Meet Pharm Exec’s 2015 roster of 17 Emerging Pharma Leaders. Selected independently by our editorial staff with support from members of our Editorial Advisory Board, this year’s group adds to a list of more than 200 alumni dating back to June 2008. We called that first cohort of leaders “the change generation” and frankly the description remains apt today-change is still the constant because there is no single commercial model that offers a surefire guarantee of success. What is different is a greater diversity in leader backgrounds and the skills required to advance to the “c-suite.” We are seeing more bench strength in vaccines and generics, once adjacent businesses that are now key sources of product and process innovation; a transformation of finance and manufacturing roles, from a technical function to a strategic priority; new competencies in organization design that help field forces get even closer to the customer; the refiguring of medical affairs as liaison to a more informed patient community; and the advent of a new generation of in-house technologists, imported from outside the industry, with the capabilities to deliver customized digital messaging in multiple channels, on many fronts.

	“Running a start-up, there are moments that test your conviction, that have you questioning the basis of your technology, the data you’ve gathered to date, and your overall vision. Larger companies might have the ability to ride these moments out, but young companies don’t have that liberty.”

	Rahul Aras, CEO of Juventas Therapeutics, recalls a period following the company’s first fundraise while in the midst of a key large animal study for lead product, JVS-100, a gene therapy developed to activate the body’s repair pathways, now in Phase II trials for patients with advanced ischemic heart failure and late-stage peripheral artery disease.

	Juventas was in between its Series A fundraise and a board meeting when it saw preliminary results from a large animal study that were “discouraging” relative to benefits seen in earlier rodent studies. “When data comes in that are not consistent with the primary objective, a start-up has the choice to either fold or respond.”

	Aras and his Cleveland-based team had a tough conversation: “Do we believe in the biology, the science that is the foundation of the experimental treatment, and in the data produced to date? If so, then this new data is trying to tell us something.”

	Despite having just 48 hours to solve the problem, the team didn’t panic, but intensely scrutinized the results. The group was able to find a signal that frames the basic concept at the heart of the treatment’s mechanism of action, that in patients/animals with greater tissue damage, they saw a stronger, more demonstrable response to the treatment. An effect that has been replicated in recent human clinical trials evaluating JVS-100 in patients with advanced chronic heart failure.

	The team responded in remarkable time with an action plan for a mid-study course correction and was able to meet its timeline for a successful investigational new drug application. Moments like this can define a company, although in reality, there are dozens of comparable moments, the CEO notes.

	Aras credits the team he constructed for its ability to maintain focus and make calm decisions when challenges present themselves. If he takes credit for anything, it’s that he’s hired well. “I look at myself as a team builder.”

	“Hiring is a key focus,” he noted. “Setting goals and making sure we meet them is essential for any management role, and we’ve hit all our milestones in budget.” But Aras pins the success Juventas has experienced to date on having recruited top tier talent and maintaining an open culture where employees have the opportunity to succeed.

	Juventas takes fun seriously, Aras adds. Anyone in the drug development industry will agree this is not an easy job, so levity can be a vital instrument. There are a lot of factors out of your control. In this industry, everyone comes to work with a purpose, adds the CEO. “We take our commitment to developing therapies seriously but want to enjoy the journey.”

	As the company has grown, Aras has seen his role expand from basically being a project manager in the early days, to the quintessential CEO managing multiple functions. Every day is different as Aras spends copious time traveling from Cleveland to the coasts, constantly communicating Juventas’ story, executing on business development and managing clinical progress. “It’s clearly a cliché, but we’re always raising funds”-$45 million to date with VC backing as well as support from Takeda Ventures and the Cleveland Clinic.

	Juventas’s technology is born of Cleveland Clinic science, where Aras worked in the innovation office as the Director of Life Science Commercialization spearheading the biotech portfolio and seeking partnerships. Prior to his time at the Cleveland Clinic, Aras followed his PhD in biomedical research at New York University with a stint at Cold Springs Harbor’s Office of Technology Transfer. Becoming a CEO of a biotech company was definitely not according to plan, but it can be tricky to plot a career at the mesh of science and business.

	“I moved to Cleveland for two years, 10 years ago,” Aras jokes. “It’s a nice place to build a company and an attractive place for a lot of talented, entrepreneurial minds. It’s amazing how many people have roots in Ohio,” he notes. Juventas has done well recruiting people who have worked at more traditional life science hubs and may have seen this as an opportunity to get back closer to home.

	“Looking forward, Juventas will continue to operate lean and with a focus on its later stage trials,” Aras says. The company, he conveys, is founded on being disciplined, diligent, and cash conservative.

	“We’ve been able to stay focused while adapting to shifting environments for eight years,” Aras says. The company was founded during the market crash; the Dow was down 700 points the day Juventas closed its Series A. “Now, we can benefit from the current enthusiasm around biotechnology and gene therapy to assist fundraising, but we’re not changing course or jumping on any fads or bandwagons.”

Aris Baras, Executive Director and Co-Head, Regeneron Genetics Center

	As an undergrad at Duke, Aris Baras had the proclivity to reach high. In a leadership course, his class was tasked to connect with pioneers in their fields of study. Possessing MD/MBA intentions, and a Greek-American background, Baras made a hopeful but improbable plea to connect with industry titan Roy Vagelos, chairman of the board at Regeneron and retired chairman of the board and CEO of Merck & Co. 

	“I figured, why not try to reach out to him.” Baras found contact information for an administrator of a board that Vagelos was on and sent a request. Shockingly to Baras at the time, Vagelos responded in less than 24 hours. He soon learned that “Vagelos’ commitment to education and mentoring is unparalleled.” Stemming from the initial contact, Baras got to know Vagelos, speaking and meeting several times a year. His input and guidance continue to be invaluable, he adds.

	Clearly, Vagelos saw something in Baras, which is evident in his willingness to give up his time. And to further his support of the young MD/MBA, five or six years ago, Vagelos offered another priceless networking opportunity when he facilitated a connection with biotech colossus, Regeneron’s chief scientific officer (CSO) George Yancopoulos.

	Baras began working with the CSO and Regeneron team members taking on projects while still in academia. “Yancopoulos’ ability to drive innovation, develop new technologies, and deliver major breakthroughs over and over again are legendary.” If you’re counting, that’s a pair of awfully stellar mentors to have in one’s corner before leaving school.

	While completing his training, Baras contributed substantial time to Liquidia Technologies, a company engineering precision particle-based vaccines and therapeutics, as well as doing some consulting for Regeneron’s translational medicine and technology development activities. Baras has now been at Regeneron for five years, and is the executive director and co-head of the Regeneron Genetics Center (RGC), which he co-founded.

	Building from the ground up and now as co-head along with Dr. Alan Shuldiner, Baras oversees the 50-employee RGC that cuts across all of Regeneron’s drug discovery processes by applying large-scale human genetics to drug discovery. It has three goals in mind. First, the RGC aims to assist target discovery through novel gene discoveries and genetics validation for new and existing drug targets. Second, the program aims to inform the development of product candidates in Regeneron’s pipeline by identifying potential indications, supported through human genetics, for these development programs. And third, the RGC enables pharmacogenetics analyses to tease out potential populations with better responses to therapies.

	Baras directs collaborations with numerous external organizations, and most notably with the Geisinger Health System, in an effort to build one of the world’s largest comprehensive genotype-phenotype resources combining genomic and de-identified clinical data.

	The RGC has sequenced over 50,000 participants in its first six months-and is shooting for a five-year goal of 250,000 individuals. The RGC’s capacity could go even higher as Regeneron continues to scale its program. There may also be strategic opportunities to participate in the President’s Precision Medicine Initiative; Yancopoulos was invited to the White House for Obama’s announcement and has participated in planning workshops for this initiative.

	Aside from the Greek connection with his mentors, Baras is amazed by the work culture at Regeneron and considers it to be the “sweet spot” where substantial resources are available for R&D and technology development. Teams can move quickly on exciting science and innovation without being held up by bureaucracy. “It’s a perfect blend of freedom to commit to  innovation and to have the resources to pursue important scientific questions.”

	Baras places an emphasis on building teams and is committed, “to finding talented and motivated people who fit into the culture, share an unwavering passion for science, and are driven to make a difference for patients.” Regeneron affords its research teams “a pretty flat structure,” as Baras points out, “it’s important to be inclusive giving everyone a voice and the opportunity to make meaningful contributions.”

