New drug development is risky because it involves testing potentially lethal compounds on vulnerable and frequently sick patients. The dangers are enhanced by the growing insistence of regulators that potential medicines be tested on ever larger populations based on hard-to-quantify characteristics of health status, age and gender, and in diverse geographic settings that are often unfamiliar to the sponsors.   As part of our continuing coverage of best practices in the conduct of clinical trials, 

 asked a leading trial management expert to examine how quantitative measurement and analytics can enhance the predictability of what is arguably the most daunting challenge facing sponsoring companies—patient recruitment. 

Numerous surveys show that finding the right patients to participate in a clinical trial can spell the difference between success and failure in getting a promising compound blessed by regulators and launched to the market. Poor recruitment strategies pump up costs, divert scarce resources, consume more time and ultimately delay these very patients – and tens of thousands of others – prompt access to the medicines they need. An accessible and feasible quantitative approach to patient enrollment that helps sponsors identify specific opportunities and improve their procedures is long overdue. 

Traditionally, patient enrollment has been measured by the number of patients enrolled per site per month, which is called the "enrollment rate." This measure implies that patient enrollment is a site performance issue. However, site enrollment performance is not the only factor that drives enrollment cycle times. Experience buttressed by data indicate that the sponsor's business processes, as measured by indication-specific site activation timetables, is actually the determining factor in accelerating enrollment cycle times. Therefore, the traditional way of viewing patient enrollment – being determined by site performance alone – is incomplete.  Site activation, an important part of clinical trial start-up activities, actually plays the key role influencing overall enrollment cycle time.  

There are different ways to measure effectiveness in trial site activation.  The cycle time of site activation is one. Site activation starts from the time the first site is activated or initiated, and ends when the last site is activated. The less time between the first site activation and the last site activation, the more effective the overall activation process will be. As in the process of enrollment, site activation cycles depend on many variables, making it difficult to compare one clinical trial against another.  

Recently, PhESi developed the concept of the Site Effectiveness Index (SEI), which defines how effectively selected sites in a clinical trial are utilized. There are two ways to measure SEI. One is the percentage of selected sites open for enrollment over the duration of the enrollment cycle time. Another is from a single participating site perspective; its percentage of time open for enrollment compared to the overall clinical trial enrollment duration. As a percentage, SEI is always represented as a number larger than zero and smaller than one. A real-world case study will help explain the concept of SEI. 

Clinical Trial A and Clinical Trial B are two Phase III metabolic disease clinical trials in the same indication with the same design, sponsored by two different companies. By drawing two charts, we see the site activation curves for the two clinical trials along the time line. (See Table 1.) 

Table 1: Comparison of Clicinical Trials A and B 

Clinical Trial A activated 44 sites while Clinical Trial B initiated a total of 204 sites. It took less than four months for Clinical Trial A to reach the peak of site activation (i.e., for all 44 sites to be actively recruiting), while it took about 10 months for Clinical Trial B to get its selected sites up and running.  

Because Clinical Trial A and Clinical Trial B are similar in many ways, any deeper insight requires a methodology to compare the two trials. To achieve that, we define the X axis as the percentage of enrollment duration and the Y axis as the percentage of maximum number of sites activated, instead of the actual number of sites activated. (See Table 2.) By doing that, we see that area underneath the black colored line (Clinical Trial A) covers more than half of the chart area, and the area underneath the red colored line (Clinical Trial B) covers less than half of the chart area. 

The two straight lines tell us that more than half of the Clinical Trial A's 44 sites' enrollment capacities were utilized, compared to less than half of Clinical Trial B's 204 sites' enrollment capacities.  Using a specific mathematical formula, we can calculate the Site Effectiveness Index (SEI) is 0.55 for Clinical Trial A, and 0.45 for Clinical Trial B. That means that if we were able to improve site activation in Clinical Trial B to be as good as in Clinical Trial A, we would need only 167 sites to get the same job done, instead of 204 sites. That's a reduction of 18 percent of the sites selected. 

Even with improved site activation, Clinical Trial B uses many more sites (167 vs. 44), and significantly longer enrollment duration (13 months vs. 9 months) than Clinical Trial A. If we look at the above study and this time consider a hypothetically modified Clinical Trial B—call it Clinical Trial BM—reaching a maximum number of sites activated in 7.5 months instead of the original 10 months. That brings the SEI up from 0.45 (Clinical Trial B) to 0.55 (Clinical Trial BM), the same as in Clinical Trial A. As shown in the figure below, the total chart area beneath the straight lines then becomes the same. (See Table 3.) 

Table 3: Measures of Site Enrollment Performance 

As noted above, improvement in site activation can reduce the total number of sites needed from 204 in Clinical Trial B to 167 in Clinical Trial B[M]. But 167 sites, 13 months, and 565 patients is still quite different from the 44 sites, 9 months, and 700 patients in Clinical Trial A.  The 44 sites in Clinical Trial A, on average, performed much better in enrollment than those in Clinical Trial B[M.] When we calibrate the TRUE sites by the SEI of 0.55 for both Clinical Trial A and Clinical Trial B[M], it gives 92 sites (167 sites  x 0.55) for Clinical Trial B[M] and 24 sites (44 sites x 0.55) for Clinical Trial A. Therefore, the Average Site Enrollment Rate (ASER) is 3 patients per site per month (700 patients/24 sites/9 months) for Clinical Trial A, whereas ASER is 0.5 patients per site per month (565 patients/92 sites/13 months) for Clinical Trial B. 

In other words, Average Sites Enrollment Rate (ASER) is independent of clinical trial enrollment duration. For example, if you have four sites opened for enrollment for one, three, five, and seven months, respectively, and enrolled 160 patients in total, the ASER for the four sites is 2.5 patients/site/month (160 patients/4 sites/(1+3+5+7) months). The enrollment cycle time for this clinical trial could be 7 months or 10 months, or even longer—the ASER for the four sites remains 2.5 patients/site/month. (Generally speaking, it is safe to assume that the site opened for enrollment for seven months is likely the best performer among all the four sites.) 

Now we can see the picture more clearly: If we were able to select the same number of high enrolling sites in Clinical Trial B as we did in Clinical Trial A, we would only need 34 sites to enroll 565 patients (34 sites = 204 sites x 0.5 patients per site per month/3 patients per site per month) in 13 months.  In other words, the enrollment performance (ASER) of the sites in Clinical Trial B and divide that by the enrollment performance (ASER) of the sites selected in Clinical Trial A, that is the portion of the 204 sites needed, which equals to 34 sites 

By now, we can see the financial consequences caused by the differences in site activation effectiveness and site enrollment performance.  Assuming the cost to activate a site is $20,000 (a representative yet conservative industry estimate), needing 160 more sites in Clinical Trial B compared to Clinical Trial A means $3.2 million more in site activation costs. Assuming a site management fee is $1,500 per site per month, and the study duration is 8 months, there would be $1.9 million more in site management spending for Clinical Trial B.   

By adding the extra site activation fees and extra site management fees together, the cost comes to a hefty sum of $5.1 million: 

Incorporating this type of analysis in the clinical trial planning stage enables project teams to define operational boundaries on performance, set realistic time lines, and understand important trade-offs between the number of sites selected versus the number of monitoring resources needed to activate and manage those sites. This helps teams quantitatively identify improvement opportunities in their site selection and start-up processes. Then, when setting performance targets, we can invite all the stakeholders to go through individual parameters to reach consensus based on a common understanding, and align actions/resources to ensure total organizational support in reaching the performance targets. 

