An Interview with Takeda’s Steve Schaefer – Changing Corporate Landscape – November 2018

Mark Bard: Steve, you have a lot of experience at many different levels but certainly at the strategic level of the organization. You talk about your strategic vision for commercial development, and a lot has happened over the past ten years. You worked at two companies, Lilly and Takeda, that are really at the forefront using technology to engage with an HCP audience, to engage with consumers and patients in very innovative ways. From your point of view, what are some of the biggest changes over the past decade that you’ve seen?

Steve Schaefer: It’s really interesting, right? I think we all recognize as consumers ourselves that the rate of change in the external environment is unprecedented. Take a step back and think about the companies that you prefer to do business with and those that make it easy for you to do business. I have a bank that I really like. I’m a Marine Corps veteran, and so I bank at USAA Bank. Their services are personalized. They customize themselves for me. It makes my interactions with them relatively seamless.

The customers, whether they be payers, patients, HCPs, they’re consumers as well, and they expect the same from any source of deliveries that we expect ourselves. I think the number one thing that’s really changed is, in pharma in particular, probably ten years ago even – dating myself a little bit. I remember thinking about strategic initiatives. We’d say, well, we really can’t do that. We’re a regulated industry. We’re pharma, but yet, the speed of change and the expectations of our customers changes as well.

The availability of data and algorithmic marketing has made it much easier for us to, I think, start to understand our customers, where they are on a journey, and start to customize content, and get it to them in a manner that is very much how we would prefer or want to see it as consumers ourselves. I think that rate of change will continue to grow probably exponentially, as we harness the technology that’s there and challenge ourselves to consider how we treat our customers as consumers themselves of information. How do we really challenge ourselves to understand that we can’t simply deliver a pharma experience? We have to deliver a brand experience that’s equal to the brands that they prefer to deal with, or we quickly are and will not be relevant.

MB: Let’s talk customer experience for a second. You mentioned USAA. I was a military brat as well. I have a USAA account, probably will continue to for a long time. When we think patient centricity, what does achieving that goal look like, and where does data and technology come into that in terms of tracking? This is an interesting industry. It’s not Amazon. It’s not American Airlines. It’s not insurance. It’s a very different product. How do we know that we’re getting it right on customer experience?

SS: This is where it gets really challenging depending on the type of business you are, even in pharma. Depending on the products, we have brands all the way from retail-based to very, very specialty- based. I would suggest that part of it depends on, really, ‘what do we believe the social contract is that patients want to have with us’?

We have some abilities to understand patients at a deeper level, even if it’s anonymized, and start to understand their preferences and their behaviors. I think we all have to take a step back and say to ourselves at what point are we adding value versus at what point are we overstepping the contract that they would have with us? I think it partially depends on the type of business that we’re in.

In a very specialty business, I can see where a patient may need much more direct interaction where they give us permissionto understand more about them than, for example, a broad-based retail product. I think that’s the constant struggle, and that’s where leadership, ethics, and compliance really need to take an active role in every company., We’re at a point with data where we can do a lot, even in a technically HIPAA compliant way. However, we need to take a step back and ensure patients see it as a value add such that it doesn’t affect the delivery and/or the acceptance of healthcare and they have an opportunity to achieve better outcomes.

MB: Excellent answer. Let’s build on the customer experience and how we respect privacy and use the data. We know we’re going to have a lot more data. The term beyond the pill – there’s this question of is this just disease management rehashed? Are we still just ultimately trying to move a product and put some digital services around it? We did a study earlier this year, and we asked physicians what they think beyond the pill was, and they said patient education. Get the product paid for, and help me with my patients.

In an age when we can do digestible pills that’ll be tracked on an app and tell me when I took it and everything else, where’s that balance between what we can do in terms of the technology and the value added services? You mentioned some of the differences between specialty and primary care. How do we think and maybe from the physician point of view when they look and say you’re still not executing on some of the basic stuff I need?

