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Drug industry leads in 'world class' competitive intelligence.
Pharmaceutical companies have spying on their neighbors down to a science. When it comes to competitive intelligence, the drug industry can boast a longstanding, deeply ingrained commitment.
This shouldn't surprise any industry insiders, however. Executives have nearly a decade before a product is launched to survey and seed the market.
Then once the product hits, regulations are strict, patent life is short, and competition--especially in primary-care fields--is cutthroat. In addition, in this era of consolidation, it pays to know not only your own market space but that of any takeover target.
Spook smarts doesn't have to be expensive, either, with the average budget between $1 and 2 million, according to Fuld & Company, a consulting firm that specializes in the field. In a recent report, Fuld surveyed 27 pharma and biotech companies and compared the results with 141 firms in five industries. The findings showed that 57 percent of pharma respondents--more than any other industry--have competitive intelligence staff reporting to C-level management. They were also most likely to surpass the million-dollar budget mark (26 percent of pharma companies compared to 16 percent in manufacturing and nine percent in technology.)
Fuld's report surveyed only internal intelligence programs--which are usually owned by employees who span departments from science to branding. "If they're doing their job well, they're actually leveraging the people inside their companies," he said.
Still, the report cautioned that the drug industry is the most polarized in terms of who is using competitive intelligence. Those firms that fell well below "world class" caliber were likely to be merely piloting competitive intelligence activities. "Even though as an industry they're considered world class for this study, some individual companies have a long way to go," said firm president Leonard Fuld. "They don't perform uniformly well." (Companies interested in seeing how they stack up against their peers can take a free self-test online at fuld.com. Respondents get automatic e-mail feedback.)
Fuld noted that pharma is using competitive intelligence primarily for "war games and strategy games"--to anticipate a competitor's move when two companies are racing to launch the first-in-class product, to thwart a generic threat, or to plan in advance of partnering with another firm. "These programs are built on years of preparation. Pharma companies have a longer view of the market," he said. "They see this basically as an insurance policy."
Competitive intelligence can range from regular, rigorous research to monitoring chat groups and online forums. Novartis CEO Daniel Vasella, for instance, "takes soft intelligence in a very serious way," Fuld said.
Mssrs. Garnier, Dehecq, and Kindler, take note.