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Biopharma's Engine Room: A Pharm Exec Innovation Roundtable

Pharmaceutical ExecutivePharmaceutical Executive-12-01-2014
Issue 12

Two words define the future of commercialization project management: Faster and Better

Two words define the future of commercialization project management: Faster and Better

Payer pressures to slow volume growth and drive down margins, a continuing wave of patent expiries, and fewer ripe targets for drug development have left biopharma companies with one ready remedy for hard times that is uniquely within their own sphere of control: finding better ways to manage those internal operations and processes that produce products. Project and process engineering is attracting more attention from the “c-suite,” while technology is unlocking the many efficiencies latent in the vast stores of information that companies collect on the long road to commercialization. In other words, it’s time to declare process innovation in drug development and commercialization as a strategic capability-when done well, it can spell all the difference in launching a new product, between life cycle hegemony and that hardly-worth-a-ripple “ho hum.”

To shed light on what works and what doesn’t, Pharm Exec convened a prominent global operations strategy consultant, UMT, and four big Pharma practitioners of the art of commercial effectiveness to discuss what makes their days a constant challenge in turning a world of multiplying left-field risks into manageable routines. If you are looking to find synergies in the research arts of serendipity, this group can.

            -William Looney, Editor-in-Chief


Roundtable Participants

  • William Looney, Editor-in-Chief, Pharmaceutical Executive

  • Benoit Miller, Partner, UMT Consulting

  • Will Mongon, Vice-President, Business Development, New Product Planning and Foundation Portfolio

  • Tim Phelan, Executive Director, Global Project Management, Merck Research Laboratories

  • Matt Portch, Team Leader, Commercial Effectiveness, North America Global Innovative Pharmaceuticals, Pfizer Inc.

  • Farouk Rhymaun, Vice-President, UMT Consulting

  • Caroline Sexton, Executive Director and Head, Program Management, Regeneron Pharmaceuticals

  • Amit Tangri, Vice-President, UMT Consulting


PE: The objective of today’s biopharmaceutical enterprise is to move seamlessly from the R&D phase to commercialization: accelerating development time to market; executing a strong global launch program, across geographies; building market share against the competition; and sustaining that lead right through the end of the product life cycle. Attaining this objective is easier said than done. Why-and how-does a commitment to functional integration help management navigate that often unforgiving transition from registration to the real-world battle for clinical acceptance and market share?

Amit Tangri, UMT Consulting: A distinguishing characteristic of the industry over the last 15 years is the growing gap between expectations and performance. Drug development times and R&D costs are rising, while the number of approved NMEs and utilization of branded innovative drugs, as a percentage of total scrips, is declining. The contrast leads to a singular conclusion: this is an industry that needs to be more efficient. It has to create process improvements that allow for greater selectivity in the products being pushed down the pipeline, at lower cost.

That is a difficult change to accomplish, for two reasons.  First, it requires a harmonization of functions across the entire organization, not just R&D, even though in practice such functions tend to be heavily siloed. Second, we see today a far more disruptive external environment that prevents the business from relying on a neat sequential path to commercialization, as was common in the past. It’s no longer possible to move a compound down the pipeline by just checking the boxes starting from preclinical, Phase III, and regulatory submission followed in close order by market access, promotion, and sales.  The pace is variable and the spaces where you engage are blurred; product teams have to be ready to address anything, at every stage of the process.

Scientific steeplechase

According to the FDA Center for Drug Evaluation and Review (CDER), the number of approved NMEs has averaged about 22 over each of the past 10 years. During the same period, company applications for market authorization have remained static, which has prompted CDER to state that it does not expect to see a significant year-to-year rise in new drug approvals. The numbers also show some big year-to-year contrasts in approvals, such as the drop from 32 approved NMEs in 2004 to only 20 in 2005 (see chart below). Here, the culprit was the fallout from Merck’s withdrawal of Vioxx, which considerably reduced the tolerance of regulators and industry for risk. Taken together, the approvals data suggest that, however good the science of drug discovery may be, there are an increasing number of hurdles that expose the industry to greater uncertainty, which given the long lead times in biopharmaceuticals, always must be expressed in terms of costs. To survive, industry has no choice but to raise its game internally.