For example, determining the targeted number of patients per site is generally about determining how many sites to use. PhESi's approach assesses the issue from the perspective of site activation and enrollment performance. We all know that high priority clinical trials generally obtain more resources and financial support. However, effectively utilizing those allocated resources is an entirely different issue. As we saw in the earlier example, more money and resources (applied to activating more sites over a longer period of time) did not, in fact, shorten the enrollment cycle time—instead it prolonged it.  

If we were able to get data from several dozen clinical trials in a single indication and enroll the same number of patients in each trial, we could look directly at the relationship between the number of sites used and the performance of those sites using Average Site Enrollment Rate (ASER). In reality, we use number of patients per site (Total Enrollment Target/Number of Sites) as a surrogate to number of sites in trials with same enrollment target.  

By doing so, we minimize the impact of clinical trials with different enrollment targets, and still are able to understand the impact of number of sites being used when other factors are equal. We found that when number of patients enrolled per site increases, we increase the performance of all the deployed sites in that clinical trial, as measured by Average Site Enrollment Rate (ASER). In other words, by adding more sites to a clinical trial, the result is a reduction in the average performance of the sites the sponsor has activated. If the same number of patients are allocated across MORE sites then each site enrolls fewer patients and the Average Site Enrollment Rate (ASER)  goes down. 

Sponsors can rely on this approach to find the "Sweet Spot", with just the right amount of sites to ensure targeted enrollment cycle time to maximize the value of available resources against "speed to market' projections. For example, when working on a respiratory disease clinical trial, we find the ASER for clinical trials with biological intervention to be 0.52, versus 0.83 for the clinical trials with small molecule intervention.  

This difference is highly instructive to sponsors as it anticipates and reflects the higher level of difficulties for sites to enroll patients in clinical trials with biological interventions for a particular disease. That 60 percent difference between 0.52 and 0.83 is significant enough to guide the sponsor to commit to a larger number of sites being deployed in a biological trial, so that targeted enrollment cycle times can be achieved. 

As these parameters are objective and specific, they are easily accepted by project teams and provides a measure of objective performance to senior management.  In return, it effectively improves communication and understanding among stakeholders as to the ramifications of selecting more or fewer sites for example. 

This approach also provides a structured framework to proactively detect as well as manage possible derailments in the execution of the trial. Root causes for these derailments can be identified in specific areas, such as site activation and/or site enrollment performance. Before merely adding on more sites, study teams can seriously evaluate whether it makes more sense to enhance the enrollment performance of the existing sites (using a variety of methods and approaches), deploy a site activation "SWAT" team to rapidly activate any new sites or at least understand the time line implications of following their traditional site activation process. 

ASSUMING THE COST TO ACTIVATE A SITE IS $20,000 (A REPRESENTATIVE YET CONSERVATIVE INDUSTRY ESTIMATE), NEEDING 160 MORE SITES IN CLINICAL TRIAL B COMPARED TO CLINICAL TRIAL A MEANS $3.2 MILLION MORE IN SITE ACTIVATION COSTS 

is president and founder of PhESi.HE can be reached at 

. Beth Harper contributed to this article. 

Articles

Features

How proper site activation and site enrollment can help you get the most from clinical trials.

Finding the Sweet Spot

New leaders at the Food and Drug Administration are moving aggressively to address charges of incompetence and ineffectiveness that have roiled the agency in recent years. The Government Accountability Office (GAO) added FDA to its High-Risk list of government programs at the beginning of the year, largely due to inadequacies in drug oversight. GAO and other critics acknowledged perceived shortfalls in government funding as a prime factor, along with the rising complexity of medical technology and increased globalization of biomedical production. 

To make FDA more efficient and competent, commissioner Margaret Hamburg has reorganized her executive office to emphasize the importance of food safety and scientific integrity and to quickly inaugurate agency involvement in tobacco regulation. Hamburg is broadcasting FDA's intent to aggressively enforce manufacturing and marketing rules and to vigorously implement the multiple requirements established by the FDA Amendments Act of 2007 (FDAAA).  

A sign of the activist tone at FDA is the steady flow of new regulations and policies. One set of new rules aims to expand patient access to investigational medicines by finalizing several proposals long sought by patient advocates. The policy makes it easier for seriously ill individuals to obtain unapproved drugs under the treatment IND policy or to have early access to an approved drug for an unapproved indication. Sponsors gained important clarification on when they may charge patients for an experimental drug outside a clinical trial. 

Another recent proposal requires manufacturers to submit postmarket adverse event (AE) reports electronically. Leading pharma companies already file 80 percent of individual case safety reports electronically under a pilot program testing FDA's Electronic Submission Gateway. The new policy aims to make it easier for small biotech firms and medical device makers to follow suit by establishing a new Web portal for agency-wide safety reporting as part of  FDA's MedWatch Plus initiative.  

The e-filing rule makes few changes in the scope and timing of manufacturer AE reports and continues to utilize standards for data elements and format established by the International Conference on Harmonization that have been adopted in Europe and Japan. For these reasons, the agency anticipates minimal compliance costs for industry. FDA, however, will save $2.4 million a year by eliminating the manual conversion of paper reports to electronic form. More important, though, will be speedier access to critical safety information; FDA says that reviewers are able to obtain electronic safety submissions in two days, compared to two weeks to get paper reports into the agency's Adverse Event Reporting System. 

Drug safety officials also are developing guidance on conducting observational studies using large data bases, along with policies for reducing confusion over the names of new drugs. There's even a hint that FDA may try to finalize a massive set of safety reporting rules for drugs and biologics ("The Tome") after years on hold.  

One prominent FDAAA goal was to compel manufacturers to launch and complete post-approval safety studies on time. There seems to be progress in this area, according to FDA's annual report on the status of postapproval studies issued last month. FDA should improve its tracking and review of these studies following an assessment of pending and completed postmarket obligations by Booz Allen Hamilton [see sidebar]. 

Risk Evaluation and Mitigation Strategies (REMS) also are more visible, although most of these postapproval safety programs require manufacturers only to issue MedGuides for pharmacists to hand patients filling new prescriptions. Only a few REMS require more formal plans for communicating risks to health professionals or more extensive "elements to assure safe use," such as limited distribution programs.  

The unstated tradeoff for more investment in postapproval drug safety monitoring is supposed to be a less conservative agency stance in approving new drugs for market. But the jury is still out on whether FDA reviewers have confidence that these postmarketing initiatives will deflect outside criticism and calm internal dissent. The agency appears to be approving more new molecular entities (NMEs), but taking longer to do so, as many reviews go beyond the first review cycle time frame.  

In fact, the U.S. may be falling behind Europe in approving innovative therapies for patients. At a meeting last month sponsored by the Institute of Medicine (IOM) to evaluate post-FDAAA safety initiatives, Merck executive vice president Peter Hoenig noted that first cycle approval trends are down and that user fee approval dates are "routinely missed" due to increased scrutiny of safety issues. FDA is "clearly struggling" with postmarket safety demands, he said, suggesting that "drug lag" may be rearing up once more as European regulators approve some new drugs for market faster than in the US.  

