Words like insular and arrogant crop up when analysts describe pharma CEOs. This was (and partly remains) a generation of leaders who, as Whitney Baldwin,
president of Brand Engagement Strategies, says, "subscribed to the notion that 'If we make good drugs, everything will be
all right'"—as if external forces were beneath their attention. Patent expiration and generic competition were seen as no
threat because old cash cows would be replaced by an ever-returning crop of low-hanging fruit.
"They wasted a lot of time devising strategies for what they wish the market was—or for what it was 20 years ago—rather than
how it really is," says Michael Russo. "Now, when a new CEO comes in, there's a lot of activity. But is it real action? No." Missing is what he calls "horizon thinking"—analyzing the dynamics and trends and, above all, the unmet medical needs
whose pursuit will keep pharma's products innovative.
"There remains little recognition that the concept of risk has turned 180 degrees," Russo says. "Because of new market forces
and pay-for-value, brand extensions are now much riskier than innovation." He points to Exubera, Pfizer's recent inhaled-insulin
drug. Green-lighted by McKinnell as a low-risk R&D gamble, this me-too drug with a new delivery was, he says, "long in development
before the question 'Is there a market for it?' was adequately studied. The answer was 'Uh, not really.'"
Fear. Heads down. Twenty years ago and next quarter. These were doomed states of mind for leaders of an enterprise whose core is inspired innovation. So it's hardly surprising
that when asked to define what kind of new leadership pharma needs, the most common answer from our panel was courage.
"The courage to take the company in new directions, to take risks, even to fail. It's a tough commodity to come by, unlike
the ability to manipulate a brand before the public," says Ed Silverman, a veteran journalist for New Jersey's Star-Ledger and the blogger for
"The courage of his convictions—whether it's creating a culture based on ethical standards, channeling competition into productivity,
or inspiring people to be better than they are," says Bill Trombetta, professor of pharmaceutical marketing at the Haub School
of Business, St. Joseph's University.
Tony zook CEO and president, AstraZeneca US
"The courage to surround themselves with smarter people, to encourage pushback, and to give others credit," says Sander Flaum,
whose long research into leadership has yielded the finding that "true leaders all share one characteristic: They lead not
by the bottom line but by the mission."
The new leaders of today may not be innovators of the caliber of Steve Jobs, but many of them, according to Ernst & Young's
Buck Luce, "recognize the need for change and are slowly making progress in creating the preconditions for transformation
that goes beyond new models of drug discovery." Others agreed, pointing to CEOs who are inching their companies in a new direction: