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Pharma Leadership Challenge In Post Covid Paradigm

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Bringing a long cherished relief to many, on September 15, 2022, the World Health Organization said, ‘we can see the Finish Line’ for the COVID-19 pandemic but it’s not over yet’. As I see today, several things are changing pretty fast in this scenario. Such as, not so long ago – on September 27, 2021, the same global health organization predicted differently: ‘World Will Live with COVID for Foreseeable Future.’ It further highlighted “It is dangerous to assume that omicron will be the last variant, or that we are in the endgame. On the contrary, globally the conditions are ideal for more variants to emerge.” The Wall Street Journal also reported on September 18, 2022 that the US President Joe Biden too  feels, ‘Covid-19 pandemic was over’ in the United States.

Be that as it may, I reckon, the world is not going to replicate to the pre-Covid mode of working, any longer. The Covid-19 pandemic has clearly made some impactful changes in the most work scenario, across the world. This has been revealed by several recent studies. With this perspective, in this article, I shall dwell on the challenges that the pharma leadership teams will face or are already facing, as the world shifts towards the post Covid paradigm.

Four critical areas for change:

To illustrate this point, I will focus on just three critical areas for pharma players, as follows:

  1. No going back to the pre-Covid mode of working
  2. Create a more employee focused organization for future success
  3. Determine the right size of digitally savvy field force in the new paradigm 
  4. Increase online share of voice in represented therapy areas and identify pharma’s digital world opinion leaders.

Why no going back to the pre-Covid mode of working:

With the onslaught of the Covid-19 pandemic on people’s lives and livelihoods fast receding, the need for some critical changes in several areas of pharma business, is now being felt by some forward looking astute pharma leadership teams. Recent studies, such as, the Gartner paper of June 16, 2022, among others, vindicate ushering-in some of the following changes in workplaces:

  • Ongoing changes in the way people work have transformed employees’ relationship, and their expectations of work.
  • Hybrid work could be a great opportunity, particularly for diverse talent..

Another article in this regard, published in the Harvard Business Review on January 13, 2022, capture 11 trends that will shape the work, in general, from 2022 and beyond. When I put some of these in the pharma space, it may include the following:

  • Employee turnover will continue to increase, as hybrid and remote work becomes the norm for knowledge workers in pharma companies.
  • Many repeated managerial tasks at various levels, will be automated, creating greater space for them to build more human relationships with their peer group and direct reports.
  • The tools used for working remotely are also being used to measure and improve employee performance on an ongoing basis.
  • The complexity of managing a hybrid workforce may drive some employers to evaluate a ‘return to the office’ with its pitfalls and benefits.

Thus, creating an employee focused organization becomes critical.

Creating an employee focused organization will be critical:

In the current scenario, the importance of being able to afford employees maximum flexibility, adapting and flexing to their individual circumstances and needs, is increasing manifold. This, has also come out very clearly in a number of studies, including one paper of the Healthcare Consulting Group (HCG), as reported on July 25, 2022.

Thus, nurturing employees’ desire for personal and professional growth, besides motivating them with a strong sense of purpose to their work, has become foundational to being an attractive workplace, more than ever before.

Is the pharma industry right-sizing the digitally savvy field force?

One can pick up several signals in this direction from what is happening, as the industry is opening-up with a rapidly declining onslaught of the Covid-19 pandemic. Various studies vindicate the intent of field staff reduction by the pharma industry. Today’s environment requires a digitally savvy field force of optimal size, which may vary from company to company.

For example, the article published in the Reuters Events Pharma on May 5, 2022, in this regard, elucidated “While Reuters Events Pharma’s own recent polling of the industry suggests a moderate reduction in numbers over the next couple of years, others see signs of more dramatic change.”

Many pharma players are now pondering – during Covid pandemic when companies were making so many less face-to-face calls, sales were OK. Now, when the intensity of the pandemic is receding, do they need the previous sales force numbers to make more such calls?

The general feeling appears to be that the old practices aren’t as productive as they were before, in the changing scenario. Thus, the paper underscored: ‘So with the largest players are already thinking about how to do more with fewer boots on the ground, how do they go about it?’ It concluded by saying: ‘No one is saying it is easy then, but the imperative for change is clear.”