	Additionally, Baras contends that process is critical to success and emphasizes the importance of teamwork in delivering results and making an impact. Regeneron is working across many different fields, therapeutic candidates, and technology development opportunities. “There needs to be real discipline in taking on a project and delivering results. Regeneron has an excellent culture and proven track record of internal collaboration that has delivered major breakthroughs and technological advances time and time again.

	“We like to dream big, get things done, and have a lot of fun. We constantly strive to inspire our teams and to be poised to take on the next big challenge without being afraid of failing.”

Jay Barber, Associate Vice President,
	Global Influenza Franchise & Product Strategy, Sanofi Pasteur

	Jay Barber’s nearly 20-year tenure at Sanofi Pasteur has seen him earn his chops in pretty much every one of the company’s sales and marketing departments. He got started “on the ground floor in telesales,” then moved up to become a sales training manager. He also spent time in customer service, eventually leading the department as the company aligned its customer service with its commercial strategy. Embarking on an MBA, he found he particularly enjoyed the marketing courses, so he then decided to take a step down for a role as a product manager in marketing. Before long he was back at a senior level, becoming senior marketing director for the company’s US pediatric vaccines. 

	Barber’s relentless quest for new skills and experiences saw him leave Sanofi Pasteur at this point (14 years in) to try his hand as a strategic leader at an advertising agency. But after 18 months of this, he realized he “wasn’t meant to be on the advertising side of the business.” Returning to Sanofi Pasteur, he picked up where he left off and his ascent continued apace. 

	Viewing his role as a mobilizer of immunization through marketing, Barber’s portfolio spans pediatric vaccines for polio, pertussis, Hib (

 type b), adolescent/adult pertussis boosters and Sanofi Pasteur’s entire flu franchise. His campaigns have used personal stories, family testimonials, non-profit collaborations, and social responsibility initiatives to reach healthcare providers and the general public. Most recently, as commercial lead for the launch of Fluzone High-Dose, a vaccine specifically designed for the elderly, he developed a creative campaign that broke through a commoditized influenza vaccine market and exemplified his deeply held belief that protecting people from vaccine preventable diseases is both a business imperative and a moral commitment. 

	The Fluzone High-Dose vaccine US marketing approach not only helped Sanofi Pasteur’s global flu franchise reach €1 billion sales in 2014, it also resonated with Barber personally. “My parents are of the age to qualify for this vaccine now; I’m really proud to know they’ve got a better chance of not getting the flu because of something I was directly involved with.” Within three years of leading the launch of Fluzone High-Dose vaccine, Barber had increased sales of the vaccine option by 160%.

	Barber is happiest doing what he does now on a daily basis, that is, strategizing: “thinking about where we need to be and what we need to invest in to be successful.” The key challenges of the last five or six years in this regard, he says, have been those brought about by health economics. 

	“From the moment you’re working with R&D in the clinical development of a product, you’re no longer thinking of designing a  clinical trial just on medical outcomes; you’re thinking about how the trial may generate the data for a strong pharmacoeconomic story that demonstrates a health economic benefit to policymakers, payers, or practitioners,” he explains. 

	But rather than throw obstacles in the way of the drive to prevent or cure illnesses, health economics has made strategizing “more fun,” says Barber. “And if you’re talking about what’s right for public health, it’s pretty easy to prove the value of vaccines, because by immunizing you reduce hospitalization and you reduce complications of other diseases. In fact, what I’m seeing is that the focus on health economics is strengthening the argument for the value of what we do.”

	Last June, Barber made his first foray outside the US to lead the global flu franchise, and his goals now are fixed around “strengthening my skills globally and leveraging the marketing learnings from the US globally.” 

	He admits “for me, the unknown is vast, going from a very US-centric point of view to absorbing a new way of working.” 

	But Barber’s Sanofi Pasteur colleagues are confident that his new role will provide a greater platform for his talents, and an ideal opportunity for extending his vision to new markets. And his wealth of experience stateside can only be a boon to any future direction he takes.

	“I can look back and say that I’ve diversified my experience enough to allow me to think more broadly than if I’d stayed deep in one track,” he says. “I’ve learned skills from every one of my roles that I still use today.” 

Julian Bertschinger, Co-Founder and CEO, Covagen

	Like many of the most gifted entrepreneurial scientists populating the biotechnology space, Julian Bertschinger’s story is almost antithetical to the incrementally advancing career narratives that define the conventional big Pharma leader. 

	In 2007, at age 30, he went from his post-doctoral program at the Institute of Pharmaceutical Sciences ETH Zürich to founding and leading biotech start-up Covagen, along with his colleague, Dragan Grabulovski. The Zurich-based company was established to develop the technology platform invented by Grabulovski, FynomAb, which fuses binding proteins derived from the human Fyn SH3 domain to antibodies to create therapeutics for the treatment of inflammatory diseases and cancer. 

	With seed money from Novartis’s Venture Fund, Covagen grew from a one-employee concern (Bertschinger steered the ship alone for six months while Grabulovski completed his PhD thesis) to a 30-man outfit, raised more than $60 million in venture capital, and entered a strategic collaboration with Mitsubishi Tanabe Pharma Corp. in 2012, eventually catching the attention of Janssen affiliate Cilag, who acquired the company last August. Now 38, Bertschinger sees the Janssen purchase as his “new beginning.”

	Jumping in solo at the entrepreneurial deep end back in 2007, of course, had its challenges, and from day one Bertschinger had to tackle that steep learning curve that can propel scientists from bench to boardroom. Initially, Covagen had no laboratory; when he located one, Bertschinger had to clean it himself before he could start work. He also set up and administered the company website. More urgently, he had to develop business skills to communicate credibly with investors. In this regard he welcomed support from Anja Koenig of the Novartis Venture Fund, who was “crucial for my personal development,” he says. “I was a hardcore scientist, extremely focused on data and facts. Anja helped me to relate on a business level; she had insights into all the different VC funds available and the political situations behind them.” It was an education very different from what he’d been used to. “I gradually got more and more exposure to the outside world,” he says, “all the while learning the different aspects of drug development in a hands-on role.”

	Managing employees was also something Bertschinger had to learn effectively from scratch. But starting from the position of sole employee, it’s a skill he has been able to refine gradually, building his team from the ground up. “When the time came, I had to pitch to investors, I had to hire people, I started to become a real manager,” he says. Since then, he has striven to maintain a “biotech culture,” where employees feel they can make decisions independently with “no committees and few processes behind the decision making.” People in the company “feel a very strong ownership of their projects, so we have a high level of commitment,” he adds. It’s an intimate, supportive culture; one Janssen colleague praises Bertschinger’s “daily engagement with the Covagen team over coffee and lunch.”

	Bertschinger sees no reason why the merger with Janssen will diminish the Covagen culture. Of course, he’s encountered processes that make things move a little more slowly, but integration with a bigger organization “gives us access to resources in terms of expertise and money that we could only dream of,” he says. And he is positive about how big Pharma in general has become more open to external innovation, embracing novel platforms at an early stage. In just the last few years he has seen monoclonal antibody technology become a commodity in the industry. “Companies are now ready to run experiments like they do with Covagen,” he says.

	Now focused on establishing Covagen as a “highly productive R&D unit within Janssen that is compliant with the wider organization,” Bertschinger wants to see “how a big company functions and how you have to work in such an environment to be successful. ”Having advanced from complete business novice to leader of a high-value biotech in a few short years, one has faith in his ability to repeat this achievement within big pharma. He has proved he has the staying power to see an idea through to fruition, to battle through rough terrain until it becomes smoother riding. One of his favorite pastimes outside work is playing the violin. He took it up at age seven and, more than 30 years later, still rehearses every week with a university alumni orchestra. Clearly, when he commits to something, Bertschinger really commits to it.

Dan Dietrich, VP, Global Operation Services, Novartis

	A mechanical engineer by trade, Dan Dietrich has approached each new role in his 20-plus-year journey leading teams and programs in manufacturing, quality, project management, supply chain, and operations through the lens of what he calls the “Four Pillars.” Three of those pillars are solid and straightforward in their own rights: The position has to have a global impact; it must include a lead team that can work with and support Dietrich; and the role needs to be in an area new to him, so he can expand his learning.

