In the first of our two blog posts, we explored how pharmaceutical companies can gain competitive advantage by partnering with technology companies, such as big tech and digital health firms.  In this post, we focus on common pitfalls pharma companies can avoid when engaging in these ‘pharma-tech’ partnerships, and the imperatives for success. 

We surveyed 34 executives (Senior VPs to C-Suite) from pharma/biopharma (76%) and medical devices (24%) companies about life sciences and technology strategic partnerships.  

Weighing up risks and rewards 

Partnerships with technology companies give pharma businesses a faster, cheaper, lower-risk way to access technology skills, rather than building new capabilities organically. However, an alliance between two companies with potentially divergent strategic objectives and ways of working, need to be effectively managed throughout their lifecycle. This includes everything from setting management objectives to defining the operational set-up and execution. 

 So, how likely are pharma-tech partnerships to succeed? 

  • Our research shows a success rate of 60% for partnerships between life sciences and technology companies of all sizes (across a total of 149 partnerships1 
  • That said, other research initiatives that focus specifically on partnerships with digital health start-ups paint a bleaker picture. More than half (53%) of firms report a success rate below 20%, with three-quarters of partnerships unable to meet their specified goals within two years.2  

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It’s clear that there are large discrepancies between reported success rates across different sizes and types of partnerships. This may be due in part to additional risks that come into play with early-stage partners. For example, the pharma company may need to provide a higher level of non-capital investment (e.g., time and resource allocation). And the potential to scale up operations may depend on the partner’s funding. That said, there are several common pitfalls that can affect all partnerships, hindering value realisation3 (see figure 1 below). Pharma companies must consciously avoid these roadblocks to minimise risk and increase their chances of success.  

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Figure 1. Common barriers to success in pharma-tech partnerships 

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There are several ways that pharma companies can avoid these pitfalls, while supporting the successful set-up and management of their tech partnerships. In our research, we looked at four ways pharma companies can maximise value from tech partnerships4 

  1. Preparing internally
  2. Finding the right partner
  3. Setting up correctly
  4. Executing effectively

Let’s take a closer look at each of these areas. 

Stage 1: Preparing internally 

76%  of life sciences executives believe that having a clearly defined partnership governance structure is an important success factor for technology partnerships.” 

1. Before forming a tech partnership, set up an appropriate partnership structure and governance. This will help both parties formally agree on the partnership’s objectives – and develop a back-up plan in case targets aren’t hit. The pharma company should develop a dedicated team with the right talent and resources to manage technology alliances and joint ventures. On the one hand, it must ensure that “partnership management” functions (e.g., procurement, legal, business development and licensing, etc.) are established to oversee the partnership set-up and structure. On the other, it should create a cross-functional advisory board that ensures holistic representation across relevant business areas.  

2. Equip teams with basic technological knowledge before venturing into partnerships that require the handling and technical understanding of new, complex technologies. For instance, say that a pharma-tech partnership plans to pool internal and external clinical and pre-clinical datasets in data lakes, then apply AI algorithms. This may call for the pharma company to upskill or hire more people (e.g., data scientists or biostatisticians), who can effectively work alongside their counterparts from the technology partner to interpret and find concrete applications for their technologies. 

Stage 2: Finding the right partner 

83% of life sciences executives look at technological relevance and strategic alignment as key criteria when selecting their technology partners.” 

1. Create a living scan. Pharma companies should continuously scan digital health and big tech companies to identify potential partnership opportunities. The scan criteria should include company size, therapy area and geographies. A live scan provides pharma companies with an early-mover advantage to form a partnership before competitors swoop in. 

2. Look for complementary capabilities. It is important to ensure that potential technology partners complement and build on existing capabilities. Some categories to consider include strategic fit, value creation, commercial landscape, R&D, patient strategy, and risks.  

3. Build an ecosystem of potential partners through innovation hubs/startup accelerators. Pharma companies have a powerful opportunity to create a network of digital solutions in relevant therapy areas and business functions by partnering with several small startups. In doing so, flexible governance and direct interface with all individual partners help ensure longevity, alignment, and sustained satisfaction within the partnership.  

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Partnerships with technology companies give pharma businesses a faster, cheaper, lower-risk way to access technology skills, rather than building new capabilities organically. 

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Stage 3: Setting up correctly 

89% of life sciences executives structure their technology partnerships through revenue sharing/royalties, one-off payments or milestone-based payments. These different options are equally popular.” 

1. Ground your partnership set-up on a thorough understanding of the financial, legal and IP implications of different engagement structures with technology companies. Carefully defining the intended level of formality and engagement with each partner and making sure they relate back to the roles, responsibilities, and accountabilities expected of each party. 

2. Establish and align on the partnership’s goals and agree how these will be measured. It’s vital to define key milestones and stage gates for the short to medium term before predicting long-term partnership outcomes. That said, upfront scenario planning could also help assess the level of risk exposed to exit timings and identify the ideal partnership duration. 

3. Ensure funding is secured and planned out for the first phases of the partnership. Pharma companies should continuously reassess and adjust funding as the partnership achieves its key milestones and KPIs. 

 Stage 4: Partnering effectively 

83% of life sciences executives believe that setting out a clear strategy is a critical success factor for technology partnerships.” 

1. Ensure that the partnership strategy aligns with corporate objectives and takes nascent pipeline into account. Pharma companies can incentivise quick wins while building long-term capabilities that can be used across the organisation (e.g., in other business functions or other therapy areas). 

2. Dedicate an executive sponsor. Work with the partner to co-define an incentive structure linked to partnership success.  

3. Don’t be afraid to exit. Avoid over-investment and “commitment escalation” (continuing to pour resources into the partnership when it’s not delivering the desired results). Remind the team that technology partnerships aren’t like drug development – there’s a much lower sunk cost associated with partnerships compared to R&D. 


In a nutshell: 

Forming partnerships with digital health and big tech companies can offer a fast and cost-effective path to building new capabilities, particularly for pharma companies trying to keep pace with digital disruption and leapfrog competitors. That said, there are no guarantees when dealing with new technologies and innovative, fast-moving companies. This can make it harder to unlock value from partnerships. When partnerships are well-prepared and correctly managed, each party benefits from the pooling of industry-specific capabilities and resources. The sweet spot? When partnerships spawn solutions with tangible applications across the pharmaceutical value chain and healthcare ecosystem.  


1 Accenture Executive survey, October 2021 


3 Accenture Executive survey, October 2021 

4 Ibid 

Pervaise Khan

Managing Director – Life Sciences UKI Industry Lead

Jeffrey Berry

Managing Director – Accenture Strategy, Mergers & Acquisitions and Private Equity

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