Pharma customers’ online engagement is increasing with a low share of voice of companies:

This is yet another critical area of change where drug industry needs to strengthen its online voice. Several studies indicate that even a tiny part of most pharma companies’ online conversation about their represented disease and therapy areas doesn’t get captured in Google search. For example, yet another recent paper on this subject, published in the Reuters Events Pharma on July 05, 2022, confirms this point.

The article highlights: ‘Around 80% of patients Google for a recommended or newly prescribed medication. And doctors routinely use search engines too – to stay up to date, to verify assumptions and so on. Indeed, it may be no exaggeration to say that the answers found online are possibly the biggest influence on patients and HCPs today. Understanding their real-world digital information experience is, therefore, critical to identifying the content influencing their behavior.’

In today’s world, what these customers see and hear via search engines may shock many, the author emphasized. The study also reveals, despite many pharma companies’ investment in evidence-based, balanced, and accessible content designed for HCPs and patients, this is often buried far out of reach from the billion-plus health-related questions being asked of Google each day. ‘Pharma’s online voice often simply isn’t cutting through,’ it concluded.

What needs to be addressed soon in this area:

Each pharma marketer may wish to ascertain through data-based studies, which voices are dominating these conversations. And also, the nature and quality of the company’s own digital conversation and its share of voice. This is, besides getting to know who the digital opinion leaders are. Then, the task will be to find out ways to work with these people and share the company releases with them, requesting for their inputs, if any.

Conclusion:

The experience of the Covid pandemic and lockdowns has changed work patterns in many industries from what those were in the pre-Covid days. The drug industry is no exception. According to recent studies, two out of every five workers have either switched jobs or are actively looking for another that will fit into their working needs better, and with some remote work. This trend, being a common expectation, is gaining ground.

Thus, making an employee centric organization is now more important than ever before. Bringing together the best of remote working and office locations, as centers of excellence for team building, learning and innovation, is emerging as a central part of the pharma leadership challenge, as an HCG study, reportedly, also points out. It is generally believed that employees ‘who feel connected to purpose at work are more productive and more likely to stay.’ In tandem, pharma leadership teams also would require leaving a lasting impact on everyone’s work, which will be more tangible to them.

Alongside, as several contemporary studies indicate, and I also wrote in this blog on April 29, 2019 – ‘Adopt A Hybrid Business Model For Better Sales – Not A large Field Force,’ each company’s field force number also require a fresh look now with a focus on digitally savvy individuals. Another reason being pharma customers’ online engagement is increasing fast where most companies have a very low share of voice, as the search engine reveals. Consequently, identifying, partnering and in-depthunderstanding of key digital opinion leaders has become critical in creating a digital content that will influence the customer behavior. As reported on September 26, 2022, pharma major Sanofi, apparently has taken a major step in this direction.

From this perspective, it appears that the pharma leadership teams have a task cut out for them to effectively respond to the challenges of change in the post Covid paradigm – in search of pharma business excellence.

By: Tapan J. Ray     

Disclaimer: The views/opinions expressed in this article are entirely my own, written in my individual and personal capacity. I do not represent any other person or organization for this opinion.

Impact of The Cost of Pharma Marketing Failure On Patients

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‘About half of all products launched over the past 15 years have underperformed pre-launch consensus forecasts by more than 20%.’ It’s one of the findings of a recent study by L.E.K. Consulting, going back to 2004. This number is besides the cost of failure while discovering a successful New Molecular Entity.

Adding this to the cost of the product innovation and development, clinical trials and other regulatory expenses, the wasteful expenditure becomes mind boggling – for any unsatisfactory launch performance. In such a situation, the probability of creating newer blockbuster therapies is not getting any easier.

As is believed by many – and vindicated by several studies, new drug marketing cost is more than its R&D cost. Which is why, ensuring success of a new drug launch is critical to fund new drug innovation – on an ongoing basis. Consequently, leadership focus on high ‘launch success’ rate is so important – as the good old saying goes – ‘well begun half done.’

In addition, prudent optimization of the success rate of new products may also help the company avoid irresponsible pricing, while improving the profit margin. In this article, I shall deliberate on the impact of the cost of marketing failure on patients, in general. Alongside, the avoidable ‘soft ground’ that marketers may wish to avoid while delivering unmet value to patients.