	It is the fourth pillar in Dietrich’s criteria checklist, however, that may be the most defining in his career-where the now-VP of Novartis’s global operation services first started as a forensic engineer, performing car accident reconstruction.

	“Whatever I take on, it has to be broken,” says Dietrich, who, while earning a BS in Mechanical Engineering at the University of Colorado, served in the US Air Force from 1988-1994, working as an F-16 aircraft maintenance specialist. “I love to build teams up. I love to optimize or blow up the processes. Walking in when it’s just chaos-people are miserable and structure isn’t clear-to walking away and having people excited about what they’re doing and owning what they do, that’s where I have the most fun.”

	Rooted as an engineer, Dietrich, 44, has consistently followed the job philosophy of once a process is in control and operating at steady state, teams are mature and self-directed, it’s time to move on to a new role and challenge. He proudly dubs himself  “a process and operations guy,” skills he notes that are highly transferable. Dietrich is quick to point out that he’s never been a subject matter expert in his various leadership roles and doesn’t intend to be, instead relying on surrounding himself with such experts. For the results-driven Dietrich, his reputation and value has been built on creating new growth opportunities through the art of process redesign and organizational restructuring.

	Dietrich’s resume is rife with such examples, including when he took over as global head of operations and strategy for Novartis’s drug supply group in Basel, Switzerland, in 2009. At the time, the team, Dietrich says, had gone through a series of managers, was losing several subject matter experts, and was overall dissatisfied as a group. According to Dietrich, he approached this role the same way as the others, working with the operations team on either a turnaround strategy or a planning activity. He leaned on his experience to date in quality management models (he achieved a Six Sigma Black Belt in 2007), as well as his skills in empowering teams and installing a global cross-functional matrix leadership structure. Within six months, the external drug supply group increased productivity by 20% and team members reported via surveys of being much more satisfied, according to Dietrich. “Processes were globalized and defined for them,” he says. “Expectations were crystal clear for them, and now they owned the deliverables.”

	Another example occurred during Dietrich’s initial foray into the healthcare sector after transitioning from the automotive industry (he was launch program manger for Johnson Controls Inc. from 1997-2000, where he led teams in the US and Japan around the annual Toyota vehicle launch updates as part of Toyota’s joint venture with GM). In 2000, Dietrich joined LifeSpring Nutrition, a nutraceutical startup in Northern California focused largely on the aging population. He was originally hired into a sales and marketing role, but after LifeSpring lost its funding following 9/11, Dietrich was thrust into an operations role as general manager and would eventually be named CEO of the company. Charged with helping boost LifeSpring’s profits, he restructured operations and reduced operating cost by over 50%. It was here where Dietrich honed his skills in people optimization and started to merge his mindset around the two elements of empowering people and pursing operational excellence.

	“That was one of the best jobs I ever had, just because I learned so much so quickly,” says Dietrich, who before joining LifeSpring was considering pursuing an MBA. “One of my very close friends at the time shared with me her experience around getting an MBA and what that’s done for her and her career. She was working at [LifeSpring] and she said, ‘You know, Dan, either you can go to school and learn about it, or you can come work at this company with me and learn it and live it.’” 

	In 2003, Dietrich sold LifeSpring, and in parallel was pursued by Chiron Corporation due to his experience with Toyota. He was hired to lead the biotech’s end-to-end process optimization initiative. Dietrich’s team freed up more than $30 million in inventory for Chiron’s key Betaseron brand, and reduced manufacturing and distribution cycle times by 50%. Novartis acquired Chiron in 2006 and offered Dietrich the position of global head of the drugmaker’s PharmOps Operational Excellent program, based in Basel. Including his time heading up Novartis’s third-party clinical drug supply operations, Dietrich spent five years in Switzerland, often traveling between 10 manufacturing sites in China, Japan, Egypt, and Europe. In 2011, he returned stateside, where he joined clinical operations, based at Novartis’s US headquarters in New Jersey. After increased responsibilities, Dietrich was promoted to his current role, managing a centralized group that delivers services to the global and local clinical study teams for Novartis within the general medicines area. His organization provides support to the teams responsible for executing clinical trials, from startup to database lock, from executing the protocol to identifying which sites to use, to ensuring sites understand the protocol and attract the right patients. 

	Dietrich oversees seven teams encompassing 130 employees in the US, Switzerland, and India. The teams provide services in central analytics; vendor management; IT systems; quality control for data tools such as the trial master file (TMF) and the clinical trial management system (CTMS); study budget management; and clin-ops process improvement. The creator and system owner of TAPAS (Trend and Pattern Alert System), Novartis’s home-grown clinical data mining system, is part of Dietrich’s leadership team. The tool, he says, has transformed how the company conducts its risk-based and adaptive monitoring by providing algorithm and threshold-based scores of key risk factors for all current Novartis  trials. The operationalization of this tool and process globally is one of Dietrich’s greatest professional successes.

	“That’s a big field I’ve seen within just the last couple years of how can we manage big data, whether it’s coming externally or from our own internal systems,” says Dietrich. “How can we translate all that great data into knowledge to help us predict risk and take action and mitigate early?”

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Pharm Exec's Emerging Pharma Leaders 2015

In a knowledge industry like biopharma, people are the intangible asset that marks the difference between a status quo or standout performance. Pharm Exec recently convened a panel of industry team leaders and HR specialists at St. Joseph’s University Haub School of Business to parse out some useful best practices in three key areas: talent recruitment and retention; skills training; and workforce diversity.

The pharmaceutical industry is a knowledge industry. Knowledge is a function of human capital-the cumulative measure of native intelligence, learned skills, environmental awareness, and pooled effort that lead to improvements in the human condition. It follows that attracting a deep, diverse pool of in-house talent should stand as a top strategic goal for today’s biopharmaceutical enterprise-but is it? What is the current “state of the art” in promoting a productive, engaged and high-quality pharma workforce? Are we there yet, or is this just an aspiration?

 Recruiting, motivating, and retaining a strong management team is the most critical function of a leader today. It should be the first thing in mind when a leader sets objectives for the business. In pharma, the best way to build that momentum is by keeping your eye on the patient perspective. Conveying the message that we exist to make patients well is a powerful “force multiplier,” one that transcends our own individual agendas. It brings focus and acts as a moral compass to drive results.

	When hiring people, I pay less attention to the standard resume background than I do to intangibles like attitude and perspective. I’ve offered jobs to people with no

 direct exposure to biopharmaceuticals. I know people with impressive credentials in corporate finance who were able to transition to community-based service organizations dedicated to making people healthier. The lesson I bring is that, in this industry, the surest guide to making the right hire is whether a candidate really cares about patients. The patient is fundamental to understanding how our medicines are developed, marketed and used in the real world clinical setting. Being patient-centric also avoids the tendency of big organizations to turn inward, to be bureaucratic and inflexible. These are not the characteristics of an innovative pharmaceutical company capable of attracting the next generation of talent.   

Companies talk about connecting to patients, but is affinity to the patient really considered in the recruitment and talent development practices of today’s pharma HR function?

It is acknowledged as a factor. But it needs to be better prioritized. When discussing stakeholders, the fallback position of the “C-suite” is to cite the interests of the shareholder as paramount. I’d phrase it differently: when patients come first, profits tend to follow, which means the shareholder wins, too. There is also a strategic shift in customer attitudes favoring drug marketing that is less abstract and more hands on. The primacy of social media today puts a premium on authenticity and transparency, which requires a pharmaceutical company to build on the human connections available through the patient population. This can also serve as a formidable recruiting tool. Millennials are not only active users of social media, they are now the largest US population cohort, surpassing the boomer generation. Surveys show that millennials rate reputation and social responsibility very highly among attributes of a potential employer. A strong patient focus can be very useful in attracting the best among the next generation of industry leaders.   

Embracing the patient has to be framed in the larger context of embracing diversity. I don’t define this purely in ethnic, racial, or gender terms but also in recognizing that drug companies now must present themselves as an integral part of  healthcare. I’d like to ask Kay Brady how the hospital sector is approaching its own distinctive relationship with the patient.

Our mission is to serve an extensive network of patients in Lancaster and the surrounding communities of central Pennsylvania. This community is highly diverse in almost every measure. From an organizational standpoint, we took a first step seven years ago in hiring a vice president for diversity programs. Our first initiative was an in-house training program to foster cultural competencies among the work force. Our initial review was that while this training increased awareness, we still needed to understand more about the drivers that would lead to more inclusive behaviors. So we refocused on understanding how a broader perspective of inclusion could take us beyond the traditional definitions of diversity.   