John Jenkins, director of the Office of New Drugs (OND) in the Center for Drug Evaluation and Research (CDER), responded that it's unclear whether FDA reviewers have become more conservative in assessing new products. He sees no dramatic fall-off in NME approvals, but admitted that a decision to establish a REMS late in the review process will rule out a quick approval.  

It also takes time and resources to determine the scope and timing of postmarketing studies, Jenkins added. Instead of assessing sponsor proposals for the scope and schedule of safety studies, FDA now has to set the time lines and research parameters, some thing that is very difficult for reviewers to calculate, Jenkins noted. Because some studies are likely to involve thousands of patients, or more, CDER is planning to ask advisory committees to weigh in on acceptable postmarket study designs, number of patients and end points. The aim is to obtain "public buy-in" that will help FDA deal with second-guessing later on if a study is delayed or changed, Jenkins commented. Of course, scheduling more advisory committee meetings may delay approvals even more.  

More consultation with outside experts fits the stated goal of commissioner Hamburg to position FDA as a science-based organization where politics doesn't override medical and technical judgment in making regulatory decisions. Hamburg hopes that these and other organizational and policy changes will deal effectively with internal disputes over product safety and approval decisions and avoid public controversies, such as that which delayed approval of an over-the-counter version of the Plan B emergency contraception pill.  

One sign of the times is Hamburg's decision to bring new leadership to the Center for Devices and Radiological Health (CDRH). Veteran FDA official Dan Schultz resigned in August as CDRH director in the wake of several high-profile device safety cases, plus internal whistle blower complaints about management ignoring staff concerns regarding safety and efficacy testing of new products seeking market approval. FDA chief scientist Jesse Goodman has the task of ensuring scientific integrity in agency deliberations through a new office to resolve scientific disputes within the agency and to oversee advisory committees. 

At the August meeting of FDA's Science Advisory Board, Hamburg highlighted the importance of strengthening regulatory science as an academic field, noting that it has atrophied compared to the surge in biomedical research investment by the National Institutes of Health and other research organizations. She acknowledged concerns about the slim pipeline for new drugs and medical products and emphasized the need to "revitalize and re-energize" support for the Critical Path Initiative. Another assignment for Goodman is to make the case for FDA support of high-quality scientific projects under Critical Path, along with personalized medicine and comparative effectiveness research.  

Concerns about the "black box" aspects of FDA operations were raised by biotech companies and venture capitalists at a recent meeting with FDA officials and the White House Office of Science and Technology Policy. Hamburg agreed that a lack of transparency about the FDA review process and regulations can be "very stifling to innovation," while an increased focus on regulatory science can support development of new pharmaceutical products. 

's Washington correspondent. She can be reached at 

Washington Report

All the focus on drug safety raises concerns about FDA delays in approving new drugs for market.

Science and Safety

As Novartis CEO Dan Vasella notes in this month's cover story, pharma has more invested in public policy than any other industry. Not only are companies increasingly dependent on government as a payer for medicines, vaccines, and diagnostics, the cost to invent and commercialize these technologies has grown to the point where even the biggest players have to share the burden. Good partners are hard to find, and success is more likely through transparent regulation linked to incentives that allow for mitigation of risk. 

Medicines innovation is costly because it is unpredictable. Companies are trying to "rationalize" drug development, focusing on process changes that will harness and direct the creative spark while managing uncertainty.   

Yet internal changes, while important, achieve little if there is no consistent effort to improve the conditions imposed on the industry through government, media, and academia. Here, pharma is uniquely exposed. It remains the largest industry where the cost to replicate and manufacture a technology is tiny compared to development costs. Wired editor Chris Anderson puts the dilemma this way: The more products are composed of ideas rather than tangible "stuff," the faster they can get to be "cheap."   

One option is to look to the next generation of industry leaders. What actions can be taken today to ensure they have the tools to deliver the innovations of tomorrow? This burning question drove 

's search for the most promising executives in the industry under age 45, who were profiled in our June issue. The 27 Emerging Pharma Leaders come from a cross-section of functions and geographies; their companies account for more than $250 billion in annual revenues—from giants like Pfizer to firms whose sales barely top $50 million.    

From these leaders, we gained useful insights on what is necessary to keep the candle of innovation alight. Three themes stood out:   

(1) Innovation is more about differentiating how you do business than developing new products. For example, the company that invents a new way to link therapies to the efficient delivery of primary care is going to control its fate better than the company whose offering is limited to what's listed on a patient package insert.  

(2) Demonstrate how private sector innovation really works, and why incentives count. The innovation process is changing fast. Interactive global partnerships are replacing traditional in-house development, and more attention is being focused on R&D throughout the product life cycle. Governments and payers still don't see that innovation covers everything from invention to approval to building market share. Scant attention is paid to the critical "back end" of the innovation cycle, which covers return on investment and the incentives provided by adequate pricing all the way through patent expiration.   

(3) Emphasize the "human" in the HR function. Skill in the "soft" tasks of personnel management are critical, and that has to be reflected in the characteristics of leadership. The paradox is that to command and, where necessary, "turn the battleship," tomorrow's CEO will have to emphasize a management style that is inclusive, diverse, flexible, open, and aware.  

 will expand on these themes with a roundtable discussion on innovation and a dinner with the 27 Emerging Leaders, hosted by our sponsor in this ongoing initiative, Cegedim Dendrite. It is a conversation vital to the future of this industry— and one we will continue to explore in future issues of 

From the Editor

Governments and payers don't see that innovation covers everything from invention to building market share. Scant attention is paid to the critical "back end" of the innovation cycle.

Explaining Innovation

Dr. Daniel Vasella, who created Novartis 13 years ago, turning it into what many analysts consider the world's leading global healthcare conglomerate, is the sole industry CEO with any purchase on greatness. During a decade when the industry has lost its high margins, public trust, and business model, leading to the exit of an entire generation of pharma leaders, Vasella, 56, remains the outstanding exception. 

 cover story last June, business guru Ram Charan spared no superlative. "He is not a prisoner of the existing paradigm. Instead, he is trying to change it," he said. "The same way Steve Jobs did at Apple, Andy Grove did at Intel, and Sam Walton did at Wal-Mart."  

Cliff Kalb, president of C. Kalb & Associates, compares Vasella to Roy Vagelos, who led Merck from the mid-'80s to the mid-'90s, when it was annually voted America's most trusted company. "They are both MDs, and they both emphasized science over marketing, picking financial winners because they addressed significant medical needs."  

In fact, Vasella is the only physician to lead a major drug company, a distinction lending his public image a certain gravity. Vagelos set a precedent for pharma philanthropy in the developing world in 1988 when he ordered Merck to donate its drug for river blindness free of charge until the disease is eliminated; in 2000, Vasella made a similar commitment to eradicate leprosy. He built the Novartis Institute for Tropical Diseases in Singapore in 2002, to focus on neglected diseases. Novartis' new malaria drug, Coartem, is available at 20 percent below cost.  

Plus, Vasella is a media darling. In 2004, 

 magazine named him one of their "100 Most Influential People." He speaks three languages, collects rare books and Dutch Master paintings, and rides motorcycles. Above all, he is the most quotable of CEOs—frank, bold, and unscripted. 