Big Pharma’s Sales and Marketing spend is more than R&D:

According to another recent study of October 27, 2021, ‘in most cases, more of the dollars spent by drug manufacturers go toward selling and marketing costs than toward research and development (R&D) for new treatments, cures, or expanded indications and uses of existing drugs.’ For example, as the paper highlights:

  • AbbVie, which manufactures branded drugs like Humira, spent $11 billion in sales and marketing in 2020, compared with $8 billion on R&D.
  • Bayer, which manufactures branded drugs like Xarelto (codeveloped with Johnson & Johnson) and Eylea, spent $18 billion in sales and marketing, compared to $8 billion on R&D.
  • Johnson & Johnson, which manufactures branded drugs like Xarelto (codeveloped with Bayer) and Stelara, spent $22 billion on sales and marketing, compared to $12 billion on research and development.

Therefore, just as R&D expenses have to be made more productive, so are the sales & marketing expenses, where the expenditure towards new product launches is a critical component.

Why a successful new product launch is important:

An analysis by Deloitte in this area, published on March 26, 2020, found that most new drugs continue with the revenue trajectory set at launch. It said, about 70 percent of products that miss expectations at launch continue doing so in subsequent years, and around 80 percent of products that meet or beat expectations continue to do so afterward. Thus, launch success of a new product is very important, both for the organizations and the patients.

A successful new product launch helps both the company and patients:

Correctly assessing and leveraging full commercial potential of a new product through its effective launch helps both the patients and the company. This subject was discussed in a recent article, published in the Fierce Pharma on October 25, 2021, in the context of many drug launch disasters. The areas of benefits, I reckon, include the following:

  • Patients’ unmet needs are met at a reasonable price
  • Manufacturer can recoup its research and development costs.
  • Fund future drug discoveries.
  • Satisfy investors with handsome returns.
  • Creating a sound brand performance base – as a strong launch is arguably the most critical step in a new drug’s lifecycle.

New product launch failure is across the disease areas – from Big Pharma to Startups:

As the above December 18, 2020, study by L.E.K. Consulting points out that new products’ launch failure is taking place across the disease areas. These include,  Oncology, immunology, infectious disease, ophthalmology, blood disorders, brain diseases, and cardiovascular and metabolic disease. Similarly, the companies responsible for such failure span across global pharma majors to biotech startups.

Why many companies are failing in this process:

To help ascertain the depth of this issue, let me start with the key objective of a new product launch, which is effectively delivering the holistic value of the brand which consumers would appreciate. Several papers also acknowledge, to succeed in this area, pharma players need to prepare their data-based launch plan with cerebral power and ensure that the strategy is working and is being executed flawlessly.

A large number of studies find, ‘many companies fail in this process, due to a combination of factors.’ Some of these are uncontrollable, but many of which are very much within a marketer’s control.

Examples of uncontrollable and controllable variables:

Uncontrollable factors include post marketing approval drug safety issues. Reports indicate, ‘One-Third Of New Drugs Had Safety Problems After FDA Approval.’ This is being reported even in recent times, like, ‘new safety signals that cropped up after the approvals of Novartis’ eye drug Beovu  and Sanofi’s dengue vaccine Dengvaxia.’

Whereas, controllable factors include, poor product differentiation and other management missteps, besides ‘limited market access, poor understanding of market needs or misjudgment of competitive threats.’ For example, poor product differentiation and other management missteps were, reportedly, ‘the cause of trouble for Clovis Oncology’s Rubraca in the PARP inhibitor space, and Merck & Co. and Pfizer’s Steglatro in the SGLT2 field.

