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Competitive Intelligence & Counter-Intelligence
By Marc Limacher
Integrated Strategic Information Services, Inc.(I.S.I.S)

www.isisglobal.com

Overview
Being able to anticipate – rather than react to – competitors’ next clinical or commercialization moves is particularly critical in the biotech industry, where the costs for drug development is estimated to exceed $1 billion. Being number two in the marketplace is no longer good enough, and failing to notice competitive blindspots can be very costly or even destructive. Therefore, even smaller and start-up biotech and medical device firms do increasingly allocate resources towards a systematic competitive intelligence (CI) capability at the very early stages of the clinical development cycle.

Systematic Early Warning System
The inherent limitation of conducting a one-off competitive assessment of competitors’ activities and intentions are obvious: the results are rapidly out of date. Therefore, a one-time baseline CI assessment is typically followed by a systematic monthly, bi-monthly or quarterly monitoring of specific KITs (Key Intelligence Topics). Monitoring systematically the regulatory timelines, ongoing clinical trials of current and future competitive products, competitors’ sales and marketing strategy, KOLs’ changing perceptions and preferences, and the changing reimbursement environment provides early warning signals on competitors’ activities. Other benefits of systematic CI tracking are the fast implementation of urgent CI ad hoc inquiries and the rapid dissemination of “red alerts” in the case of suddenly detected, previously not considered competitor targets.

Ethics Policies Are Mandatory in CI Collection
How does one obtain CI data ethically and legally? Solely relying on databases and other secondary data channels provides only the foundation for a CI effort, and puts your firm – at best – at par with your competitors since this type of information is easily and readily available to all market players. The true competitive advantage can only be obtained through primary, human intelligence data by talking to KOLs, equity analysts, target company representatives, managed care pharmacy directors, specialty pharmacists, and other relevant sources as well as visiting conferences and symposia. Whether you are conducting such primary CI collection internally or through an agency, it is critical to ensure – in writing – that strict ethical guidelines are being adhered to. While larger companies do typically have their in-house code of ethical conduct for data collection, a good starting ground to develop such a code is the Code of Ethics defined by the Society of Competitive Intelligence Professionals (SCIP), which can be found at www.scip.org.

Counter-Intelligence: Protect Your Intellectual Assets & Prevent Data Leakage
Because the U.S. is the leader in world economies and creative life sciences R&D, it remains a prime target for competitive information collectionoperations and industrial and economic espionage. However, according to a survey among large U.S. corporation by ASIS [American Society for Industrial Security] in 2002, fully 93% of corporations had no formal counter-intelligence program in place, while 56% of the Fortune 1000 admitted to having been victimized by some form of exploitation ($100B+ in lost sales and added R&D costs every year.) However, since then, an increasing number of companies have placed greater efforts and resources towards safeguarding proprietary information and training their employees on being alert to unsolicited requests for information and vigilant at medical conferences and symposia when approached for sharing information. Smaller firms – due to their limited resources and other priorities – are at greatest risk for “attack,” and it is precisely in those firms that management should cultivate a counter-intelligence mindset as part of the corporate culture. Building on Andy Grove’s (former Intel CEO) renowned and often cited theme that “only the paranoid survive,” an effective, proactive counter-intelligence plan to neutralize unethical and illegal gathering of data has three components:

Security
1. Physical measures that can be installed to hinder access to trade secrets
2. First line of defense (dedicated internal counter-CI team)
3. Tradeshow security measures at medical conferences & symposia

Detection
1. Vulnerability scan of company’s weaknesses (“Red Tag” operation – a staged intelligence attack designed to expose areas of data leakage)
2. Scanning of competitors’ CI capabilities
3. Identification of patterns and activities targeted against a company, company personnel, and assets

Operational
1. Processes that limits exposure of capabilities, strategic plans, trial status, etc…
2. Social re-engineering of workforce – sensitized counter-intelligence mindset

Conclusion
Clearly, life sciences companies that cultivate CI as a core capability systematically collect, analyze, and use future-oriented competitive insights more effectively, more efficiently, and indeed more intelligently, than competitors to shape strategy at all levels. At the same time, safeguarding sensitive information and preventing data leakage is equally - if not more – important. CI represents the flip-side of the strategy coin. Strategy without intelligence is not strategy, it is guessing. CI is not market research, nor is it industrial espionage. It is a legal, ethical, and creative process that generates a decision-related, future-oriented product managers can use to eliminate corporate blindspots, facilitate change, and improve competitiveness.