This summer, when animal-rights activists targeted him in a series of chilling attacks (including arson at his summer house and desecration of his family grave site), Vasella was quick to make a public statement, condemning them as "terrorists."  (See "Animal Testing: Terrorism and the Militant Fringe") 

But all this would be mere affectation if Vasella hadn't demonstrated a commitment to innovation. "Vasella saw where the industry was heading, how science itself was transforming the model," says Jeff Elton, former senior vice president of strategy and COO at the Novartis Institute of Biomedical Research  

That visionary quality is even more noteworthy given the setting for Vasella's success. Long dominated by three chemical companies—Ciba-Geigy, Sandoz, and Hoffman-LaRoche—the business environment in Basel, Switzerland, was anything but congenial. Yet the potential Vasella saw in the merger of Ciba-Geigy and Sandoz was not to be measured by local standards. "He made the merger with an ambition far exceeding any fight about which side of the Rhine river you were on," says Elton. 

He built Novartis on a business model of diversification—Gleevec, Gerber, and generics all under one metaphorical roof. "It's hard enough to run a pure-play pharma consistently," says Peter Young, president of Young & Partners. "But managing the volatilities of a diversified healthcare company successfully for more than a decade is very rare." 

Vasella's apparent independence from the industry groupthink has alerted him to opportunities invisible to his peers. When generic manufacturers were viewed as barbarians at the gates, Novartis was quietly acquiring one shop after another, turning Sandoz into the world's number two generics manufacturer. Criticized for sleeping with the enemy, Vasella stood his ground. "I am a strong believer not only in intellectual-property rights [but] also in generics," he said in a McKinsey interview. "Once the monopoly of this knowledge and invention is over, somebody can copy it and sell it very cheaply, which in turn saves a lot of money."  

Plus, Basel is a long way from Wall Street. As far back as 2002, Vasella was decrying the tyranny of quarterly earnings. "The men and women running public companies ... become preoccupied with short-term 'success,' a mindset that can hamper or even destroy long term performance," he told 

. "It may sound trite, but I truly believe my ability to keep shareholders' faith in our company depends not on whether I make the quarter but on who I am, what my guiding principles in life are, my behavior." 

The Vasella back story has been repeated so often that the details are almost the stuff of legend. His youth in rural Switzerland was "blighted by illness": asthma at age five, then TB and meningitis at eight; at 10, he watched an older sister die from Hodgkin's lymphoma; three years later, his father died suddenly. A career in medicine may have seemed like fate rather than a decision. In any case, his rise was swift; specializing in internal medicine, he found himself, at age 31, married with children, an attending physician at a university hospital in Berne.  

Then he lost himself. The details of Daniel Vasella's move from medicine to business are sketchy in the various published accounts. In the most dramatic version, he suffered a "breakdown"; according to others, a mentor suggested that he enter psychotherapy to deal with his arrogance or, alternately, as a kind of pedagogical experience. In fact, Vasella underwent a four-year psychoanalysis, a treatment he has described as transformative. "Psychoanalysis liberated me from my past and my destructive patterns," he told 

. "It can make transparent who you really are, what you like, how you want to live your life."  

In 1987, he joined Sandoz as a drug rep in East Hanover, NJ—reportedly against the advice of the chairman of the board, Marc Moret, who happened to be the uncle of Vasella's wife, Anne-Laurence. A year later he was named product manager for Sandostatin, a new growth hormone–inhibiting analog for rare pancreatic tumors—not exactly a blockbuster-to-be. But Vasella got researchers, clinicians, and marketers to see Sandostatin's potential, ultimately expanding its indications to other rare tumors. Soon he was the head of the pharmaceutical division. When the merger of Ciba-Geigy and Sandoz was finally sealed in 1996, Moret tapped 43-year-old Vasella as CEO. 

If psychoanalysis introduced Vasella to the transformative imperative, Vasella did the same for Novartis. He imposed performance-based compensation, laid off 12,500 staff, and then established an $80 million VC fund to help former Novartians fund startups. In his first two years he nearly doubled the US sales force; by 2000, he had doubled R&D investment. Annual drug sales rose at double-digit rates.  

Yet under his leadership, Novartis has seen its share of reversals. In 2007, US sales dropped due to copycat competition for a slew of Novartis' primary-care products. FDA nixed cox-2 inhibitor Prexige, flagging kidney danger; Galvus, its DPP-4 inhibitor for type-2 diabetes, never even got past US regulators. The company had to yank Zelnorm for safety issues. These setbacks contributed to a 45 percent drop in fourth quarter profits, resulting in a 33 percent pay cut for Vasella.  

His response to the downturn was sweeping. He announced a cost-cutting regime dubiously dubbed Forward Initiative, aiming for $1.6 billion in savings by 2011. He also axed another 2,500 jobs, including a near-total turnover at the top. Thomas Ebeling, global head of pharma, got the boot; he was replaced by Joe Jimenez, a recent star hire from Heinz.  

Last December, the turnover continued. Vasella tapped longtime lieutenant Joerg Reinhardt to be his new chief operating officer. Then Vasella removed veteran Andreas Rummelt from the top generics spot, substituting emerging-markets chief Jeff George. At the same time, Andrin Oswald became head of the vaccines and diagnostics division. Next April, Jonathan Symonds, the former AstraZeneca CFO, will grab the financial reins when current CFO Raymond Breu gets his gold watch. Indeed, the clock on Vasella's own tenure would seem to be running down. 

After hitting a seven-year low in March, Novartis' stock is on the rebound, with analysts giving high grades to its pipeline. At a time when rivals like Pfizer and Merck achieve boa-like growth, swallowing more productive, slightly less enormous prey, Novartis boasts an in-house R&D engine that seems to run better with age. (See box)  

In the first half of 2009, the two main therapeutic franchises, oncology and cardiovascular, both recorded a 15 percent rise in sales. (See box, above.) "Novartis has succeeded in launching products in a fairly wide range of categories, from big primary-care drugs to niche spaces where there is little competition," says Datamonitor pharma analyst Simon King. "Even their patent cliff isn't the kind of threat of, say, Glaxo's or Pfizer's." 

Novartis' top two products, Diovan (number one in the anti-hypertensive market) and Gleevec (the "magic bullet" for CML), lose exclusivity in 2012 and 2015, respectively. But according to JP Morgan Securities, projected sales from nine new (or newly formulated) drugs launched since 2007 are set to break $7 billion just as those cash cows quit producing milk. But what the pipeline lacks in big hitters, it partly makes up for with a robust mix of targeted, hormonal, and cytotoxic therapies. "In the rush to develop high-margin targeted agents like Avastin, most other Big Pharmas are abandoning these older approaches," says Decision Resources analyst Kate Keeping. "Novartis has gone the other direction." 

Most innovative is mTOR pathway inhibitor Afinitor, which won FDA approval for kidney cancer in March. (Keeping projects peak sales of $500 million in 2015.) The three novel molecules in Phase III are being tested in lung cancer, ovarian cancer, and a series of niche cancers. Decision Resources is bullish on their value for patients, but bearish on their sales—around $200 million or less. 