	We conducted an employee inclusion survey that revealed a surprising conclusion about our priorities. Instead of what we thought would be a preoccupation with the demographics around age, gender, race, etc., the survey identified the biggest problem as a disconnect between what a colleague felt he or she was contributing and its impact on the larger group.  In particular, ideas and proposals perceived to be innovative or different did not always gain traction. Yes, our challenge turned out to be a lack of diversity of thought. 

	Bridging this gap has subsequently become a key element of Lancaster’s HR strategy. We developed HR training to help colleagues understand how personal styles at work differ and to navigate effectively in a world where change is a constant. More important, we added annual metrics around retention and talent development as well as including adaptability and emotional intelligence in the talent review process. I see these learned behavior changes as critical because hospitals traditionally operate on the basis of vertical structures that can reinforce “command and control” management. There is also an ingrained analytical mindset in the healthcare business. Being able to look beyond that and incorporate more subjective, qualitative thinking-founded on self-awareness, listening skills, and the willingness to acknowledge different perspectives in group settings-leads, in our view, to better decisions. 

It seems this approach fits well with the patient interest as the determinant of organization strategy.

Our target is indeed the patient. In contrast to my previous roles in the pharmaceutical industry, where the patient has no direct presence on site, at Lancaster Hospital I have eight floors filled with patients right above my office. We have adjusted our recruitment process to identify specific patient-centric traits in potential employees, like empathy and compassion. In fact, all interviewers have a list of patient-centered competencies that we developed to help everyone across the organization identify the right person and convince them to join us. And it’s not pure altruism at work here: reimbursement under federal programs like Medicare now depends on our patient satisfaction scores.    

How important are formal recognition and award programs in recruiting and retaining talent?

Lori Thorell, Worldwide Clinical Trials: 

It depends. These can either be wildly successful or a total rout, depending on how well such events are executed. Often, peer-to-peer recognition is more meaningful than a hand down from executives in the C-suite. In addition, workers are skeptical of award programs that try to include everyone. The recognition has to be perceived by the group as carrying value.  

Before we can recognize talent, we must determine what the industry needs in terms of professional skills and capabilities. Have these changed in the last few years? What is the ideal profile that you look for in filling the talent pool, particularly as the more experienced baby boomers begin retiring?

: The industry has undergone a sea change in the last decade. Employment has contracted due to the patent cliff, health reform has transformed the customer base and raised the leverage of payers, and, in a related trend, volume sales are tilting away from high-reward innovation-85% of all medicines prescribed here in the US are now generic. Most important, there is no obvious, universal solution to this disruption in the biopharma business model. This is why Otsuka’s talent planning is now focused on finding people who can manage through ambiguity-that is today’s required skill.  Past performance does not predict future success.

: My background is regulatory. I have worked in large pharmaceutical organizations, but my current firm is small-I am one of only 13 employees. What stands out for me is the capacity to be flexible-to adapt to circumstances in this era of so many disruptive innovations in healthcare. In my former roles, I was more of a regulatory strategist, focused on the clinical side. At present, my role requires exposure to nearly everything, from labeling, to contract manufacturing, to market intelligence-the entire gamut of regulatory operations. The conclusion I draw from my varied experience is that, regardless of size, biopharma companies overall are on a downsizing trend. They want people who can shift bandwidth and work with others just to get the work done.

Are the big pharma players really capable of shifting cultures to create a more versatile work force?

It is certainly harder. When I interviewed at Braeburn, the message was “we are recruiting you for regulatory, but you will not be defined by regulatory.” This means they are looking for a skill set that involves a willingness to take prudent risks, to step outside the boundaries of a formal job description. I also think this flexibility is appealing to people from larger companies affected by the competitive restructuring and job losses. This is expanding the career possibilities for those willing to handle the uncertainties in building a start-up company.  

: Lancaster Hospital has a different work force demographic than big pharma. Some 70% of our 7,000 employees are non-exempt, where wages tend to be lower. Nevertheless, even here the skills requirements are significant, especially as we implement the employee health record (EHR). Education and training in the use of this technology has been underway for the last four years. At the start, we were forced to invest heavily in recruiting a strong IT staff, along with the incentives required to retain them. Today, we are at the point where all our employees are comfortable with EHR. We have identified leadership skills for our in-house clinicians as another priority. The physician spends his days in a world framed by short, 15-minute interactions where an assessment is followed by a diagnosis, after which he or she moves on to the next patient. Business and management acumen is not taught in medical schools, which is one reason we are partnering with St. Joseph’s Haub Business School on a customized MBA curriculum for our clinicians. 

So the skills curve is definitely increasing? Can you describe your metrics of success?

Yes. We get 17,000 applications for around 1,500 positions per year. Our basic tool is a “hire to fit” system that matches candidates with a set of essential competencies for each position. It’s basically a profile founded on the historical characteristics of people who were successful in that position. Twenty percent of this evaluation covers emotional intelligence markers like empathy, compassion, and patient focus. It demonstrates how serious we are in creating a mission around the patient. In addition, 40% of our openings are filled internally.  To build the ranks, we launched a high-potentials evaluation track to groom clinicians for management and administrative leadership positions. We can take a nurse and offer him the opportunity for a slot in finance, after which he can move on to IT. The result is an employee more valuable to us than limiting him to a nursing role.   

	In regard to metrics, we initiated a program in August 2014 to track our hiring decisions to the 90-day and one-year staff turnover rate. That’s our basic ROI-making the right hiring choices preserves our talent pool and keeps personnel costs down.  

The cost of recruiting a new staff member and then training the person in functional skills and adapting to the culture can only be amortized over time-a staffer who leaves in six months or a year is actually a net financial loss to the organization. 

Biopharmaceuticals has traditionally been seen as an “insider” business. Is the preferred capability set shifting toward the external-is familiarity with adjacent sectors like consumer retail now seen as an asset among potential industry hires?

The imperative today is to differentiate your products by offering superior value.  You have to stand out and that in turn requires the capacity to move away from old ways of thinking. Recruiting talent from different backgrounds adds an element of internal tension that can result in a better decision.

  Given my background in clinical research operations, I have always looked at pharmaceuticals as a service industry.  When we hire people, we take technical competence as a given, or a set of skills that can be taught or transferred.

 The real stand out, intangible factor is cultural fit. Will the candidate aptly reflect the values the company is seeking to project?  Someone from a different sector background may actually present those values better than a veteran who has been doing the same thing in pharma for years.   I was at a large CRO for 17 years, but just recently decided to make a change,  moving to a company one-tenth its size:  my new employer, Worldwide Clinical Trials, has 1,400 employees, while my former employer had more than 14,000.  I ended up here because I would have more autonomy and influence in a highly specialized, flexible organization. I now tout these values as my own in representing my new company with clients.

Other than cultural fit, what are the critical skills that you see emerging in clinical trial operations? I understand there is a growing need to tease out underlying trends that may not always be apparent with a cursory reading of trial data. So how do you recruit for curiosity?

As the volume and complexity of data expands, requirements for positions in clinical trial research are changing at warp speed. Disruptive trends like the adoption of the electronic medical record as well as the breakdown of the traditional patient/physician relationship in favor of informal health providers like Walgreens or CVS mean that the model for clinical trial research must change, too. Technology and big data are going to raise the ante on human interpretive skills-the capacity to make sense of vast, disaggregated flows of information-and curiosity is a flag for that. We need workers who are flexible to change along with the opportunities that technology presents to us. Hence, when we recruit we look for evidence of thinking that comes “out of the box.” 

We’ve identified why and how pharma must update its criteria for recruiting and retaining management talent. The key question is whether this awareness is actually changing the mindset in the leadership C-suite. Do they get it or is there a problem in executing around the poles of awareness, diversity, and inclusion?

The CEOs I speak with through the Get Together Group are acutely aware of talent recruitment issues and the importance of building a more diverse and flexible workforce. If there is a problem, it lies with translating this support into something doable on the ground. 

If this is part of a CEO’s own agenda, and the resources are adequate, then the organization will likely move forward. The big danger is having good ideas get lost in translation. There is not always the discipline to have deeper conversations around capabilities. You require this to build a true leadership program that focuses on institutionalizing these capabilities throughout the organization.   