PE: Isn’t demonstrating improvement in health outcomes an additional factor that requires drugmakers to focus on functional and process efficiencies if they want a product to succeed in the marketplace?

Tangri: Acceptance of a medicine is now built around a value-based model rather than the evidence-based approach, where all you had to do was meet the [randomized clinical trial] endpoints set by the FDA. Demonstrating value is a formidable task that, again, cannot be handled sequentially. Different functions-clinical development, P&R, marketing, sales, and medical affairs-all have to come together, starting from the very moment testing begins in human patients.  We have strong evidence of system and process failures due to the many drugs that pass muster at the FDA and then founder as payers and providers hesitate  to embrace the product under real-time market conditions. Why? Because the products usually have little to offer beyond proof of safety and efficacy. The people and capabilities best able to make that broader proposition were not in the room at critical stages of their evolution into products. Innovation-the way regulators might define it-is not enough. Operational excellence through functional integration is the pre-condition for success; without it, innovation remains an abstract concept rather than a driver of competitive advantage.

Leading edge lessons

PE: What is the most essential factor in overcoming these persistent barriers to operational excellence? How do you execute for success? 

Farouk Rhymaun, UMT: Our projects with client companies have yielded two examples that resolve some of the tensions inherent to operating in this new commercial environment. The first involved a company with eight new products it was preparing to launch over the next several years. It had no process in place to manage the abundance of assets, a task which for that company was unprecedented in its scale and complexity. The key flaw we identified was the absence of an information tool that would permit all the participants in the launch process to interact, share, and collaborate among the various strands of work, in real time.  

Hence, we designed with the company an operational management approach and a system that helped different functions, with multiple assignments, to immediately understand what they were doing both in the context of their brand or function as well as relative to other brands or functions.  Instead of dispensing raw data, we opted for a visualization platform that enabled the teams to actually see the connections needed at each stage of the product journey.  It was designed around accessibility in interpreting information, for data alone is useless unless it can be transposed into the knowledge required to make good decisions.

The second example of a process challenge is a company that went from managing about a dozen clinical trial programs per year to more than 100. As the data management requirements became vastly more complex, the company realized its existing clinical trial management system infrastructure was inadequate. Specifically, there was no cross fertilization between internal activities and the inputs from CROs handling the trial sites. To address this, we built what we call a “clinical explorer” solution that consolidated reams of information from different sources into one central repository, accessible to all. This considerably reduced the time spent searching through different systems to obtain data, making it faster to track the asset as it moved through the stages of a trial.

Both cases respond to this central problem in managing an asset, for the long term: maximizing available resources, removing organizational silos, and, by bringing useful information together in one place, extending the bounds of what is feasible through collaboration. There was a major time-saving component, particularly in expediting answers to questions from senior company management.

Matthew Portch, Pfizer: Consolidating and enhancing the usefulness and accessibility of key data is undeniably important, but how do you take that extra step in understanding factors like anticipating actions on market access that often play out only over a period of years? 

Tangri: Making sure information is “fresh” demands a cultural change in organizations, because people tend to be protective about sharing information within their control. Breaking that bond demands a system of governance that has buy-in from the very top of the organization. The other element to keep ahead of the game is generating constant feedback from stakeholders that can influence an asset’s long-term prospects in the market. It’s the only way to guarantee information is constantly updated and replenished.  

Rhymaun: I’d add another element. By extending the reach of useful data to more people, we broaden the scope of decision-making. It actually facilitates different conversations-conversations that in a silo information system don’t take place. This provides an extra measure of exposure to perspectives beyond the current status quo-alternatives that may make the future slightly more predictable.

The default option: Simplify

PE: Now that we have identified information management as a critical process challenge, what other issues are shaping your capacity to innovate in bringing products from the bench to the bedside? Where are the opportunities and risks?

Timothy Phelan, Merck & Co.: Complexity is the dominant issue we confront on a daily basis. Whether it is the outcomes research required to demonstrate value to a growing list of stakeholders, the intensifying competition that demands unrelenting focus on the customer, or meeting the stringent safety and efficacy mandates imposed by regulators, the stark reality is our work is getting progressively harder. Standing in place is not an option.

It may be counter-intuitive, but Merck believes the best way to fight complexity is to simplify. One key change is trimming responsibility for new product development to a core group of seven individuals with carefully defined functional coordination responsibilities, covering clinical science, regulatory affairs, clinical safety,  value evidence, supply chain, commercial, and project and portfolio management, respectively. The group is empowered to make and move decisions on behalf of the entire organization, and is accountable to three “c-suite” executives: the heads of R&D, commercial, and manufacturing, who act much like a investment committee that decides where the company should place its bets, allocating resources accordingly. The objective is to simplify layers of governance to enable our product teams to react to shifts in the external environment more quickly.

PE: Does simplification mean in practice fewer people?

Phelan: Yes. We are driving decision-making further down in the organization and making the functional areas accountable for their deliverables. A smaller team is also likely to be able to respond quickly to changes at every step of the program, whether it is nuances in trial design that affect the trial protocol, adjusting to regulatory mandates, or responding to  the competition. And we are giving them the ability to access top management to drive a quick resolution.

Culture of small

Caroline Saxton, Regeneron: Regeneron has the advantage of still being relatively small, so teams have ready access to decision makers to address issues and bring them to resolution. Our greatest challenge going forward is balancing our strong science-driven culture while driving value as we commercialize new medicines. To maintain innovation, it’s important that science and business operate separately while creating synergies among them that accelerate time to market.

Will Mongan, AstraZeneca: My group is geared to providing a commercial perspective throughout the entire product development process. As an asset moves through the R&D pipeline, there are periodic touch points with us, where we strive to ensure that the asset is best positioned to meet the needs of patients, providers, and payers in the marketplace. We monitor progress and constantly update our estimates about commercial potential as new information becomes available. The challenge here is making sure we have the right information at the right time so we are not blindsided or surprised by something out of left field.

PE: How does the trend toward a more global approach to commercialization affect your responsibilities? Doesn’t this impose yet another layer of complexity on the process?

Phelan: A global strategy means that nothing is done in a narrow or sequential fashion anymore. This means you have to make more choices as to where and how to deploy your resources.  It also requires initiating the development and commercialization process much earlier; it’s that early start that enables you to make those choices. And perhaps the biggest choice you have to make is what you are NOT going to do. Or to choose where to launch first, in order to apply learnings progressively, from one launch market to the next. It is surprising what you can accomplish with the gift of time; to have a plan ready to go-before you need it. For example, just by having some deep conversations with the manufacturing supply chain teams, we can define very precisely just how much capacity we will need to meet our launch obligations. That alone creates a cost advantage when we go to execute.

PE:  Where does market access fit in the process?

Portch: Market access is essential and here, too, the work has to be initiated very early. First and foremost is determining the value proposition around the asset and then considering whether that is something people will pay for. Handling this task well requires tapping a lot of stakeholders for insight that often cannot be found internally. It’s very different from the former days of the blockbuster, when the only decision was how many hundreds of field force reps you wanted to deploy on behalf of the product. An additional factor is extending these insights out in time-what is the commercial environment going to look like in two, three, or five years?  The US market is fascinating in this regard, because forecasting now involves assessing a customer’s ability to take on exposure risk: should we double up on our value proposition for the Aetna’s who are taking on a lot of new ACA exchange enrollees with scant prior-claims history? Or is the patient likely to bear much of the cost burden, which entails a very different calculation of value? It’s very complex. The pitch to the paying customer is looking very different than the case we make to the FDA.