 Novartis' money minter is Diovan (valsartan), an angiotensin receptor antagonist that soars among chemicals for high blood pressure. Vasella has been deploying a range of tactics to blunt the fall off this steepest patent cliff. Tekturna (aliskiren), the novel direct renin inhibitor was hailed as the first new approach to hypertension at its 2007 approval. But this blockbuster-wannabe notched a measly $120 million last year. "Novartis is a victim of its own success," says Decision Resources' Graeme Green. "Diovan works great for most people; persuading them to switch to Tekturna is a no-win." Meanwhile, Novartis has been employing Diovan life cycle management, marketing it in combination with a calcium channel blocker amlodipine to create Exforge, and adding a diuretic to create Exforge HCT. 

In February, Novartis inked a deal with Portola Pharmaceuticals for $75 million up-front and up to $500 million in milestones for a Phase II anti-clotting drug elinogrel, which would compete for the a piece of the enormous Plavix pie. The company also nabbed Speedel's cardio drug pipeline in its quest for Tekturna. And in August, Novartis got the nod from FDA to sell a copy of Betaseron, Bayer's old interferon-B drug. "It's a way to build a strong commercial and medical organization ahead of FTY720," said Joe Jimenez.  

Without a doubt, Gleevec (imitanib) is the Excalibur of the Vasella mythology. Without that "magic cancer bullet," he would be, at best, CEO of a very successful, highly diversified pharma—not a radical redesigner of R&D or a hero to CML patients.  

Gleevec is the ultimate in rational drug design. Once the genetic mutation associated with CML was fingered, Novartis began screening tyrosine kinase inhibitors until they got a hit in 1999. In early human trials, the drug produced sudden, near-total remission with minimal toxicity. There remained only one hurdle: The commercial forces inside Novartis "argued against rushing and taking risks for a drug that would produce such little return on investment," according to Vasella 

The good doctor, of course, prescribed taking risks. Recognizing that if word got out, armies of patients and their advocates would demand the cure, he put the manufacturing of imitanib on fast-forward. After three short-term, early-stage trials FDA sent it to market. Since then, Gleevec's label has been expanded to include GIST and other cancers. In the first half of 2009, it garnered nearly $2 billion in global sales. Last month, the scientists who discovered Gleevec were awarded the 2009 Lasker Award for clinical medical research.  

Vasella seems to have embraced the Gleevec moral ("follow the science") like a true believer. In the boldest gamble of his career, in 2002 he moved Novartis global R&D headquarters from Basel to Cambridge, MA, investing $4 billion in a new Institute for Biomedical Research and hiring Mark Fishman—the Harvard cardiologist who decoded the zebrafish genome—to lead the company into the translational-medicine future Gleevec had augured. 

Refocusing R&D was not an entirely novel notion—GSK was unveiling its Centers for Excellence—nor were biologics completely off Big Pharma's radar. Yet the idea of staking the company's future pharma business on an academic outsider, an untested model of drug discovery, in the Harvard-MIT biocluster made some wonder whether Vasella was crazy like a fox or just plain crazy. The kicker? "'And we won't even know if it works for another decade,'" Vasella says he told the board.  

 Russ Somma, who worked 30 years at Ciba and Novartis, helping to develop Gleevec, recalls: "Back in 2001, the Novartis pipeline definitely needed work, so moving the early-development stuff to Cambridge made sense. But translational medicine, genomics, biomarkers? There were plenty of people who thought Vasella was just blinded by the 'Gee-whiz!' factor'."  

 Says Jeff Elton: "It was a time when the industry was pulling in double-digit margins with primary-care blockbusters, so the argument was against taking risks, let alone embracing a new paradigm. All credit to Vasella, but also to his team and to the board, too, for trusting in his vision." 

Eric Lander, director of the Whitehead Institute-MIT Center for Genome Research, told 

in 2003 that it was a "watershed move that sent tremors through the pharmaceutical industry. This move says that the lifeblood of the industry is changing from chemistry to molecular biology, from art to engineering." 

For Fishman, molecular pathways were the holy grail, the "missing grammar," compared to which the genome's 22,000 genes are merely words without sense. And his model makes sense: "Take rare diseases and use them as an entrance to more common ones—wherever science is strong and disease mechanisms are understood, we'll be able to make progress quite quickly," Fishman said in 2004.  

In June, after a five-year wait, Fishman's first compound, Ilaris (canakinumab), won FDA approval for cryopyrin-associated periodic syndrome (CAPS), a rare inflammatory disorder caused by a single gene mutation that causes the overproduction of IL-1. Like Gleevec, its targeted gene-specific mechanism provides stunning efficacy. "All you have to do is touch a patient with the medicine, and the symptoms start to disappear," says Hal Hoffman, associate professor of medicine at the University of California, San Diego. 

Still, the drug lay in limbo for 18 months. With the means to chemically control the expression of IL-2, an inflammatory protein involved in some 30 diseases, there was confusion about where to start. "It got completely bogged down in these debates around value that have paralyzed drug companies for years," says Trevor Mundel, Novartis' global head of development. Once again, Vasella rode to the rescue—or so the PR goes. 

Whether or not Ilaris will validate the translational-medicine concept remains to be seen. As a treatment for CAPS, it's a slam dunk. But CAPS is an ultra-rare disorder, and rarely fatal; nor is it an unmet medical need, since Regeneron has a rival drug carrying an annual price tag of $250,000. To pay its way, canakinumab will have to prove effective against bigger diseases, and Novartis is rolling out tests in gout, juvenile rheumatoid arthritis, diabetes, and respiratory disease—whose causes are far more complex than the single-gene target. 

Elton points out that Ilaris is only one drug, while the number of compounds that have moved from discovery to the clinic increased nearly 50 percent from 2004 to 2008. "A Phase II/III bottleneck" is how Mundel described the fruits of Fishman's R&D. The current Novartis pipeline does reflect a possible bottleneck—17 NMEs to be submitted in 2012 and beyond, but mainly in common cardiovascular or oncology indications, not rare diseases.  

For now, most analysts give Novartis the benefit of the doubt "Every Big Pharma has been looking for the magic bullet for R&D innovation. Vasella picked this early on, and took a big gamble. In a few years, if we don't see a bunch of compounds, it may look like the bet didn't pay off," says Miller Tabak's Les Funtleyder. 

Vasella's early embrace of the generics business was, in its way, as risky as translational medicine. But there he was following not the science but the accounting—yet still he was more or less blazing his own trail. He steered Sandoz through a series of acquisitions in strategic regions, such as Lek in Slovenia, Sabex in Canada, and Durascan in Denmark. Sandoz products gradually slipped into markets across Western Europe, as well as in Mexico, Argentina, Turkey, and a other key emerging markets. After consolidating these far-flung ops under the Sandoz name in 2002, the firm's "branded generics" strategy began to gain traction; in 2004, its $8 billion acquisition of Hexal, in Germany, and Eon, in the US, has established Sandoz as world's number-two global generics maker. 

But the generics bubble will burst by 2015, as the last small-molecule megablockbusters lose their patents. Biologics already make up almost half of all the products on the global market, and next year $18 billion's worth of biologics will lose exclusivity. The quick-and-dirty copycat chemical companies will vanish, yielding to an elite with the expertise, technology, and money to produce specialty generics and biosimilars.  

Novartis CEO Daniel Vasella has built the Swiss firm into the fastest growing pharma in the world, and in the process gained a reputation as an outspoken visionary. But is he really as good as all that?

The Book on Daniel

Animal rights activism has been rightly declared as a policy challenge where big pharma has made some progress.  Anecdotal evidence and independent survey results—including several referenda in Europe – suggest that public attitudes toward the industry's use of test animals in research have improved.  But has the issue really moved on?  Or is it slipping out of the mainstream to morph into a potentially more militant and dangerous phase?  