	All the talk about finding and keeping talent is occurring at a time when the basic license to operate for a healthcare supplier like Lancaster General is undergoing a major transformation. We face what banking and pharmaceuticals faced 10 years ago. The number of healthcare delivery networks in place five years from now will be fewer than what we have today. Scale is going to change everything. We need different capabilities. Our CEO recognizes that. While practicing physicians will continue to dominate our talent base, the way we train and motivate them is changing.  

What do we mean by talent retention?  Is this a dynamic process, where we expect that the supply of talent will ebb and flow depending on circumstances?

Talent retention is not a mandate to keep everyone. Our discussion so far indicates a consensus that organizations benefit where there is a periodic restocking of human capital. There is healthy turnover and not so healthy turnover. Like everything else, strategies around keeping good people are changing. The common practice for years was to identify and differentiate the best talent and give them exposure to a variety of challenges, after which most will opt to stay with the company. Today, numerous studies favor a different approach, based on the premise that the relationship between a high value employee and his manager is a more reliable indicator of whether someone will stick around or not. If you don’t get along with your manager, you aren’t going to stay with us. Hence, our efforts have switched to helping to drive that critical reporting relationship in a mutually positive direction. We are training our managers today in the virtues of being a strong team leader.  It’s about how to lead, not how to manage. There is a subtle but important difference.

We need to be cautious about the label “high potential.” Just because someone is performing at a superior level in their current position does not guarantee he or she will excel in the next position. You can be a very productive salesperson but overcompensate in managing others who may not be as good at the art of selling as you were. 

Work in biopharma today is organized around teams-the era of the individual “star” is over. How does HR promote team-based behaviors?

The first thing we do is make a conscious effort to help staff our teams with the best and most appropriate people. I am regularly approached by cross-functional team leaders for access to our talent management system to match assignments with competencies. Our list of high potentials is also made available. The second item is using MBA programs like our relationship with St. Joseph’s to train our people in “soft” management capabilities like influencing, coaching, negotiation workshops, and war games. HR also runs an open enrollment aspiring leadership program to help colleagues determine whether that track might be for them. 

One little noticed aspect of team effort is the modest degree of control a leader or a group has in executing around the project. Collaboration can lead to inertia if the responsible contributing functions and capabilities are not clearly defined. A matrix structure overcomes that by channeling resources across the full organization. You encounter less uncertainty about what is required to get the job done, so I think the matrix is an important element in empowering a team.

Is there a predominant culture theme in the biopharma industry today?  Can this culture be summarized in a single tag line-participatory, inclusive, innovative, risk-averse, bureaucratic or global?

Culture in the pharma industry is most often associated with bureaucracy. It was always built on the idea that the industry is unique: there is a right way to do things in biopharma, and a wrong way. That’s what the culture teaches us. The biotechnology sector is different, and is probably doing the best at building a culture that is not bureaucratic, since these companies are smaller and need to stay nimble. They carry more risk while competing against the resources of the integrated big pharma giants.  

  Culture is important because it provides a rationale for differentiating the firm in a crowded marketplace. It’s a shorthand way of defining how the company operates in a global context-and what the values are that get people of different gender or race or nationality into the workplace every day. Let’s not forget that a strong internal culture can be a significant recruiting tool. The best job candidates are going to evaluate the company culture in terms of whether it is a good fit for them. They want a culture that will allow them not to survive, but to thrive.

I’d like to ask Kay Brady what happens when she presents her talent development and leadership programs to the C suite for op plan/budget approvals? Must you document a specific ROI?

I get the occasional push back on ROI, but our CEO is the champion of Lancaster General’s talent and leadership initiatives. He has a clear understanding of the power of our people as a driver of financial and shareholder performance. As individual success stories have proliferated, and as our succession planning reaches down through three layers of talent, buy-in from the top has only increased.  

In a broader sense, how have talent programs adapted to a shrinking work force in biopharmaceuticals? More than 200,000 high paying jobs in the US industry have disappeared since the great recession of  2008-2009. Have talent programs come to be perceived as a frill?

Several things have happened. First, the purpose of any talent retention or development program can no longer be vertical-to push people up the ladder. Frankly, there are no longer enough slots to reward talent with promotions. The focus must be instead on encouraging people to consider horizontal moves that expand their skill set and offer opportunities to work with colleagues from different backgrounds. The second change is that no one assumes that high potentials will stay with us for a lifetime. We aren’t going to keep people forever-that’s a given in today’s shifting workforce. Finally, work/life balance is becoming the dominant factor in keeping employees productive and happy. Our data shows that when work and life is not in balance, people start looking for options elsewhere.

The shift is really around defining success as a goal. Career advancement is no longer a linear process. Success cannot be measured through the title or job description of your next position. It is all about incorporating different experiences, moving into new geographies and finding new skills. Those skills may-or may not-lead to a more senior position. Instead, it’s about the journey. Both the employer and the employee must be transparent about that and to manage expectations. People have to be encouraged to see that a role as “executor” is just as vital and important to the company’s future as that of the strategist. 

What about programs to promote greater diversity in employment? Is diversity valued more in large biopharma companies than in smaller firms?

: I have witnessed firsthand many initiatives to promote workplace

 diversity. We tend to address the issue in the same way as other strategic challenges: we identify what needs to be done, create a plan and convene a team to execute around a specific target.  Experience suggests that is not a sustainable approach. There is too much attention to achieving a number.  The real driver of change is how well we relate diversity programs to the bottom line. Making that connection between diversity and commercial results-with data-based metrics to confirm it-is the only way to change behavior. I also believe that diversity initiatives must be integrated within a larger program geared to building and retaining talent. Diversity is not a side bar activity. 

Are there any final messages that bear exploring? What would you say to your CEO on gaps or issues that require his or her direct attention and support?

There is a tendency in HR to set multiple goals-trying to do too much. HR has to be clear and focused on what it intends to achieve through the planning cycle. For Lancaster General, that is identifying and building the capabilities of our workforce in a manner that advances our overall business strategy. How does what we do fit with the organization’s strategy? Be clear and don’t be hesitant to say “no” when an idea just doesn’t fit. 

That clarity also has to be ingrained within the performance evaluation process.    

Teams will continue to be central to how the big biopharma companies make decisions and execute around them. Teams are living organisms. One way to perform better is to make every member of a team feel that he or she is outstanding-part of a high-performing group. In addition, teams need an internal sponsor or champion, one who can help run interference when the group encounters various types of bureaucratic delays.

  A clear purpose and specific deliverables is still the overriding determinant of a successful team. But a sponsor is still important, particularly if that person has the clout to ensure the team will not get lost in the organization chart. It is especially needed when the team is seeking to do something that is innovative or disruptive.

The message that resonates the most to me is moving from diversity as an organization objective to diversity as a business imperative. Hiring and retaining a work force around the commitment to diversity as an end result is not just an exercise to move up the rankings in competition with other company HR departments. We must show that those companies who are most diverse are also companies with a superior ROI, expressed through business results that outpace the competition.

There is no shortage of talent in the biopharma field.  What will determine commercial success is how well a company develops that talent.  You have to invest in your people, not only with the financial resources and incentives they need to thrive but in fostering a cultural attitude around continuous learning.  Keeping people on the cutting edge, exposing them to new ideas and “stretch” goals, with an appropriate tolerance for failure, is more important than in-house skills training.  This latter is the traditional way, but in a business world that no longer has any clear boundaries between the right and wrong path, you have to give allowance to learn in uncommon ways.  That can include tapping into best practices in other, adjacent industries beyond pharmaceuticals.

's Editor-in-Chief. He can be reached at 

Building Tomorrow’s Biopharma Workforce

	Recent activities by investment firms, in particular those of Kyle Bass, have biopharmaceutical companies crying foul and seeking relief from Congress. The actions generating angst among industry insiders are investment firms filing inter partes review (IPR) petitions seeking to invalidate biopharma patents. For a life sciences company that falls within an investment firm’s crosshairs, an IPR has the potential to wipe out a patent critical to a drug franchise’s revenue stream.