Saxton: Satisfying market access and the regulatory authorities is challenging enough without accounting for differing requirements from country to country. In addition to this, frequent changes in the landscape (competitive, regulatory, political etc.) make a “one size fits all” global strategy a remnant of the past. The key is for the development teams to define the strategy, together with commercial, very early in the clinical development process. 

Do playbooks make sense?

PE: Many organizations have adopted a “playbook” approach to add more structure and predictability to the process of integrating all the necessary steps toward commercialization.

Phelan: A playbook can certainly be useful, particularly as a source of milestones and helping teams navigate through the organization, but care must be taken to ensure it does not become unduly prescriptive. Process can be an impediment to the flexible responses that allow companies to seize a competitive advantage. We must not let process trump the product. 

Portch: We find the playbook hard to square with the constant changes taking place in our market environment. It can miss important things, especially when the playbook is designed to guide decisions around global commercialization and launch. You’d have to build a pretty nimble document to track that.

Phelan: Another trend challenging the playbook is the desire of customers to have a dialogue that involves the entire drug portfolio. Formerly, the conversation focused on a single product. No more. It’s all about establishing value to the customer by leveraging the full assets of the company. And if you fail to expose your R&D teams to this expectation from the very beginning, there is a large handicap that is hard to surmount at later stages of the dialogue.

Portch: Yes. R&D people are passionate about a product they may have spent years creating in the laboratory. It’s hard to be objective about that customer across the table who just wants to know if he has to spend a nickel or a dollar to get it. This is all about building capabilities: do you have people on board prepared to relate to both science and the market? It’s the cross-cultural approach required to prevail in the new market environment.

Mongan: AstraZeneca has a tool we call enterprise leadership, the essence of which is being able to eliminate silos­-to change swim lanes. The premise is anticipating and understanding the environment you don’t know, because that is where you are most vulnerable. Relying on a playbook, by definition, means you are always facing backwards because it is based on learned experience. At AstraZeneca, we see the playbook as more of a checklist. It’s a tactical instrument, not a strategy blueprint.    

Saxton: A key competency for teams in navigating through change is how effectively they deal with operational ambiguity. A playbook can be useful as a general guide, but teams need to be agile and empowered to adjust and refocus quickly when the changes require them to move in a different direction.

PE: Is the classic CEO-led change management initiative still useful in creating this cultural mindset?

Portch: Pfizer has such a program. It’s called OWN IT, and CEO Ian Read put it in place when he assumed the top job three years ago. OWN IT has worked because it is being consistently applied. The imperative, to be responsible to yourself in actions with others, is now part of performance reviews and career development plans. Colleagues are free to start an open conversation about something that he or she believes needs to be fixed without being tagged as a bad news maven or a troublemaker.

Mongan: Personally, I believe change management is passé for most companies. At AstraZeneca, change is accepted as a given so there is no need to create any branded program-we are changing all the time.

Rhymaun: Many companies put the focus on behavioral changes through a culture that embodies a few transcendently clear management principles. It leads from the top, not spreads from the bottom. It is aware that running a business is all about people. And what people want most of all is certainty as an alternative to disorder. People wish to feel comfortable in dealing with uncertainty. That means management must be more tolerant of failure. There is an alternative formula called “conditions of satisfaction” that grants managers more leeway to define their own pace in getting to the right place.

Phelan: When Merck decided to simplify decision-making and empower teams to act and execute, the process started with two people: the heads of R&D and commercial. They met with SVP positions with oversight over key functions. The SVPs then worked out what specifically they expected the product teams to deliver to them. Once  they were aligned, the expectations filtered down throughout the organization-here is what we want, and this is how we need you to behave. It’s a living dialogue-oral feedback in real time. The process has worked.

PE: Are there particular process issues or challenges in moving from the strategy phase to execution?