The question is worth posing, due to the emergence of a new class of activists committed to a highly personal campaign threatening violence against specific industry executives. Novartis CEO Daniel Vasella is the most prominent target, as victim of several bizarre attacks on family property over the past few months. The assaults are part of a shadowy pattern of actions against Novartis executives that appear motivated by the progress the company has made in explaining its positions to the public and other stakeholders on animal testing.    

Vasella himself is characteristically direct, telling 

 and Swiss newspapers that the attacks—including desecration of a family grave site and the torching of his vacation residence in Austria—are "beyond activism and represent an effort to instill fear. I call it terrorism."   

The Novartis case illustrates a key challenge for companies in managing efforts to impugn their reputation as responsible corporate citizens. How do you distinguish among groups that are credible and open to dialogue against the "flame throwers," who rely on tactics best summarized by the phrase "anarchical non-engagement?"  When an issue is controlled by the latter, it effectively becomes a terrorist front, with the only dividing line being whether the terror takes the form of verbal fisticuffs like hate mail or actually leads to physical violence against persons or property.  

The Militant Forces Against Huntington Life Sciences—the group that claimed responsibility for the arson incident in Austria—classifies itself in the latter category.  Its goal is to ratchet up the attention on animal rights by intimidating mainstream activists and radicalizing the debate into two irreconcilable camps. One key tactical maneuver is its focus on Huntington Life Sciences, the leading contractor for lab animals, as the poster child for bad behavior. Militant Forces wants to make a drug company's association with Huntington the sole test it must pass to ensure ideological purity on this issue.   

More important, the movement's violent fringe has become more disciplined over the last decade. One consequence is that law enforcement efforts have increased. At least 15 animal rights activists are currently serving prison sentences in the UK and the US for violent crimes.   

Facts carry little consequence in this struggle. It is worth noting that Vasella isn't even included in the latest list of "Ten Worst CEOs" published by the largest mainstream global animal rights group, People for the Ethical Treatment of Animals [PETA].      

Nevertheless, Novartis employees worldwide are increasingly at risk. Activists sabotaged 17 tubes of Lamisil cream in Mexico, cars of Novartis employees have been trashed, and a Novartis office in Switzerland was attacked with butyric acid. A building in Germany was burned down in September because the company was building an animal testing laboratory inside.  

As the pressure heats up, what is the best course companies can take?  Novartis can offer some guidance here.  

First, the commitment by Vasella to speak up in the face of intimidation not only ensures that militants won't dominate the debate; it provides a boost to company morale as well.  

Second, Novartis has established an internal, "bottom up" effort with its own animal-welfare organization of 60 employees that meets regularly to ensure the company sticks to its standards.  

Third, exchanges take place between company scientists, toxicology experts and a range of non-violent groups about how to test products in the most humane way. The exchanges are geared to real metrics, with the result that as Novartis' investment in R&D has increased, the animals it uses in testing has declined.   

Fourth, in addressing its adversaries, the company puts unremitting faith in messaging around continued progress in medicine. Science may offer the best hope of defusing the issue, as technological advances in computer simulation may soon limit the necessity for most animal testing.   

Back Page

The militant fringe of animal rights activists targets pharma.

Animal Testing: Terrorism and the Militant Fringe

Pharmaceutical executives understand that they must confront multi-layered demands. They have to explore new business models while attending to their existing, highly profitable commercial model. The important question is: How can they actively pursue both paths to create their own future? 

Designers, who are trained in creative problem solving, excel at solving these kinds of complex, multi-dimensional challenges. While designers are respected for their vision and creativity, their disciplined approach to problem solving often yields solutions not discoverable through traditional business methods. 

Though design has historically been applied to the development of new products, in recent years leading companies such as Intel, Toyota, GE, and P&G have implemented design in conjunction with traditional business thinking to create new offerings, customer experiences, and business models.  

With a sharp focus on how things work, designers approach problem solving with distinctive faculties of openness and curiosity, analytic rigor and integrative thinking, and flexibility and responsiveness. Those qualities, combined with the rigorous discipline and protocols of design, reliably yield new products, services, and business models.  

The discipline of design provides valuable insights and lessons for the pharmaceutical industry as it rethinks its approach to the commercial model:  

Solutions to complex problems are seldom found by study of the individual components of the problem. Design thinking embraces this complexity when defining the challenges at hand, dissecting issues and causes until the system as a whole has been framed in the broadest context.  

Companies that frame healthcare challenges holistically, taking into account the needs of all stakeholders, will be more likely to create solutions that are effective and robust. On-site health clinics such as Whole Health Management (now owned by Walgreens) have been able to reduce employers' healthcare costs by creating a value proposition that works for the needs of employers, employees, and caregivers, leading to wholly new models of healthcare delivery.  

 Take a look at the experience of customers and non-customers, and the contexts in which they live and act. Techniques derived from (among others) cultural anthropologists, social scientists, and ethnographers all serve to generate important insights about opportunities to engage more meaningfully with customers. Such insights add significantly to the information provided by more traditional market research techniques, which tend to focus on how to evaluate the current behaviors of known customers. Designers' research techniques generate insight into patients' needs and uncover ways to serve those needs beyond product features and messages about clinical efficacy. Companies that understand these needs and deliver compelling experiences to meet them—through new payment models and product systems—will thrive in the new market.  

For example, as Wellpoint (now Anthem Blue Cross) created Tonik, a straightforward health insurance offering for uninsured consumers less than 30 years old, they understood they would be targeting customers outside  their traditional demographic. By using ethnographic techniques, they formed a deep understanding of the environment, perceptions, expectations, and values of this group that made it clear they would need a different model to engage this population. Armed with this new insight, Wellpoint created a simple, clear suite of offerings, supported by a culturally relevant brand and a compelling style that has contributed to success that exceeded all expectations. 

Perform divergent and integrative thinking to find novel solutions 

While designers are extremely skilled at drawing out holistic insights about a particular challenge or problem, they never lose sight of the forest for the trees. This ability to create deeply informed, but thematic, insights allow them to constantly draw connections to other fields of study and industries. That, combined with their unwillingness to be tied to industry orthodoxies, means they are able to integrate insights, analogies, and precursors from multiple sources. For example, the rise of health tourism and the global attraction of hospitals like Bumrungrad in Thailand and Apollo in India were driven by lessons from the high-end hospitality industry. These were applied to create world-renowned healthcare services at a fraction of Western costs. Pharma will need to deploy such divergent and integrative thinking to consistently discover opportunities for disruptive innovation.   

 One predictable challenge that goes with the reinvention of a commercial model is that many elements of the solution, by nature new and uncertain, draw out the "antibodies" of legacy infrastructure. Innovations can easily be killed before they reach the market by objections that infer the infeasibility of ideas or exaggerate the market's reactions to them. By contrast, design draws its main insights from the market itself through rapid prototyping of new models with lead users and non-users in their natural environments. This approach generates real feedback so that new ideas can be improved upon more quickly.  

