Terry Hisey, Deloitte - Pharmaceutical Executive

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Terry Hisey, Deloitte

Consultants Confidential


THE REAL CASE for consultants is that they bring capabilities that allow organizations to implement sustainable change in their businesses; and that without outside assistance, these organizations wouldn't realize strategic, operational, or regulatory objectives. Often, it makes sense to use outside consultants when:

  • The skill and/or knowledge set required is not home-grown quickly and the company will have only episodic or one-time need
  • The situation requires an outside agent to be a change catalyst and to hold an organization to intellectual honesty.


Terry Hisey
Pharmaceutical consultants differ from general consultants in a variety of ways. Those that really advise and assist the business are ones that combine the domain expertise of their consuming discipline; bring insights to make the work contextually relevant for the complexities of the life science company; and bring knowledge in a way that assures demonstratable regulatory compliance.

HOW WELL ARE PHARMA COMPANIES MANAGED?

They run the gambit. Without fail, there is significant focus and expertise in all companies in terms of scientific integrity and a passion for both patient safety and the development of effective products. A broader range of effectiveness exists when you look to the strategic and operational decisions folks make. It is an industry that embraces change more slowly—although pockets of innovation and rapid acceptance of change do exist, particularly in biotechnology-based businesses. Companies right now need to improve their approach to and execution of the development of new products. What I refer to as "search and development" versus traditional R&D models will fare better.

There is an imperative (as well as a significant opportunity) to take out substantial operating cost and to have the processes and governance in place to sustain the lower-cost position. Much of the leadership today is dealing with a level of uncertainty and pressure never before seen and not all leadership fares equally as well.

Companies need to take bold steps to recharge their development pipelines and approaches.This will mean abandoning the status quo. A real sense of urgency is needed.

SOME THINGS TO STAVE OFF THREATS:

  • Attack operating costs to eliminate unnecessary spend: change the fixed-asset mix; take other measures to get to a new, flexible, lower-cost structure—essential to preserve EPS (earnings per share) performance. These will come through supply-chain opportunities and significant movement toward global shared services.
  • Look for new business opportunities that take advantage of convergence opportunities in products, while staking out a significant role as the healthcare system moves to new care models.
  • Look at opportunities to outsource some or all product manufacturing to lower the long-term fixed-cost position and to put your company in a position to deal with the greater number of lower-unit-volume products that will make up the future portfolio.
  • Have an aggressive plan for emerging market opportunities, as a venue for sales, source of product innovation, and potential product sourcing.

A BIG QUESTION: DEVELOPMENT AND USE OF DIAGNOSTICS

The key challenges facing pharma for the future will be: the rise of consumerism, the need for new R&D models in the face of lost access to capital, the globalization of the industry, and the evolution from interventional therapies to health management.

The response to the R&D crisis should be the establishment of open business models; companies should build strong partnering skills into the organization and focus on development versus discovery.

In the face of growing consumerism, pharma companies need to play an active role in engaging providers, payers, regulators, employers, and patients in a discussion across the continuum from healthy patient to management of a chronic disease. A big question will be the development and use of diagnostics: Are they genotyping for potential issues, diagnostic, or to confirm applicability of various treatments, especially for oncology products?

INSIDER INFORMATION

Deloitte Consulting, as part of its overall healthcare professional-service offerings, provides specialized consulting expertise in the application of information technology to significant integrated delivery networks, large academic hospitals, HMOs, and other major managed care organizations and health insurers.


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Source: Consultants Confidential,
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