	The America Invents Act (AIA) of 2011 created new post-grant review proceedings that allow a petitioner to ask the United States Patent & Trademark Office (USPTO) to reconsider whether it should have issued a patent. An IPR allows a petitioner to submit a petition along with evidence from experts to explain why earlier printed publications or patents disclose the invention or show that the claims encompass an obvious change. The rules governing IPR proceedings make it an attractive way to challenge patents. First, any entity can file an IPR petition-the patent owner need not have threatened the filer with infringement. Second, the USPTO will define the claims using a standard that will likely result in a broader construction than if a district court heard a challenge. Finally, the USPTO only requires a challenger to show by a preponderance of the evidence (“more likely than not”) that the prior art discloses the invention. This standard is lower than the district court standard, which requires clear and convincing evidence of invalidity. These rules have motivated many entities to challenge patents using an IPR. 

	 Under these rules, petitioners have had success in having the USPTO cancel at least some claims in over 75% of the proceedings that reach final decision. Although the majority of IPR filings deal with patents in the high-tech industry, several biopharma patents have confronted IPR petitions. Generic drug companies seeking to market copycat products have submitted many of these petitions. But investment firms’ uses of IPR against biopharma patents have garnered the largest reaction.

 The straw that broke the camel’s back?

	The Coalition for Affordable Drugs and Hayman Capital Management, entities related to Kyle Bass, have filed several of these IPR proceedings. Kyle Bass asserts that he filed these challenges to prevent drug companies from extending patent protection and associated higher prices for products based upon questionable patents. But altruism may not be the sole reason for Mr. Bass’s filings. It is thought that the Bass entities have taken short positions in companies that rely upon the challenged patents to protect drug franchises. This investment strategy may pay dividends if the challenged patent protects a drug franchise that generates a majority of the revenue stream for a biopharma company.  In fact, the first such filings by the Bass entities may have succeeded under this scenario. In February, the Bass entities filed challenges against two patents owned by Acorda Therapeutics covering its 

 franchise. The first filing caused about a 10% drop in stock price, while the second caused about a 5% drop. Surely, those holding a short position on this stock welcomed the drops the filings appear to have precipitated, while Acorda and those holding a long position in the company were likely blindsided by these events.

	The Bass entities have not limited their petitions to Acorda. They subsequently filed petitions against patents covering Shire’s 

. Investors’ reactions to these filings appear mixed. Some of the challenged companies’ stocks rose while others fell around the time of the filings. For those that closed lower, the drops were not as pronounced and long-lasting as those experienced by Acorda. Thus, with the potential exception of an April 1 filings against Shire’s patents, those holding short positions in the challenged companies may have found it difficult to profit from the IPR filings. 

	The filings by investment firms have caused many in the biopharma industry to seek the assistance of Congress to address what they perceive as a misuse of the post-grant proceedings created by the AIA. Recent testimony by Hans Sauer of the Biotechnology Industry Organization (BIO) evidences this view. In March, Sauer testified before the Senate Judiciary Committee about what he described as “misuse of the patent system” to support “investment schemes” by a “hedge fund.” According to Sauer, biotech companies are particularly vulnerable to these schemes because they “tend to be small, derive most of their revenues from one or two products on the market, and have a handful of very valuable patents protecting those products.” 

	Congress has taken heed of the industry’s complaint by proposing legislation that may address the concerns. The Protecting American Talent and Entrepreneurship Act (PATENT Act) started as a bill in the Senate to address concerns about “non-practicing entities” seeking to enforce their patents in federal district courts. The House of Representatives is considering the Innovation Act, which also seeks to raise the bar on “non-practicing entity” patent suits. Many companies in the high-tech field have championed such reform. As initially drafted, neither the PATENT Act nor the Innovation Act included provisions seeking to reform post-grant proceedings.

	Recognizing that the PATENT Act appears to have sufficient support to pass Congress, members of the biopharma community have thrown their support behind it, but have highlighted the need to add provisions that level the playing field in post-grant proceedings. The industry has proposed revisions that seek to make it more difficult for a challenger to institute an IPR and ultimately prevail in showing a patent claim invalid.  Examples of the proposed changes advocated by those in the industry can be gleaned from recent testimony provided to the U.S. Senate Committee on the Judiciary.  Henry Hadad of Bristol-Myers Squibb succinctly put forth several proposals that minimize some of the risks that post-grant proceedings present to biopharma  patents. These proposals include affording patent owners more opportunities to submit evidence, aligning the claim construction used by the USPTO with that applied by district courts, and applying a clear and convincing evidence standard to prove invalidity.

	The Senate has responded to the pleas of the industry by amending the PATENT Act to include some of the provisions suggested. The amendments include allowing patentees additional opportunities to submit evidence before the USPTO decides whether to institute a proceeding, applying the same claim construction standard as a district court and allowing the USPTO to deny institution of the petition if it will not serve the interest of justice. Although not in the current version, there has been some discussion about modifying the PATENT Act to prevent the use of post-grant proceedings against patents involved in challenges under the Hatch-Waxman Act or Biologics Price Competition and Innovation Act. But the House version of patent reform has not adopted any changes to post-grant proceedings other than to craft rules that will prevent investment firms from initiating a challenge.

	 The use of IPR proceedings by investment firms has highlighted the threat that current post-grant proceedings present to biopharma companies. This threat flows from petitioners’ successes at invalidating claims through IPR proceedings as compared to the expected success in a district court challenge. The amendments to the PATENT Act proposed by many in the industry should more closely align the success rates seen in IPR proceedings with those in district courts, while still maintaining the low cost and quick resolution of patent disputes sought when Congress created post-grant review proceedings. Although the Senate has accepted many of the industry's proposals, the House has not. Hence, the industry will need to lobby members of the House to prevent the success in the Senate from dying on the floor of Congress. Further, the industry should continue to lobby members of Congress to seek a prohibition against using post-grant proceedings in generic and biosimilar challenges. This would insulate a drug franchise revenue stream from challenges in a petitioner-friendly forum.

	Until the drug industry convinces Congress to modify the post-grant proceeding rules, it is vital for those in the industry to factor post-grant challenges into their business planning. These proceedings provide a competitor a lower hurdle to offering a competing product. Further, the competitor can bring a challenge at any time, increasing the need for a patent owner to conduct due diligence earlier in a product life cycle to ensure strong patent protection. When acquiring drug products, a company will need to consider whether a post-grant challenge has the potential to devalue the acquisition. Finally, a drugmaker will have to modify its thinking as to what patents may be vulnerable to a challenge. In the past, only those entities potentially subject to an infringement suit had a meaningful path to challenge a patent. Thus, a patent owner could evaluate the market to identify whether a potential competitor existed. That has changed with the introduction of IPR proceedings because any entity can bring a challenge. A biopharma patent owner can no longer simply ask if there is another company out there that wants to sell a competing drug. In considering that a larger cast of characters exists that may challenge a patent, a patent owner will have to conduct due diligence on additional patents or accept the possibility it may be drawn into a patent battle it never saw coming.

 is a partner at Mayer Brown. He can be reached at 

Columns

Challenges from investment firms to biopharma patents spur the industry to action to protect its drug franchises

Confronting the Post-Grant Threat

	The FDA program to expedite the development and approval of innovative drugs for serious and life-threatening conditions is a great success, but determining whether an experimental compound has real transformative potential is proving to be a challenge for sponsors and for the agency. Expert

 review teams in the Center for Drug Evaluation and Research (CDER) and the Center for Biologics Evaluation and Research (CBER) are meeting deadlines and goals for assessing breakthrough designation requests and for expediting reviews of these products, but the process is resource intensive and raises questions about how FDA can keep up with the deluge in candidates.

	When the breakthrough program was established as part of the FDA Safety and Innovation Act of 2012, advocates envisioned about 2-3 designations a year. As of the end of May, the agency had received 308 requests for breakthrough status and had granted the designation for 90. Nearly 15 important new therapies have come to market more quickly as a result, contributing to the recent rise in new drug approvals. FDA acting commissioner Stephen Ostroff pointed out at the annual meeting of the Food & Drug Law Institute (FDLI) in April that two-thirds of the new drugs approved last year took advantage of at least one FDA expedited review program. 

	The popularity of the breakthrough drug initiative is not surprising, as it offers extensive hand-holding by FDA experts that can cut years off development, and the agency is approving market applications for certain “home run” treatments in less than six months. This helps patients gain faster access to life-saving therapies and treatments for serious conditions. The breakthrough imprimatur, moreover, is particularly important to small firms seeking to attract attention in the investment community.   

