It's been a subject of abiding interest ever since Eve allegedly led Adam to bet the Garden and tempt fate. The bet was not a good one, and our first mother became history's first example of the throw-caution-to-the-wind, high-risk style of leader.
Risk taking is one of the qualities that often get included on lists of key leadership traits, along with being a visionary, a strategic thinker, a steward, a coach—and, yes, even a servant. Such lists are too abstract to be helpful. Leadership, after all, evolves from the dynamic of particular situations. Without Hitler, Churchill may well have been remembered as a quirky backbencher.To understand what it takes to lead in today's pharmaceutical environment, it's important to first understand the nature of six major challenges facing the industry—they speak volumes about the leadership qualities that will separate great industry leaders from the pack.
1. Finding New Ways to Grow
Mergers and acquisitions and price increases were once the one-two punch for sure-fire growth that helped Big Pharma keep the wolves at bay, especially during periods of pipeline drought. The result of all the merger and acquisition mania: Companies, like Pfizer, with its 40- to 50-billion dollars top line, must generate four to five billion dollars a year to sustain the growth shareholders have come to expect and demand. But, with only a few major players left, the consolidation game is pretty much over.
What about raising prices? This, too, is becoming less of an option. With the US government contemplating picking up what may be a $50 billion tab for Medicare drugs, count on pressures for price controls to intensify; companies may end up not only freezing prices, but also cutting them.
The industry needs to find new ways to grow. That means identifying major unmet needs and developing effective, profitable drugs to address them.
2. Translating Technology Into Drugs
There has never been a more exciting time for the healthcare industry. There are huge untapped areas, enormous unmet medical needs, and a robust stream of new, promising technologies. The challenge: How do you decide which technologies to invest in, which business partners to trust, and which markets to pursue? How do you calculate the risks involved, and how do you deal with failure if it happens? These are tough decisions on which companies—and leaders—will be judged.
3. Providing Personalized Medicine
If personalized medicine isn't here yet, it's on its way. There is a revolution brewing within an increasingly vocal and powerful payer community that is unwilling to accept the fact that most major drugs aren't effective in up to one-half of the patients who take them. And recent headlines over OTC and prescription drugs with severe side effects have only added fuel to the fire. The pressure is on to identify those patients who will respond positively to a specific therapy, then to develop drugs to target them.
4. Moving Fast
As existing drugs come off patent, replacements must be found—and fast. The old model of taking 10 to 15 years to develop a blockbuster drug on which companies "bet the farm" is no longer viable. Technology is moving at breakneck speed. Business Week recently reported, "A decade ago there were fewer than 10 oncology drugs in clinical trials. Today over 400 cancer drugs are being tested in humans." The race will definitely be to the swift.
5. Doing Business Globally
For many years, doing business globally meant marketing US-made drugs and devices overseas. Now, however, overseas markets are coming into their own: They are setting up their own companies, manufacturing their own products, and securing intellectual property rights. Alliances will have to be forged, foreign capital—both financial and intellectual—will have to be won, and profits will have to be distributed using new formulas.