The rapid cycle of market-driven improvement also brings a new innovation concept that quickly neutralizes the objections of the traditional legacy systems. Companies that adopt prototyping and adaptation dramatically accelerate their time to market with viable offerings—both because they learn faster and because this approach allows them to fail early and inexpensively. For example, the Mayo Clinic's "See, Plan, Act, Refine and Communicate" (SPARC) and Kaiser Permanente's Garfield Center provide those organizations with "living laboratories," where new protocols and technologies can be tested, adapted, and implemented quickly and successfully. 

A number of companies outside of healthcare have applied design thinking to their business with staggering results. Apple has redefined how people experience media. P&G has revolutionized home cleaning. And in healthcare, a number of companies—particularly in the device and delivery arenas—have used design thinking to redefine their business. J&J has used designers in its endosurgery business, coupling an understanding of user needs with its capabilities in science and bioengineering.  

And there are numerous opportunities to apply design thinking to transform pharma's commercial model.  

As access becomes more difficult, design thinking can aid in the creation of new ways of communicating and engaging professionals. This could include working with physicians and physician groups to deliver integrated, customizable solutions that cut across therapeutic areas, and engaging in new business partnerships that help physicians run more successful practices.

As payers strive to contain spiraling costs, they pare back drug coverage and exert downward pressure on pricing. Design thinking can help explore dramatically different models of cooperation and risk management with payers. These could be driven by reimbursements for managing specific conditions through more integrated therapies and new protocols for healthcare delivery.

As consumers take on more responsibility for their healthcare, pharmaceutical companies must adjust how they interact with their audience. Design thinking can help re-imagine the frontiers of service, such as providing intuitive, clear information and convenient solutions that help people participate in their own care. 

Design thinking can provide a capability for creating compelling solutions for the new challenges facing the healthcare industry. Designers bring a sense of empathy along with an open-minded attitude that is unencumbered by traditional industry approaches and solutions. Add to this their passion and optimism—an innate energy for seeking out what's possible, in addition to what's desirable and feasible—and we see a powerful set of skills the pharmaceutical industry would do well to embrace.    

Of course, design capabilities are complements to, not substitutes for, the existing innovation capabilities of the industry. This is a leadership opportunity. Those leaders who make the strategic commitment to think and act differently—creating the capabilities, permissions, and independence necessary to re-frame the challenges ahead—will find themselves moving and learning faster than their competitors. In turn, those who move quickly to embrace design thinking will not only inject more imagination into solving the challenges they confront, but also will be at the forefront of the next several decades of success.   

is a designer and manager at Doblin, a member of Monitor Group. He can be reached at 

is senior partner of Monitor Group. He can be reached at 

Columns

Executives should embrace design to discover new markets and find new ways to server customers.

Innovation By Design

To many marketers, the challenge would seem nearly impossible: introduce a specialty product into a category dominated by a well-established player, and into a marketplace largely satisfied with the existing standard of care. Such was the situation that Tercica, Inc., a subsidiary of the Ipsen Group, found itself in as it prepared to launch Somatuline Depot (lanreotide) Injection, a pre-filled, home-delivered treatment for acromegaly, a rare condition that affects 60 out of every 1 million people. 

For Tercica, getting physicians to adopt Somatuline Depot versus staying with the well-established market leader required acknowledging some substantial barriers up front. Few patients were dissatisfied with current treatment options, Tercica was competing against a well-supported and well-established market leader, US physician brand familiarity was low at launch, and Somatuline Depot would have constrained sales and marketing resources compared with the competitor. These challenges meant that Tercica needed a creative and ambitious launch plan for Somatuline Depot. 

How can small brands launch against larger, better funded competitors? With speedboat-like maneuverability inherent in interactive marketing.  

To help establish awareness and drive adoption of its new product, Tercica worked with Compass Healthcare Communications to develop a measurable interactive plan divided into a three-phased approach: prepare the market, launch into the market, and become the market. 

You can create pre-launch excitement by developing and launching, as soon as allowed, an initial "placeholder" Web site as a destination for those who are seeking information about the soon-to-be launched brand. In addition, visitors can opt in to a database for the latest news about the brand, launch timing, and availability, which can be used at launch to drive trials. 

In the case of Somatuline Depot, the market was neither excited nor clamoring for a new acromegaly treatment. So the goal, to create excitement, was tough. Fortunately, Somatuline Depot offered enough unique benefits to make physicians and patients take notice. Never before in the US had an acromegaly treatment come in a ready-to-use pre-filled syringe for easy injection. Simplicity, efficacy, and tolerability were three key areas that differentiated the product from the competition—and these were the benefits highlighted in the placeholder Web site, developed to generate excitement for the soon-to-be-launched brand. 

The brand's launch was supported on a number of interactive fronts that included:  

Targeted email blasts to healthcare professionals

 Endocrinologists, nurse practitioners, physician assistants, and pharmacists received emails announcing the arrival of the only somatostatin analog in a pre-filled syringe. For pharmacists, in particular, the announcement was particularly newsworthy, as this marked the first time that they would dispense this type of therapy.

 As the email campaign hit professional audiences, the full brand site was also being launched. The site contained sections for both healthcare professionals and patients. It reinforced to both audiences the key branding hallmarks of Somatuline Depot—simplicity, efficacy, and tolerability. A brief video on the site highlighted features of the product that distinguished it from the market leader—shorter needle length, smaller injection volume, and a subcutaneous delivery method—and emphasized its easy, two-step injection process. 

Search marketing with the TEEM approach (Targeted, Efficient, Effective and Measurable)

 Another interactive strategy that helped propel Somatuline Depot into the market was paid search or text ads or sponsored links that appear at the top or side of search results pages. Marketers can buy certain keywords or terms that customers use to search. In leveraging paid search, Tercica was able to identify critical keywords that people were using to find information on the Internet about acromegaly and its treatment. By incorporating the findings from this research, Tercica developed a search engine optimization (SEO) strategy that drove even more qualified traffic to the Somatuline Depot site.

To support your patient targets, leverage social media and insight-driven resources. While it may seem farfetched for a small and relatively unknown newcomer to dominate the market, the goal seemed an achievable one. Through our SOCIAL MEDIAtion process, Compass began observing the social media space—identifying key sources of information relevant to our brand such as message boards, Facebook, and other networking groups and online communities. 

Next, we identified 20 key sites that contained acromegaly and treatment information, including 

. To ensure that the Somatuline Depot message appeared in as many places as possible and was always accurately represented, Compass employed its Online Outreach service. Using Online Outreach, Compass developed, distributed, and gained placement of educational content on many of these prominent sites, often with links back to 

In terms of building brand awareness, driving traffic to the Web site, and establishing product trial, the results of Tercica's interactive efforts far exceeded the company's goals for the brand. 

The email campaign enjoyed a highly favorable open rate, with 13.4 percent of physicians and 11 percent of pharmacists opening the launch announcement email. Of the 18,000 pharmacists who opened the email, close to 7,000 clicked through to the new Somatuline Depot Web site. 

Online Outreach efforts resulted in 75 percent penetration and adoption, with eight of the 11 identified sites implementing the educational content submitted to them. 

Furthermore, Tercica was especially pleased with how many patients and healthcare professionals visited 

. In the first 12 months post-launch, more than 32,000 unique visitors arrived at the site, with 80 percent of site traffic being delivered via paid search. 

