Gil Roth01.26.07
Ask the Board
What New Year’s resolutions should the industry make?
The New Year's resolution should be: clean up the Pharma industry's tarnished public image! This could involve a public outreach and establishing an advocate for telling public the truth about why "new medicines" cost as much as they do, keeping innovation (Big Pharma's R&D Spend) in mind. Also since the industry is turning so "global" these days, the cross-country, cross-continent barriers are fading away and the global talent-search and off-shoring opportunities especially in Asia are coming to aid the large Pharma companies. This will only help Pharma enhance its R&D and manufacturing productivity and achieve better bottom lines for the stakeholders and stockholders.
Makarand Jawadekar
Pfizer, Inc.
Pfizer, Inc.
I would hope the industry would resolve to better balance wishful thinking (a.k.a. hype) with reality. The balance among satisfying/attracting investors, helping the sick, and doing good science appears extremely difficult to achieve. I do not have a solution, but I do know that the industry keeps getting hurt by overselling what is poorly known and thereby making really small disappointments (statistically speaking) look far more enormous than would otherwise have been the case. We did the same thing in Iraq. When the complicated is made to look simple, the facts will ultimately bite you. The unknown unknowns are many in biology. The industry should resolve to be realistic.
The days of the imperial CEO are over. Pharma must realize this. Dismissing CEOs and doling out $200 million in retirement benefits makes it very clear to those chanting the mantra, "Drugs are too expensive." These payments are not necessary and look real bad. This feeds red meat to the "control drug prices" crowd. They should resolve to be prudent.
Peter Kissinger
Bioanalytical Systems, Inc. (BASi)
Bioanalytical Systems, Inc. (BASi)
I believe the industry's New Year's resolution should be: "To work with the FDA to streamline the approval process for new drugs." For years this has been talked about, yet approval times have been like a yo-yo over time. The industry and consumers will benefit if this is done in a safe manner, which should be, and is a given.
Robert Calabro
OSG Norwich Pharmaceuticals
OSG Norwich Pharmaceuticals
The industry should resolve to develop a business model that relies less on developing blockbuster drugs and building an intellectual property fence around them, and more on developing a broader portfolio of smaller-market drugs that address patient populations whose needs are not currently being well met.
They should also resolve to work with regulators and patent offices on a system that preferentially rewards innovation and treating unmet needs over drugs that appear to be "me too" market entries.
name withheld by request
Get creative! There are so many interesting technologies and new approaches out there, but the pharma industry is still being criticized for its new drug productivity. Some companies are going to have to take more risks if they want to succeed, perhaps even with in-licensing. The pharma industry is still viewed as conservative by outsiders.
We are going to continue to see mergers and acquisitions in the industry, but I'm not sure that this really helps companies R&D-wise. So far most of these deals look to have had a short-term focus, e.g. cost savings. Another problem with this approach is that you can lose good staff — I still think this impact is underestimated. I think that companies should demonstrate more caution in the M&A area. There should be no shame in turning down a merger that everyone outside the industry is predicting!
If companies want to get more out of their R&D investment they are also going to have to make more use of outsourcing. I'm amazed when we still see some people questioning how they can "trust" an outsider to work on their product and waste time in asking how they would deal with zillions of hypothetical project situations and appear to base their decision to go ahead on this. If you are realistic and have good criteria for judging potential partners then you should know what you're looking for in a partner and be decisive. Too many companies are focused on costs alone, but this is where you can get your fingers burned. Since many companies have outsourced work successfully, including for best-selling products, there are plenty of examples to follow. It also shows that many outsourcing partners have the necessary experience to run projects. Furthermore, take a closer look at costs and how efficiently things proceed in-house before you criticize progress on an outsourced project. An outsourced project also requires good management skills from the sponsor.
From the regulators, the industry needs some direction in areas such as pharmacogenomics. What are regulators looking for in terms of this type of information? We know pharmacogenomics is set to have an impact, but the regulators need to express their views more clearly.
And finally (perhaps I'll get called naïve for it, but it stuck in my mind after traveling in China and India last year), I'd like to see Pharma doing more for "neglected diseases" in developing countries. A lot of the work has been in response to public and media pressure, but it should go beyond that. If people at the top of these companies took more of an effort to see what the actual situation is, they would be surprised at how just a little bit of investment can make an absolutely massive difference to people's lives. They are often already working in some of these countries, so they can make use of this existing presence. We've seen some of the braver companies get involved in partnerships, but others need to follow them. Also, they should assert themselves in these initiatives so the public partners get scrutinized for their work too.
Oh, and governments need to do more to encourage companies to get involved.
Faiz Kermani
Pharmbiosys
Pharmbiosys
The industry would be better served to highlight the high risks and high costs associated with drug development and production. Only through the expectation of high payoffs does a company or venture firm take on the risks of drug development. In discussions over the high cost of drugs, we usually only hear about the successes, never the failures. Given the high risk of failure, focusing on profits made from a successful drug shows less than half the picture. Making the effort to develop new drugs and novel therapeutic approaches should be applauded — not criticized — if it becomes a success.
Certainly the industry needs to work on reducing the cost of drugs, but this requires resources and efforts also. In the biotechnology area, producers have shown improved production yields. Ultimately, improved productivity will result in lower costs.
William Downey
High Tech Business Decisions
High Tech Business Decisions
While I pondered resolutions for the industry, I thought about the latest BusinessWeek (1/15/07) which contains two related articles. One is about the "Blowup At Home Depot — Behind the dramatic fall of an imperial CEO" and the other is the regular column by Jack and Suzy Welch.
Bob Nardelli, the Home Depot CEO, was one of Jack Welch's top people at GE, but he was passed over for the top job, in favor of Jeffrey Immelt. At Home Depot, according to the article, he "alienated customers just as thoroughly as he did employees." Mr. Nardelli is no longer the CEO.
In the Welchs' column, in answer to a question about a manufacturing plant in China, they responded, "The first principle is really a mindset: an understanding by management that your workers are your people." The second principle is, "Give workers a voice and dignity."
Before Home Depot was established, there was a comparable store with the same kind of merchandise Home Depot carries. As I was looking for an item one day, an employee was walking towards me wearing an apron on which was printed, "Ask Me." I waited until he came near me, and, as I opened my mouth to ask a question, he spoke first and said, "I don't work in this department." That store no longer exists.
So my New Year's resolution for the industry is: Make sure your employees and customers come first, even before the metrics of your operation.
Martin Steinman
The Pharma industry's New Year resolutions should be:
1. To prepare a strategy for changing political environment in Washington regarding government-negotiated pricing pressure.
2. To fight generic competition by all possible means, including authorized generics agreements and aggressive patent litigation and product line extensions.
3. To reduce overall product cost by strategically outsourcing clinical trials, pharmaceutical development, and manufacturing activities.
4. To aggressively seek biotech partners to license or acquire new drug candidates.
Dilip Parikh
DPharma Group, Inc.
DPharma Group, Inc.