Portch: Such a transition can be very complicated when you define the value proposition for an asset and then try to motivate the field force to engage around it. Many of our sales representatives were educated to sell in a different way; today, it’s all about plying the customer with hard evidence to justify the sale,  in terms of superior health outcomes versus the competition. The reps have to be told why this is important and to understand the “big picture,” which from the customer perspective is critical to closing the deal. Pfizer has found this demands a lot more time spent in telling the sales force “why,” in addition to how.

Information: From silos to synergies  

PE:  Do you have examples from your work on how the vast amounts of information now available about customer habits and orientation can be applied to leverage commercial success?    

Mongan: Tackling the data revolution starts with awareness that the human part of the solution is as important as the technology. AstraZeneca is zeroing in on all these new information capabilities to better assess how our employees in different functions interact with the customer. We have our field force, our medical reps, and the key account teams in managed care markets-each of these groups have different touch points with customers. How do we bring all the interactions together and turn these into insights that will help us move market share? The learnings can be quite powerful when everyone has access to them, and so we are spending significant amounts of time and money to make that happen. In fact, we recently made a decision to consolidate all our IT activities to be managed internally instead of being outsourced. That’s because we now see IT as a strategic asset.

PE: What is most necessary to making information really work for you in the project management field?  

Saxton: The key to making information work for collaboration and communication is establishing an unequivocal “single version of the truth.” It is also important to define who owns that information and the business rules around how it is used across the organization, as well as deciding who can have access to it. Moreover, the concept of data pools-or data lakes-gives us powerful methods to glean real insights from available data. Certainly, technology can be a useful tool, but it is critical to ensure that your IT initiatives are driven by the business.    

Phelan: Commercialization proceeds on the basis of a series of “go/no go” decisions. Good information can tell us what else might be going on that could affect our decisions. The last thing a project team wants to find out is that a decision should have gone differently if other information was more widely known. It provides the opportunity to hold off on that decision and wait for these other identified risks to play out. The capacity to scan more widely for alerts is one area where we can increase our effectiveness in using IT.

Benoit Millet, UMT:  Another way of referencing this is what we call peripheral vision. Information should be available in real time, but often it is not, so a way to compensate is to work for that broader context, shifting away from the predictable center, gazing instead to the left and right. People can be very myopic, so there is real value in being able to access information that is not entirely visible through your own function.

Phelan: Structures tend to channel how the information actually gets used. Hence, we fall back on the best attributes of a project manager. First, they should value the contributions of every functional expert in the team.  What these people do, they tend to do very well, so don’t get in their way. Second, they need to be aware of the interdependencies among them; this is where a good project manager can bring the organization to a higher level of performance. Third, they must pay attention to the “white space,” where one task is in transition to another. If you can reduce that time and effort, you get a pay off in terms of everything from speed to a reputation of being a great partner. Everyone wants to work with an organization known for executing well-many companies will pay a premium to work with that “partner of choice.”

Partnering as a process

PE: One response to the complexity of development and commercialization is sharing the burden with external partners. How does the imperative to “partner well” figure in cross-functional process innovation? 

Mongan: It’s essential. The distance between program management in drug development and business development-M&A and licensing-has gotten a lot shorter. Partners are also savvier about extracting tangible commitments. Just trusting our good judgment doesn’t work. Of course, every deal is unique and there are lots of qualifications. But you are rarely going to slip if you follow the golden rule- treat any partner as you would like to be treated.   

Phelan: Potential partners are interested in assessing Merck’s capabilities, so we are working closely with business development colleagues to help address their questions. For example, when we license out an asset, partners want to know the level of support we can give them since we had the head start in developing the asset. Being able to give that out-licensing partner a good development plan is absolutely critical to sealing the deal.

PE: For those of you in big Pharma, has consolidation through larger mergers changed the environment for project management and process innovation? What’s the impact been on your work?

Phelan: At Merck, our role has expanded. Earlier this year, we acquired Idenix, a small biotech where innovation is core to their DNA. This was a great opportunity for us to inventory all their ideas and spread them across our enterprise. While most people play in one segment, we are expected to work across all therapies and functions. There are lots of hidden gems in even the smallest of acquisitions. We find them, and fuse their creative DNA to ours.