Not only were the interactive marketing efforts successful in driving qualified traffic to the site, once visitors arrived, but they were also effective in driving online traffic. Visitors averaged 6.2 minutes on the site with 125 visitors opting into the database in the first month alone (60 percent of those were patients; 40 percent, healthcare professionals). Within the first six months, 115 consumers signed up for the CRM program, and 20 percent of CRM enrollees went on to print the online coupon for Somatuline Depot, with 46 percent of them redeeming it. 

Somatuline Depot is living proof that for small, specialty pharma companies, interactive marketing can bring them into the big leagues, but more importantly, emerge them as a star player. While Big Pharmas may have greater resources, their sheer size can cause them to move slowly, like a battleship. So, get moving—propel your brand into the market like a speedboat, and in the process, create powerful waves.  

is president and CEO of Compass Healthcare Communications. He can be reached at 

How a small competitor benefited from the use of interactive marketing.

Making Big Waves

Has anyone noticed that the American workplace has become a veritable shrine to interruptions? Each day, managers arrive at their desks with their current project top-of-mind. And each day, in order to focus long enough to accomplish a single task, they must ignore pages of emails, dismiss an army of subordinates, and shut out a chorus of ringing phones and pinging texts. 

The consequences of permitting interruptions to control your business can be disastrous. According to a 2006 study published by the management consultancy Basex, workplace interruptions cost the US economy roughly $588 billion a year. Whatever your share of that money is, your firm can't afford to lose it to managerial mistakes – especially during a downturn. 

No office is immune to the problem, and the majority of employees are affected by it, whether they're the interrupters or the interuptees. The average worker spends roughly 28 percent of their workday—that's more than two hours each day—dealing with and recovering from interruptions. And unit leaders have to fend off more interruptions than anyone else because their ears are always in highest demand. The challenge for leaders is to filter out extraneous requests and remain focused on their primary goal, so that nothing else is allowed to interfere until they are certain their key priority is being addressed.  

Of course, a no-interruption policy is only as good as the leader who enforces it. It's all well and good to say, "Don't knock when the door is closed," but if someone knocks, and you answer, then you're teaching the wrong lesson. As a general rule, when the door is closed leaders should not honor any interruption, except for a true emergency or family crisis. 

"Management is largely about interruption," writes Henry Mintzberg, management professor at McGill University, in an article published in the Wall Street Journal. "But email, and especially BlackBerries ...really make it much worse." 

Cognitive research conducted over the last ten years indicates that the time lost in switching between two tasks is magnified when one of the tasks is unfamiliar or more complicated – a common scenario for the executive interruption. This means that an interruption can cause greater delay than the amount of time required to attend to the original task at hand. The research goes on to say that if a task is actually scheduled with a division or department head, rather than sprung on him or her as an interruption, it will take less time, and in effect, demand fewer resources from management. 

And in many cases, an interruption does more than set back the meeting schedule. A poorly timed interruption may undermine the perceived seriousness of your intent, because interruptions not only take your eyes off the prize, they signal to your collaborators and clients that you may not be all that serious about the prize to begin with. 

Another common obstacle to productivity is the preemptive interruption, or the "hard stop."  Too many critical meetings begin with the phrase, "I only have a half hour," when a half hour just won't do. If an issue is important enough for a meeting, dedicate the time necessary to get it solved. Piecemeal meetings tend to accomplish little and can actually waste time. Focus real attention on critical matters and don't allow a hard stop to hijack your goals. 

At Flaum Partners, we've developed several strategies to keep interruptions at bay. I ask each team member not to take a BlackBerry into our meetings.  Their email and missed calls will be waiting for them, whether they like it or not. 

I've also learned to ask the same of our clients; I suggest to them that if we're going to really drill down on the issues at hand and create solutions, then we will need everyone's complete attention. At that point, I recommend that we all shut off our BlackBerries and mobile phones. It seems a bit audacious at first, but this course of action conveys to everyone how serious we are about making progress on the project. In the end, great leaders develop their own strategies for shutting out the noise. Formulating that strategy needs to become a priority of its own.  

Just don't let anyone—or anything—distract you from it. 

 is managing partner of Flaum Partners and chairman, Fordham Graduate School of Business, Leadership Forum. He can be reached at 

Column

Leaders manage their time and focus their resources by limiting unwanted interruptions.

End the "Hard Stop"

Apple's approach to the digital music marketplace is a textbook example of game-changing, the process of re-defining an industry sector and/or product category to provide an unfair competitive advantage. Apple's combination of the iPod digital music player and the iTunes digital download service has totally transformed the music industry landscape, propelling Apple to the dominant position in both the digital music and audio player categories. In less than five years, Apple has become the number one music retailer in America with over 5 billion music downloads; it commands over 70 percent share of the digital media player market by selling over 40 million iPod units annually. In June 2009, Eli Harari, the CEO of rival SanDisk, effectively conceded that Apple's iPod has won the digital player competition, stating "You can't out-iPod the iPod."  

Game-changing has tremendous implications for pharmaceutical companies and its professionals. As the US and European pharmaceutical industry continues to transition through the mature or competitive stage of its life cycle, it is more important than ever for companies to play the game at which they excel. Pharmaceutical professionals at every level of the company need to understand the types and techniques of game-changers in order to identify and execute their own game-changing strategies and tactics.  

What is a "game-changer"? Game-changers like Apple are rule-breakers: they disrupt the industry's status quo and conduct a market makeover in order to play the game on a field where they can win decisively. The best game-changers actually evolve to become "game-makers." Game-makers dictate how business is done in their sector: they make the rules for other industry competitors to follow. Procter & Gamble, Coke, and Microsoft were all once game-changers that evolved to dominate their respective industries. Apple is seeking to become a game-maker in digital music by controlling the digital music format, ensuring its iPod is the only portable music player compatible with songs purchased from the company's iTunes music store, and by tightly managing its selected set of suppliers.  

Most game-changing companies transform a market by using one of three types of innovations: product, technology, or business model innovations.  

Apple was able to change the music industry by combining two different types of innovations: product (iPod) and technology (digital music downloads).  

Pharmaceutical companies have traditionally focused on product and technology innovations. For example, GSK created the world's best-selling asthma agent and combination product Advair (fluticasone/salmeterol) by developing the diskus, a novel inhalation delivery device. Allergan has become a specialty pharmaceuticals market leader by adapting two therapeutic products into first-in-class cosmetic products: wrinkle-reducing agent Botox was initially used for the treatment of strabismus or crossed eyes; eyelash enhancer Latisse was originally approved to manage glaucoma. Light Sciences Oncology is seeking to change the cancer treatment paradigm by using a drug that is activated by a special light targeted within a solid tumor. Its photo-therapy device Litx is currently undergoing Phase III trials for the treatment of metastatic colorectal cancer and hepatocellular carcinoma. 

Genentech and Amgen have been leaders in the industry-changing biotechnologies of monoclonal antibodies and recombinant proteins, respectively. Roche was quick to invest in and ultimately acquire Genentech for its expertise, which has resulted in the development of several blockbuster oncology products, including Avastin and Herceptin. By leveraging this acquisition and other capabilities, Roche is now poised to become an industry game-changer; it is the dominant player in the global oncology market—the largest market in the world. According to Decision Resources, Roche will be the only top 10 pharmaceutical company with overall US growth rates exceeding 3 percent during the next five years.  

Game-changers can create competitive advantages for pharmaceutical companies and products.

Pharmaceutical Executive-10-01-2009