Pharma´s Top 15
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Pharma faces a wide array of pressing issues—almost too many to think about comfortably—from drug safety and the industry's
image to intellectual property in emerging markets and the overall usefulness of marketing. To remain effectively focused
on strategy, industry executives must find relations between all the individual issues and group them into larger themes.
Pragmatically, we all know this is essential.
But things work differently in practice. How do executives see the issues facing their companies? And how do they organize
them into a handful of high-impact "pressure points"? We set out to discover the answer by means of a statistical analysis
of the opinions of more than 70 pharma execs.
What we uncovered is, of course, neither the best nor the only way to map pharma's world, but it provides a reality check
on how executives actually see the industry and its challenges.
RANKING THE BIG ISSUES
Our study has two phases: In the first, we asked executives to rank important industry issues; in the second, we used statistical
analyses to discover links among these issues.
Under Pressure
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In the first phase we used a modified version of the Delphi technique, a widely applied method to obtain forecasts from a
panel of experts. As mentioned, our panel consisted of 78 industry heads. Some run their company's commercial organization
or R&D. Others are in charge of a major function such as marketing or clinical development. Still others hold important line
or staff jobs. (Participation was anonymous, to prevent an individual's job function, company, or individual identity from
influencing other participants.)
We provided the panel with a list of major issues facing the industry over the next five years—a list we developed by reviewing
industry publications and conducting open-ended interviews with experts. Our panel filled out a questionnaire, indicating
the relative importance of the issues to them. Then, as part of the Delphi process, they reviewed the survey results, comparing
their own rankings with those of the other participants.
A key step in our research was to focus on those participants whose answers differed substantially from the average. Did they
know something others didn't? Outliers were asked why they believed their answers differed from those of other participants.
We shared this information with the other participants, then asked everyone to evaluate the issues a second time. (See "Pharma's
Top 15,", for the list of items and the final rankings.)
Though all 15 issues are important, six stood out:
Industry image Not surprisingly, public perception of pharma is a major source of unease among executives. In many developed areas outside
the United States, market-based healthcare remains controversial and unsettling. Yet even in a more market-based economy like
the United States', opinion polls point to a declining industry image. And in developed and developing areas alike, this declining
view makes Big Pharma an attractive target.
Cost of drug development To both commercial and R&D execs, the cost of drug development is of particular consequence. Costs are soaring mainly due
to larger and more complex studies. Some of the study complexity is a consequence of increasing regulatory demands. But much
seems to be the result of treating more difficult medical conditions. Voicing a general fear, the head of development in one
major company said, "My CEO says we must think of major changes in the way we develop drugs—not just to stop the growth in
costs but to reduce them by 50 percent."
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