Portch: This is also true at Pfizer. Our early acquisitions were mainly about the product assets. Now, it’s about the human capital and cultural attributes as well. The combination with Wyeth is especially telling, as Pfizer deliberately kept many of their key people in leadership roles and thus helped transpose much of that company’s culture. The result is that Pfizer today is a more open environment.

Keeping vendors close

PE: How do you manage key vendor relationships today?

Mongon: Compared to other industries, commercialization in biopharmaceuticals is expensive. Management tends to see-saw between trying to cut the number of vendors-many doing the same things-and adding them back. The latter happens after the cuts leave you with only one or a few vendors, who exploit that privileged position by raising fees. So it’s a constant cycle of expand and contract. But the motivation is always to take costs out of the commercial side of the business, wherever possible.

Portch: There is also the fact that relying on one vendor per assignment diminishes the diversity of perspectives you need to render the best decision. Vendors can be helpful, too, in helping to implement strategic program changes that the regular organization might resist. But the value is often over-stated, as vendors also carry an instinct for self-preservation with the people who pay their fees.

PE: Is the global supply chain an integral element of process innovation? 

Mongon: It’s high on the agenda.  A decade ago, the supply chain was an operational, not a strategic, issue.  Costs were immaterial because nearly all medicines were small molecule and easy to manufacture and distribute. This is no longer the case: biologics are hard to replicate and production must proceed in small batches requiring significant monitoring and oversight. Costs of manufacture have risen, so this is getting the attention of people at the top.

Phelan: Biologic drugs require mastery of both upstream and downstream production capabilities. There is a lot that can be learned, even in the formulation process, by people with extensive downstream experience. You need to incorporate that experience to succeed in biologics. Process innovation in this world is actually just as important as the product. A decade ago, what we did was create a medicine and then build a plant to make it. It was a single supply chain. Now everything-from the API to the pill coating to the replication and synthesis of living organisms like proteins-comes from multiple sources and destinations, all merging at once in a networked chain of logistics. That requires strong management.

Valuing IP

PE: Another objective is wresting maximum value through the end of the product life cycle. With that in mind, what is uppermost in managing the intellectual property portfolio?

Mongon: Our industry is IP. It is still rare to see know-how being resourced for commercial purposes outside the scope of the traditional patent. In the larger tech world, the value of IP is not always connected to a particular asset. In biopharmaceuticals, that link is still clear and strong.

Phelan: IP is being managed more intensively in the context of active, anticipatory planning around loss of exclusivity. Companies used to simply accept a loss of exclusivity (LOE) without proactively seeking to manage the transition. Today, considering how to maintain the status of the brand begins very early, because we have discovered that LOE doesn’t necessarily mean loss of revenue. It’s also true that in a global market, LOE rarely occurs all at once, so you can apply different revenue retention strategies for different countries.

Portch: It’s important to address this question globally. Our branded off-patent business is booming in Asia, even as revenues drop precipitously when LOE occurs in the US or other mature markets.

Millet: As biologic drugs begin to dominate the market, it is getting difficult to set a specific metric or value around IP. The molecular composition of these products and the diversity of the science behind them make any such calculation quite complex. In addition, many new products are the outcome of a shared effort, where big Pharma provides the process expertise while smaller biotechs create the technology.  Partners have to figure out how to divide the IP: who owns which part?

Project management: The next wave

PE: To sum up, how does each of you see your role in your company changing over the next three to five year planning cycle?  What needs to change to help you fit better into the new-and still rather shapeless-business model for tomorrow’s pharma?