SS: I think that’s a really good point. I think the first question we have to ask ourselves is, as we market various brands, are we actually hitting a basic level of threshold where it’s making it easy enough for a physician and/or a patient to actually get the therapy and stay on therapy? I think there’s a basic level there. Can the physician easily prescribe it, and then is it easily reimbursed and/or accessed by the patient themselves? I think those are the two primary things that we need to solve on a daily basis. Every day the access environment or the reimbursement environment gets harder and harder and harder, particularly with high deductible health plans and the environment moving in that direction.

Having said that, I think the other question is where can we uniquely provide value about our medication versus where are we probably playing in a space that other people could probably do a better job with and understanding where that difference is? Again, I think it’s going to be different company to company and brand to brand depending on the disease state. For instance, let’s use depression as an example. We have to help, and I believe we play a role in helping patients know that, for example, staying on therapy is important. That going off therapy prematurely before a physician has actually done that from a treatment plan could be dangerous. That just because you feel better doesn’t mean that you are better.

The role we play there in helping to educate is critical. In states like that, it’s absolutely important. How do we make it easy for a patient to actually consume the information that is there about their disease and the product itself? Let’s be clear. What we put out even today as far as patient education and I know that there’s a significant amount of regulatory screening that goes over it, as it should be, is not very patient friendly. How do we consistently challenge ourselves to think about how we actually make things more and more consumable by patients is important.

Then, as far as wraparound services go, I think you have to take a step back. For example, are we offering an app to benefit the brand or because it will help the overall patient experience. I think if companies can get comfortable with the fact that I’m doing this because I’m trying to actually help the patient experience, help better outcomes and, frankly, it doesn’t matter if you’re on my drug or not, then I think you’re on the high ground. The second somebody would ask you that question, it becomes dependent upon whether or not your real motivation is whether or not I’m going to sell more, then I’m not so sure that’s consistent with getting the best outcome that a patient may need. That’s a fine line that we always have to walk through and think through. The challenge question that I think we ask ourselves from time to time is “what’s our motivation?” If the motivation is financial, then maybe we should pursue a different route. If the motivation is really about patient outcomes, then I think we’re on the right track.

MB: I want to build on your comment of build, buy, or some version in between. Lots has been written about Takeda as a digital first company. You certainly have been very aggressive in saying we need to get there. Not just as an industry but as a company. There’s always the question of how do you incorporate or learn from everything else that’s happening out there? You can acquire companies. Roche goes out and acquires Flatiron. There’s other interesting companies out there that you can try and bring into the house and learn from. How do you incorporate that innovation? Is it shark tanks? How do you incorporate that insight?

SS: We can’t forget there are tremendous centers of innovation in this country. You think about all the smart VCs, everybody that’s sitting in the Boston area or the Silicon Valley area from a startup perspective. One thing I have experienced in the past is using VC companies to your advantage. There are huge VC investment companies that sit there. If you give them your requirements and you say this is the problem I’m trying to solve, and I’m going to bring my team out to Silicon Valley in two weeks. They’ll have 20 people lined up to help solve your problem and literally do a shark tank presentation for you. It’s not quite Shark Tank. I hope we were not as mean as the people in the Shark Tank when we do those things and interact with the entrepreneurs. It’s amazing what’s out there, and often times, these individuals, they’re eager. They want to do the pilot. They want to experiment with you.

One of the best ways to bring the outside in is go to the outside and use some of the resources that are available to all of us. Everybody works with consultants probably at some point in their respective companies, whether it be McKinsey, Accenture. They all have tremendous amounts of contacts that are out there in the VC world, in the development world. I think just being bold enough to talk about what your requirements are and what some of your unmet needs are, and then letting them help connect you with people that can source those ideas into you is a phenomenal first step in some of that.

MB: Thank you, Steve, very much for taking the time. That was an excellent overview. How do we start to bring all this together and think about from the outside in? As you said, are we doing this for the reasons – for patient outcomes? How do we balance that against the needs of the brand? Thank you very much, Steve.