Our cover lead sums up results of a June 21 Roundtable with seven industry experts on the current outlook for competition. Drawn from the biggest of big pharma as well as smaller biotechs, the group's diversity did not hinder consensus around a single ringing message: Competition is intensifying, the terms of engagement are brutal, and failure is an option, for both big (we can call them mergers) and small operations. An industry struggling to meet rising expectations for new science—delivered in novel, patient-friendly ways, at low cost—may find the best strategy is the "controlled burn." This means cordoning off business practices that no longer work, especially in unwieldy, complex organizations that are hard to change, while investing in next-level relationships and capabilities that can generate better returns.
One of the best investments is training management staff on how to think about competition in a more disciplined way. An informal survey of some 60 c-suite executives, conducted for Pharm Exec by the Ipsos Health market research firm, found that while competition strategy was tagged as critical to future success, few companies are devoting the resources necessary to improve their internal capabilities in this area. While the threat is real and understood, the response is dilutive—a sign of complacency in advance of the coming storm?Next is our annual handicapping of growth potential in emerging country markets. Much is pinned on the "pharmerging" bloc as an alternative to slumping revenues in the mature countries. It reveals a fast-changing landscape with an increasingly savvy customer base, and where the impact of government on business is growing. Innovation in both products and business process is coming from here as well, often from local firms eager to leverage capabilities from imported technologies to establish a global presence.
Our story suggests that dipping the proverbial toe in the water in these markets is not an option. Successful engagement now requires the full monty—commitment and scale. As the stampede to the emerging markets accelerates, companies with the biggest stakes will find themselves best positioned to survive the inevitable downsides.
Pharm Exec's third feature is our annual review of company strategies to build patient compliance with medicines. The story provides many examples of good programs to persuade patients to take their pills, on time and at the right dose. Congratulation starts with c, but so does crash. In fact, celebrating success may well be premature, as the key metric of performance around compliance has not budged for decades: 50 percent of patients unilaterally cycle off therapy after only 12 months, on average. The danger is that without more progress in lowering this percentage, the commitment of management to compliance programs as more than a PR exercise will fade. Then it's time to prepare for the real storm, as side effects from non-compliance start ratcheting up.
All this is enough for industry to beg for new terms of engagement—or a new calendar. Are we ready for the next October surprise?