	The large number of breakthrough requests and a denial rate of more than 50%, however, is prompting FDA and stakeholders to weigh options for refining and clarifying breakthrough criteria to create a more manageable program. The agency is examining past designation decisions and why it turned down certain requests to see if the bar is too high or too low and how to better educate industry on which promising experimental products really qualify for breakthrough status.

	FDA “can’t sustain a program where everything is a breakthrough,” commented John Jenkins, director of CDER’s Office of New Drugs, at an April workshop on breakthrough therapy designation criteria organized by the Brookings Institution. Really fast development should be possible for true breakthrough candidates that demonstrate large treatment effects and can be easily measurable in small populations. But FDA has to devote extensive resources to evaluating designation requests and to supporting the development and accelerated review of breakthrough candidates. Kay Holcombe, senior vice president of the Biotechnology Industry Organization (BIO), agreed that some products are “more breakthrough than others,” and that clearer definition of “substantial improvement” and what is “transformative” would be helpful.

	CDER deputy director for science operations Richard Moscicki offered the possibility that FDA could either limit the number of breakthrough candidates, or strive to evaluate these products more efficiently. FDA is working with stakeholders to assess the reasons for designation denials and to encourage companies to limit breakthrough requests to therapies that offer truly substantial improvements in patient care. In addition, industry may provide specific funding to support the unexpectedly large breakthrough program, an issue that is slated for discussion as part of the next round of drug user fee negotiations.

	An internal FDA assessment of breakthrough designation requests and denials for 2012-2014 indicates that large biopharma companies are more successful than small firms in gaining designations; that most submissions provide data from a single Phase I or Phase II clinical trial; and that submissions with a prognostic biomarker do relatively well. Randomized clinical trials are not necessary to gain breakthrough status, and trial size depends on the specific indication and nature of the product. Denials of breakthrough designations are more closely linked to problems with the design and analysis of clinical data, as opposed to a failure to show substantial improvement over available treatment.

	Sponsors also withdraw about 15% of breakthrough designation requests before they receive the agency’s decision. This occurs for a range of reasons, and further analysis could help improve program processes and reduce wasted efforts on all sides.

	Karin Van Baelen, head of global regulatory affairs for Janssen Pharmaceuticals, noted at the Brookings workshop that her company had a very positive experience with the breakthrough designation process, but also

 received a denial on a project that perhaps was “overly ambitious” and based on a too-small sample size. "The experience has helped us better understand the breakthrough criteria," she commented, and provided “very valuable feedback” on developing that compound further. Companies should exercise some self control, she added; submitting everything for breakthrough status wastes the firm’s resources as well as FDA’s.

	Meanwhile, programs to accelerate approval of important new drugs are expanding globally. Japan, for example, has established the SAKIGAKE designation program for innovative medicines and medical devices that are developed first in Japan and offer “radical improvement” over existing therapies to treat critical diseases, explained Yoshihiro Matsuda of Japan’s Pharmaceuticals and Medical Devices Agency (PMDA), at a CMC workshop in April sponsored by the Drug Information Association (DIA). Matsuda described a greatly accelerated development and approval process for such therapies, combined with stronger post-marketing oversight.

	Refining FDA’s breakthrough program is challenging, as the agency finds wide variation in trial characteristics, patient populations, and available therapies for different treatment areas. Thus, FDA analysts can only approximate a “substantial improvement threshold,” but hope to better identify patterns and characteristics that will signal therapeutic success.

's Washington correspondent. She can be reached at 

FDA wants pharma to be more selective in seeking special status for promising therapies

Too Many Breakthroughs?

-our eighth to date-is not only a way to recognize a few individuals who’ve made a difference in their organizations. It also serves as a barometer to track larger changes in the workplace: how work is done; who does it; and for what outcome or purpose. With

’s Editorial Advisory Board (EAB), we’ve selected 17 executives drawn from a range of mission-critical functions, varied geographies, and diverse race, gender, and cultural characteristics. Together, they symbolize the sweeping changes our industry is undergoing, from an era where growth was the assumed baseline for all management decisions to a future of iffy margins and bitterly contested market share.  

	This year’s group knows better than anyone that a frayed business model quickly concentrates the mind. So what are the trends and values that will determine true leadership in big Pharma for the remainder of the decade? We’ve distilled five of the more interesting insights, as follows: 

 Teams are reflective of how work gets done in large organizations facing complex challenges that rarely can be addressed with a single set of capabilities. Team performance is critical to organization P&L because it is the team that creates the context and sets the baseline for decisions taken by senior management. The team is also the arena for individual career advancement. No one mentions it, but team meetings can also be a graveyard for reputation. In big Pharma bureaucracies, what was once the right way and the wrong way is now the way of the multiple choice. It’s easy to stray, so a deft hand in internal politics has become a necessary navigational skill. 

 Leadership today is a collective exercise, amounting-almost-to an abnegation of the self. Our 17 EPLs are parsimonious in using that first person pronoun. The emphasis is on other-directed qualities like empathy and listening. It should be no surprise when leaders discover what their team members actually feel about them. In contrast to the command and control methods of a previous era, our 2015 leaders are more willing to let others carry the flag to ensure everyone is invested in a positive result. As one EPL notes, “if I can take credit for anything, it’s that I hired well.”   

The key emotional chord in today’s pharma workplace is to convey a sense of urgency.

 The role of a leader must not be confused with handing out trophies at the country club. A balance has to be struck. But that urgency has to be laced with a larger sense of purpose. Our EPLs call it “hard empathy”-being tough-minded on standards but tender-hearted and hopeful in relationships. The essential mediating ingredient is decisiveness. It’s still true that pharma leaders don’t progress by going wobbly. “Analysis paralysis” remains a curse in any organization.    

The best innovations are often a consequence of a workplace failure.

 A repeated theme in the interviews is that good organizations impose no sanctions on failure. Making mistakes is “part of the job,” and what counts is a willingness to turn a setback into a “best practice” that can be shared with others as a mid-course corrective. Management will need that approach to navigate through changes that are becoming harder to account for in advance. 

 Raptor’s rare disease CEO Julie Smith said it best in making reference to her ever-present canine companion, Ninja: “Dogs are an important part of the culture here.”  

	Finally, our annual Emerging Leader profile is complemented by a separate feature this month-a Roundtable on the themes of talent and diversity in tomorrow’s biopharma workforce. Executives from two big Pharma companies, a start-up biotech, a leading Pennsylvania-based hospital system, and an HR diversity specialist met at St. Joseph’s University Business School on April 10 to consider what’s needed to ensure our industry has the people to stay profitable in a fast-changing marketplace.  

	One interesting dynamic emerging from the discussion is the competition traditional pharma faces from an invigorated biotech sector flush with the momentum of a hundred IPOs. Nimble biotech has the hands on business model-and the cash-to vie for big Pharma professionals disgruntled by a seemingly endless cycle of restructuring and consolidation. A second point of consensus is that workforce diversity must be given higher priority internally, as a business imperative instead of an HR objective. And what we mean by “diversity” must stretch beyond the obvious aspects of gender, race, and ethnicity to incorporate true diversity of thought-because, regardless of where it comes from, the single biggest premium for our industry is a good idea.  

From the Editor

Amid the release of our eighth list of Emerging Pharma Leaders, it's fitting to take a look at the trends and values that will determine true leadership in big Pharma in the years ahead.

The Human Chain: The Emerging Pharma Leaders

	This sponsored supplement was produced by Focus Reports. Project Director: Cameron Rochette

	Project Coordinator: Gabriela Córdova, Alina Cotfasa Project Publisher: Mariuca Georgescu

Since 1995, Peru's pharma market has grown fivefold, and today is worth USD 2 billion. During this period, Peru's economy has emerged from the shadows: with an average annual growth rate of five percent during the period, even managing eight percent during the global financial crisis. But how exactly did the country come to perform so well, especially considering the economic volatility experienced by many of its neighbors over the same period? And what does this mean for the pharma industry? 

	Aldo Defilippi, executive director of AmCham Peru, says that since the 1990s the country has enjoyed a relatively steady government administration, which has contributed to not only strong economic growth but also a much larger middle-class population. "The stability of Peru's fiscal accounts, currency and laws for the last 25 years has created growth, reduced poverty, increased exports and has developed the country," he notes. "These characteristics are distinctively different compared to previous decades in Peru that had high inflation and fiscal deficit."


