5 Ways To Keep Your Life Sciences Startup From Becoming Theranos
Last year, Elizabeth Holmes, founder of Silicon Valley startup Theranos, was charged with nine counts of wire fraud and two counts of conspiracy to commit wire fraud, and she faces 20 years in jail if convicted. Why? For claiming that her company could run medical tests using a single drop of blood.
The public was misled by Holmes and former Theranos president Ramesh Balwani through a massive lack of transparency. The company did not have peer-reviewed evidence proving the safety and effectiveness of its blood-testing machine, and questions went unanswered about the integrity of Holmes and Theranos, leading to the company’s eventual demise. Although many lessons can be learned from Theranos’ failure, the one that stands out the most is this: Transparency is essential throughout the entire product development life cycle.
Transparency is critical for all industries these days, but especially for the life sciences sector. When it comes to innovative services and products from emerging life sciences companies, transparency can be pivotal to preventing fraud and wasted investments. It can help keep investors informed and up-to-date, improve product development processes and quite literally save people’s lives.
Below are five ways to achieve and maintain continual transparency in a fast-growing life sciences company:
1. Keep investors informed. Since your investors are financially backing your company and its products, they have every right to full transparency of products being created. They should be communicated with regularly and made aware of the development steps taken, any changes made to processes, and notable failures and successes throughout the entire product development life cycle.
That said, venture capital interest can be difficult to snag these days, especially for life sciences startups. Consider other funding sources available, such as angel investors, private placement, incubators, entrepreneurial competitions, crowdfunding as well as city, state and county resources. Above all, remember that no investment pitch—no matter the investor source receiving it—will succeed without a specific clinical date, clear unmet and demonstrable cost savings over existing solutions/treatments, and a commitment to peer-reviewed research and transparency.
2. Digitize all assets and processes. As technology advances and market demands intensify, systems that rely on inefficient, insecure, and costly paper-based and hybrid processes are falling short. By digitizing all assets and processes, life sciences companies can remain competitive and avoid a Theranos-esque debacle by making information more readily available to company stakeholders. Additionally, digital systems can help strengthen data integrity, which provides the assurance of accuracy. When first initiating a digitization project, it’s important to begin by analyzing all existing systems, processes, tasks, and assets, including those already leveraging digitization.
Also during digitization projects, keep in mind that any data being generated throughout R&D and manufacturing, supply chain and patient aftercare processes will need to be collected, stored, sifted, and mined for meaning. For many life sciences companies, this calls for strengthening master data management architectures and strategies (especially since IoT data can unleash even more process data). For instance, when a life sciences organization adds data analytics capabilities to its products or processes, usability can be radically improved without a dramatic increase to the price point. Furthermore, when combined with IP connectivity, such data is easy to collaborate on and transfer, regardless of a users’ location, whether it’s a doctor accessing the information through an app or a pharmacist receiving automatic shelf-stocking notifications.
3. Pass audits and inspections with flying colors. Audits and inspections tend to make employees stressed and unsure of exactly what could happen. “What if I don’t know the answer?” “What if I can’t provide what they are asking for?” Instead of allowing employee stress in an unproductive manner, remember that an auditor’s goal is to confirm that the trial is run in a way that ensures the safety of subjects, protects their rights, and generates reliable data, while an inspector has a similar goal with respect to the assessment of trial conduct. Transparency can help ensure that trials are run at the level of quality regulators and inspectors expect, and also empower employees to provide auditors and inspectors with the information they require, in the format they’re expecting, and precisely when they ask for it.
4. Encourage collaboration across the entire organization. Ultimately, everyone in a life sciences company needs to be on the same page and be able to effectively collaborate. The right digital solutions can connect employees and any company stakeholders, providing virtual collaboration environments while also avoiding the dangers of information silos. When data is siloed and various business units within a company are unable to share information with one another, errors ensue, work processes slow down, and employee frustration is inevitable. Make sure everyone in the company—from sales and marketing teams, to quality assurance and compliance units, to C-suite executives—is aware of who has access to what data, and ensure that all business units can share, connect, and collaborate to promote a truly transparent culture.
5. Get your clinical trials under control. With an ever-growing collection of data, activities and relationships that can change from day to day, it’s crucial to maintain indivisible connections between clinical operations and clinical quality. Because clinical trials are so data- and documentation-intensive, manual, paper-based processes are simply not effective. Digital systems can create efficient, consistent, and well-managed clinical processes that lead to successful trials. By digitizing, automating, and connecting all documents, the right tools can help orchestrate the management of site protocols, SOPs, and reporting across sites to accelerate trials while improving alignment.
A lack of transparency in clinical research has serious implications not only for patients, but also for providers, stakeholders, investors, and more. Failure to publish trial results is an ethical violation and withholding findings after individuals have participated in trials is a violation of a researcher’s responsibility to those participants. Most importantly, a lack of clinical trial transparency can leave patients and their providers with an incomplete picture of a treatment’s benefits and risks. The inefficiencies caused by a lack of transparency can also lead to unnecessary health system spending on ineffective or even harmful therapies.
While horrifying to witness it unfold, the Theranos saga is an outlier among ethical companies. In fact, many tech and life sciences companies have best practices already in place that other startups can and should learn from. For example, by prioritizing digitization, transparency, and collaboration, and regularly interacting with and getting feedback from customers, vendors, peer reviews, partners, and other third parties, life sciences companies have an opportunity to accelerate their products’ time to market, all while ensuring safety and continual compliance. The key is remembering that companies that play by the rules and prioritize transparency only stand to benefit and, ultimately, win!
Contributed Commentary by Matt Lowe