Make It New - Pharmaceutical Executive


Make It New
To fix pharma's business model, nothing less than big, bold, and risky fits the bill. Two radical new visions focus on getting back to the roots of innovation—and letting a thousand flowers bloom.

Pharmaceutical Executive

What does all this bleeding-heart stuff have to do with business? According to Munos, with spending levels that average $15 million a year—chump change for a drug company—well-run PPPs have produced a robust portfolio of compounds moving from discovery to Phase III in less than five years.

But Eli Lilly doesn't just bankroll Munos to sit and spin beautiful theories. The Indianapolis-based company has backed a number of Web-based open-source initiatives, including InnoCentive, which matches scientists and R&D projects; Collaborative Drug Discovery, where researchers can store and share data; and Chorus, which runs outsourcing through Phase II. "The implications are still being sorted out," Munos says. "But they imply profound changes in culture, work processes, leadership, and compensation."

The Next Big Think

As different as Chane's and Munos's models are, both ask pharma to Think Big. Ironically, that may be what has been most glaringly absent from Big Pharma of late—and not just for research scientists like Robert Scott. When Ernst & Young's Carolyn Buck Luce points to the rise of a global middle-class as a telltale thumbs-up for pharma's future, she is quick to caution against complacency.

Buck Luce recalls hosting a roundtable of industry leaders last December to discuss pharma's changing landscape over the next five years. One drug-company board member discussed having once coined the term "financial services industry" when it was time to consolidate the crazy-quilt range of banks, insurance firms, credit-card companies, hedge funds, and such that comprises the nation's largest industry. This sparked the question, What will the pharmaceutical industry be called in 10 or 20 years?

"There was no unified Big Pharma answer," Luce says. "The heads of different companies each have a different response. Will it still be 'the pharmaceutical manufacturers industry'? Or 'the health and wellness delivery industry'? Or the 'lowering the cost of diseases industry'? Where a company leader placed the emphasis said a lot about how the company would meet the challenges and changes of the future."

Of course, there is no "right" answer because no one can read the future. But how a drug company answers that question—essentially, how its members work together to evolve its strategy, take risks, and seize opportunities—will determine which ones will still be here when the future arrives.


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