	Aldo Defilippi, executive director, AmCham Peru

	Furthermore, the establishment of over thirty bilateral investment treaties with nations across the globe has led Peru to a significantly more competitive position worldwide for investment; between 2002 and 2012, foreign direct investment (FDI) increased from USD 3 million to USD 12 million. "The openness of Peru to trade has encouraged the country to concentrate on those products that are best produced here and to import products of low cost and high quality," remarks Defilippi.

	Many multinational companies with a long-standing presence in Peru used to have factories in the country; since the 1990s all of these companies have closed their facilities as part of a consolidation process to other larger countries in the region like Mexico, Brazil or Colombia. Nevertheless, the fivefold growth of Peru's market between 1995 and 2010 to a market today worth USD 2 billion represents a sizeable opportunity for pharmaceutical companies with a South American presence.


	Guillermo Browne, director general, MSD Peru

	This growth took a slight nosedive in 2014, when the market experienced a cleansing of sorts. "Wholesalers and pharmacy chains found themselves with high inventories, and they needed to find some logistical efficiency in their own distribution systems," notes Guillermo Browne, director general of MSD Peru, which had to make adjustments as did most research-based companies in the country. "In 2014 the market decreased around two percent in volume and six percent in its value in US dollars. In that kind of environment I had to make some immediate structural changes. Last year was ultimately successful but more because of institutional sales rather than retail."


	Javier Castro, managing director, Boehringer Ingelheim Peru

	"Historically, pharmaceutical companies used to aggressively push merchandising through every channel possible," says Boehringer Ingelheim Peru's managing director Javier Castro. "Big chains started to reduce inventories, resulting in a significant decrease in many companies' retail sales last year. The country's commercial dynamics have strengthened sales channels to be more efficient, especially in managing inventory approaches."

	Peru's constitution does not permit price control, essentially creating a free market scenario that poses problems for major international pharmaceutical companies that generally offer higher-priced products. "Research-based companies do not sell to the government on public bids," says Augusto Rey de la Cuba, executive director of Asociación Nacional de Laboratorios Farmacéuticos de Perú (ALAFARPE), the association for research-based pharmaceutical companies operating in the country. "They only do direct sales because of the price. ALAFARPE's member companies simply cannot compete with local prices or the prices of Chinese or Indian companies present in Peru. There is a system in Peru for corporate bids in which the Ministry of Health, EsSalud, and the national army buy medicines together annually in an attempt to improve prices."


	Augusto Rey de la Cuba, executive director, ALAFARPE

	"Free pricing is not the perfect solution in an unstructured market, and people do not know what the real price is versus what they should pay," adds José Antonio González, general manager of Roemmers Peru. "I too would like to have nice prices and a big market, but I have a small market."

	Furthermore, many pharmaceutical companies face complex challenges when it comes to Peru's regulatory system. Until 2009 for example, the legal time for approving new drugs, including biologics, was seven days; in 2015 approvals can take up to three years. For years, the system was largely unregulated, but serious efforts to alleviate this regulatory conundrum in recent years have been met with varying degrees of success.

	"The implementation of Law 29459 (also known as the Law of Pharmaceutical Products, Medical Devices and Sanitary Products) in 2009 focused on transforming an unregulated market into a more secure, quality-based healthcare model," notes Cesar Amaro, director general of Dirección General de Medicamentos, Insumos y Drogas (DIGEMID), Peru's regulatory agency. "This new law focuses on the regulation of biotechnological and biosimilar products which represent an important area for development. This law also pays attention to the interchangeability between brand generics and patent protected drugs." As such, the idea was for this Law to set new standards on approvals as well as ensuring better quality, efficacy and safety of health-related products. This has been particularly important in recent years as the government has been looking to purchase biosimilars, which many in both the private and public sectors will cut expenditure costs significantly.

	"Patients look for affordable medicine, and so does the government," says Akhilesh Vijay, general manager of Accord Healthcare Peru. "But this will not add long-term value to patient treatment. When biosimilars are newly registered, we need to produce safety and efficacy studies. As a responsible generic player Accord carries all the requisite studies. The current scenario demands DIGEMID to reach a consensus on fast tracking registration of biosimilars on the availability of such studies. Bioequivalence studies are not a requirement in Peru at the moment but they should be, and Accord can provide these as well."

	"Our strategy is to establish more therapeutic segments and grow with our biosimilar portfolio in this market," Vijay mentions. "Biosimilars represent a significant Business in Peruvian institutions. Only certain companies with sophisticated technology can offer biosimilars. Adoption of stricter norms by DIGEMID including GMP inspections will slowly wash off inferior products from the market, and pave way for high end generic products. Competition will boil down to few players, and thereby only affordable and quality products will be made available to the patient community."


	Akhilesh Vijay, general manager, Accord Healthcare

	Oscar Seclen, commercial manager of Janssen Peru and president of ALAFARPE, also points out that the development of new molecules in the country is becoming more commonplace among pharmaceutical companies, although there is still much work to be done. "New laws are instigating clinical research in our country," he remarks. "Starting from the public domain, there is a lot of recognition for innovation; still, the investment levels are low if we compare them to countries abroad. This is where a huge opportunity appears just before our eyes and the private sector becomes necessary. As a guild, ALAFARPE acts as a catalyst for the private sector to reach its full capacity by providing recognition for what we consider outstanding research and innovation. The authorities have a very important role in all of this; they are the ones that need to set the right conditions and stage if we truly want to become an innovating country."

	Peru's healthcare system was largely underdeveloped for many years; but the country's newfound fortune of recent years has allowed for a significant overhaul and reform of the system.

	However, the road to a comprehensive and universal system is rocky. Peruvian Congressman Gustavo Rondón, secretary for the Committee on Health and Population, notes that the budget for healthcare in Peru is one of the lowest in Latin America. "As such, we must prioritize investment in this area efficiently. Peru often gets ahead of itself with technological developments or innovation, while we still need to implement the basics. We become idealists; we want the latest technology, but in reality that will only reach a few people. We should be more practical than theoretical by putting norms into practice and allocating more personnel and equipment."


	Gustavo Rondón, secretary for the Committee on Health and Population, Congress of Peru

	One of the key goals of Peru's Ministry of Health is to now provide universal health coverage for all Peruvians by 2021. Between 2011 and today, the number of affiliates associated with Seguro Integral de Salud (SIS), the public health insurance agency run by the Ministry of Health that provides access to basic health services to unemployed Peruvians and those unable to pay for social security or private insurance, has increased from 12 million to 15 million, nearly half of Peru's entire population, in part due to increased funding for the agency. With 25 percent of the population without any access to social protection today, there is still a great deal of work to be done to ensure that universal coverage is reached.

	Leading the charge in this endeavor is Pedro Grillo, chief of SIS. He has an immense weight on his shoulders to not only ensure universal coverage but to guarantee that the system is sustainable to maintain this coverage by improving the infrastructure, services and security of Peru's public health institutions. "To introduce the process of universal insurance reform in Peru, we must revise our benefit plans to suit the needs of our policyholders," Grillo stresses. "We have introduced a performance-based model exchange with other public institutions such as public hospitals and regional health facilities. We also exchange services with EsSalud (Peru's social security) and we purchase services to private providers of health services, in order to grow our supply base for our members."

	Moreover, the Ministry of Health announced a USD 3.5 billion investment in infrastructure projects in November 2014, aimed at revamping old hospitals with crumbling infrastructure and building up to 50 new hospitals within five years. This investment has received mix opinions among various stakeholders, but certainly provides good opportunities for the private sector.

	"We are now starting to see brand new public health centers pop up across the country, in places like Piura, Chiclayo, Tumbes, Cuzco, Arequipa or Tacna," states Carolina López-Torres, general manager of Hospira Peru. "Consequently, I think we can compete with other Latin American countries' hospitals. This is great news for us and for industry; now is the moment to invest and support the sector. Contracts with foreign companies with more experience can be very beneficial. In my position, it is critical to be the first to get our type of products to these hospitals."

Although questions around sustainability still cloud Peru’s transition to a modern healthcare system, there is no doubt that the country’s economic resurgence in recent years is having a positive impact on Peru’s pharmaceutical infrastructure.

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