Portch: Rather than changing significantly, I think the mandate of project and process management will be reinforced.  There is a critical need for direction, clarity, and scale in taking limited resources and deploying these -surgically-to develop and sell our products. One urgent theme here in the US is looking at our sales and account management resources to apply these human assets effectively in managing the mix of tools-like rebates and samples and co-pay cards and coupons-to bring down expenses while raising our game in providing greater access to our medicines and ultimately generating revenues. We know that achieving this will depend on being able to adapt to different realities, because what works in Minnesota or Boston will not succeed in Florida and Texas. And that requires not just superior logistics and organization but the interpretive skills, buttressed by constant feedback, that enable us to be first, before the competition. We have to apprise the ROI from virtually every action we take in the field. Analytics is going to be a bigger part of the job.

Mongon: Program and project management is blessed with a simple, self-evident mission: to help the entire organization make the best decisions. The challenge is commensurate with the growth of IT over the next few years. Taking the cue from Murphy’s Law, there will a constant doubling of data available to us. Applying that information to make it quality information, relevant to the business, is more important than ever in dealing with an abundance of risk and uncertainty in the market.

Saxton: Project and program management will continue as a critical function in driving organization value and effectiveness, ensuring communication and cross-functional integration and doing this while sustaining a culture of scientific innovation to keep up with the competition. But this level of effectiveness cannot be realized if the end game isn’t clear. That involves the creation of better ways for people across the business to talk to each other, connect their work to the rest of the enterprise, and make better decisions more quickly. It will also continue to be important that the function be close to decision-makers at the top; as their buy-in has always been vital to the success of the project managers’ mission.

Phelan: The imperative over the next few years is twofold: (1) ensure our corporate leaders have the right information in making difficult choices; and (2) rally the entire organization around the choices they make, and execute quickly around them. I agree with the others, too: we need to stick close to the senior leadership.

Millett: This function is going to grow in stature. The commercial environment in biopharmaceuticals today is like warfare, where success depends on trained multi-functional product units that can operate independently, act rapidly, with a singular focus around a clear objective. Other sectors like automobiles have already moved decisively in this direction, with more operational autonomy for those elite teams tagged with developing a new car platform in a six or seven-year cycle time. That time frame is longer for biopharmaceuticals, so the challenge is to keep the team active and knowledgeable for the duration, from R&D to market launch and beyond. Maintaining that balance between autonomy and control will test every project manager and the leadership team.  The bright spot is our industry is increasingly willing to look outside for ideas on how to do that.  Industry practices are more open today than they have ever been.

A future left curve?

PE: What about potential disruptive threats?  Can you identify any big intangibles that will require a decisive response from you and other process experts?

Portch: The commercial model in the US is undergoing a radical shift, to one that demands much more from our market access capabilities.  Access decisions taken by providers will follow risk; the upshot is the providers will end up owning that risk.  It’s a very different calculation than what exists for insurers and PBMs, whose perspective concerning the patient is very short-term.  If we handle this institutional change well, and extend our partnering reach to include ACOs and integrated care companies, then it could be a net positive for us. That’s because the providers carry a risk exposure that incentivizes them to consider patient health over time. Wellness, total cost of care and health outcomes associated with keeping patients out of hospitals really matters to them. 

Mongon: There is also an implicit threat in the abundance of information about every aspect of health care financing and delivery.  The burden is on our industry to ensure the information benefits patients rather than to curtail use of medicines.

Portch: The truth is the five major health systems and three dominant PBMs that cover more than 150 million insured lives in the US possess more information about our brands than we do. What they do with that knowledge is a strategic issue for us.  

Phelan: Balancing size and science is another imperative. The global burden of disease is very large. It is logical that companies whose business it is to address that burden be large as well. It pays to be large-we face significant commercialization costs due to the longest development cycle times of any industry. Yet medicines discovery itself proceeds in small, incremental steps; big Pharma has to fill its pipeline by being as nimble as the smallest biotech.   And there is no management theory to show how to navigate successfully between these two opposites. Lots of small innovative science based teams tied to a big footprint: the company that does that well is well positioned for the future. 

William Looney is Pharm Exec’s Editor-in-Chief. He can be reached at mailto:wlooney@advanstar.com.


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