapy, personalized medicine (increasing likelihood of success), improved patient compliance to name a few), and B: since the life-cycle of NDPD is much longer that the NPD of medical devices, it is much faster to integrate additional customer value proposition into CPs than into pure DPs.

Another typical way to improve internal efficiencies and reduce total cost are improvements in processes governing business operations (Strategy 2). Maturity of NPD, supply chain, manufacturing and QA processes can be described by the CMMI methodology developed by Carnegie Mellon University in Pittsburgh, USA. Maturity levels typically evolve from level 1 (no or few processes established and described) to levels 4 and 5 characterized by established KPIs, benchmarking, and continuous process improvements (optimization) that leads to improved performance (reduced cost and faster time-to-market). Efficiency in product development is improved by standardization of the process (lower variability of the process, faster lead and throughput times, lower fault and failure rates, improved information flows (clear process ownership, RACI matrix for information exchange and improved decision making), increased concurrent engineering execution of the development). Articles ^[2] and ^[3] discuss and devise ways how to reduce lead-times of NPD while still avoiding risks of design errors, redesign, and rework.

Process and quality system maturity is also linked to regulations that impose a minimum set of (essential) requirements through laws (such as US CFR, EU MDD) and that also guide the industry through international standards and recommendations (e.g. FDA guidance documents such as documents on GMP or process validation). Product developers and manufacturers need to comply with regulations that are also dynamic and evolving. Regulatory compliance is challenging for newer players (start-ups and SMEs) and protects major players up to a certain degree (barrier to entry / cost of process and quality system establishment). While smaller players and newcomers have more often compliance gaps due to lower experience and lower maturity, larger players also show gaps when the products are evolving beyond their commodity products (as in case of CPs, where pharmaceutical industry now also needs to comply with MDD regulations and vice versa). Establishing and keeping up with the basic regulatory compliance levels is already not a simple task and takes time. In case of medical device NPD, several articles were published that have studied and developed comprehensive processes and process models ^[4,5,6]. These can be used as generic reference models in the industry and can easily be adopted and customized to individual needs of each company.

For improvement of internal efficiency, timeto-market, and cost reductions, process reengineering and optimization still plays an important role (CMMI 4 and 5 levels). Altran has recently mapped and reengineered a technology transfer process for a major pharmaceutical company, and this type of internal and external consulting projects are common in mature industries. However, obtained optimizations result in incremental improvements within the same business models, where earnings are optimized due to cost reduction and increased efficiency. For more disruptive innovation, business models and business ecosystems need to undergo a major change that will bring true new customer value proposition to live. Some examples and tips for medical device and pharmaceutical companies are given in ^[9].

Coming back to the product development, what we as a NPD and technology consulting company observe in practice are certain issues (inefficient development and product quality problems) that are typically not well addressed in the industry and are occurring in spite of well established and mature processes (that have no or low levels of compliance gaps). These problems are more linked to actual NPD and arise as companies typically select one type of PDP only – and stick rigidly to it.
This leads to problems as a single PDP type is not optimal for different types of NPD / products (optimal choice depends e.g. on the disruptive or incremental nature of the product evolution). Selection and freeze of a single PDP type, thus, reduces flexibility needed for evolutionary type of product development, which is often most needed with introduction of new technologies (these problems are linked to products whose development possesses a larger risk) ^[3]. The above observations add another dimension in the process modeling / development and devises a third strategy for industry to achieve greater competitive advantage (Strategy 3).

A proposal how to address and dynamically select the right NPDP based on product technology / risk assessment is shown in Fig. 2.

Strategy 4: To be prepared for surprises with more innovative / disruptive competition, major players also need to continuously monitor technological and innovation landscapes. They need to identify incumbent technologies and products, their cost and performance dynamics ^[7], and their adoption degree. Monitoring needs to comprise R&D that is conducted at universities, research institutes, and start-ups (technology scouting). An advanced web-based IT tool for innovation and technology management (IMPA) was recently developed ^[8]. Examples of recent disruptive developments are, e.g., cell based cancer therapies or examples from synthetic biology where internal cell biology is modified / engineered in a sense that makes cells produce the desired concentrations of target drugs / molecules as a drug treatment substitute that works with internal and external control loops in-situ (covering sensing via receptors, cell signaling, and regulation of gene expression). Vision of the obsolescence of pill-taking has thus already been born, whereby drug intake will be substituted with an implantation of engineered cells providing desired system-regulation in a closed-loop fashion.