Key success ingredients to focus on:

Since long, various research, including one by Bain & Co dated October 2017, has highlighted that over 50% of new product launches are underperforming. This situation can’t, in any way, be accepted as a ‘thumb rule’ by pharma marketers, any longer.  Mainly because: ‘When a drug misses its launch projections, there’s a high likelihood that it will never recover that revenue,’ as their study findings underscore. From this perspective, listed below are some of the basic areas to focus on for greater launch success, as I have experienced:

  • Early launch planning – well before the regulatory approval for new products.
  • Data-based and well-tested target-audience identification, the target markets’ selection and key opinion leaders need to be selected for greater focus in effective stakeholder engagement.
  • Creating differentiated value-propositions that addresses targeted patients’ unmet needs, and, in tandem, offers scope for commensurate premium pricing, are vital.
  • Product pricing should be based on quality of value delivery to patients that they can perceive and would acknowledge. Misvaluing a brand, and just focusing on those who can pay, may attract negative publicity, creating a key barrier to success.
  • Current competition, their ongoing counter strategy, new market competitors and other launch challenges need to be carefully mapped, for strategic fine tuning or course correction, in time, wherever and whenever needed.
  • Execution of the launch plan must be accomplished with military precision, as it were.

Conclusion:

As the above Bain & Co paper articulated, ‘The most consistently undervalued factor contributing to a successful launch is the way leadership teams organize and the manage the launch process.’

It’s again not too difficult to understand that the net accountability of the cost of marketing failure, which is a major contributing factor to stifle the R&D funding, in many cases, squarely falls on pharma leadership.

Instead of taking corrective action in this critical area, most of them choose the easy path – increase new product pricing to achieve targeted revenue from a smaller unit sale of the brand. The net impact of which is on patients due to access barrier caused by high prices.

Such products, without clearly differentiated value propositions that patients would recognize, would further increase sales and marketing costs, and could even result in marketing malpractices. Under this backdrop, serious and thoughtful attempt in making all new product launches successful money spinners, as respective brands will merit, may help the pharma leadership to create a win-win situation for both the company and patients.

By: Tapan J. Ray  

Disclaimer: The views/opinions expressed in this article are entirely my own, written in my individual and personal capacity. I do not represent any other person or organization for this opinion.

 

Visible, The Green Shoots of Digital Transformation in Pharma

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Currently, one gets a mixed feeling about the progress of digital transformation in the pharma industry. This is despite various reports confirming that a number of major initiatives in this field have been taken, especially by Big Pharma, globally. Moreover, these are primarily driven by the company CEOs, as it should be, and adequately backed by heavy investments.

Another recent trend can’t also be wished away, as corporate C-suites find a new breed of leadership – Chief Digital Officers (CDO) as occupants. It has already happened in several top pharma companies. Alongside, one can spot in this milieu, a plethora of private ‘digital trainers’ – wearing interesting titles and offering courses of many types, especially for pharma line managers.

On the flip side, many experts feel that ‘digital transformation of business’ is currently more a buzz in the drug industry than reality. These are, apparently, piecemeal attempts of converting analogue formats to digital, in a number of functional areas to improve operational efficiency of the same process.

Thus, it’s time to go for a reality-check at the ground zero, to ascertain the overall progress of the industry in this area, at least, in the last five years. While doing so, in this article, I shall try to hear the views of the top company CDOs on the nature of the challenge, alongside examine some credible research findings. Let me begin this discussion by looking at where exactly does the pharma industry stand today in this space, as compared to other industries.

A fact-check:

That many players in the drug industry, continue to have no clear digital vision and strategy, was established in the ‘Harvey Nash/KPMG CIO Survey 2018.’ This survey is claimed to be the largest on IT leadership in the world, with almost 4,000 participants across 84 countries, representing over USD 300 bn of IT budget spend.

The report provides a snapshot of the pharma industry in several areas, particularly where the industry’s responses differed significantly from those across other industries. As I go along with my submission, I shall fact-check and quote from this data. Let’s find below the industry response to the following two key questions:

A.‘Does your organization have a clear digital business vision and strategy?’

Industry

Yes (enterprise-wide)

%

Yes (Within business units)                      %

No

%
Pharma

23

28

49
All industries

32

27

41

The second question is even more specific:

B.‘Does your organization have a Chief Digital Officer or someone serving in that capacity?’

Industry

Dedicated CDO

%

Someone else in that role                            %

No

 %
Pharma

4

37

59
All others

11

39

50

That said, let me also acknowledge, enough evidences suggest that a sort of ‘digital warming-up’ has commenced in the industry for some time now.

‘Digital warming-up’ has commenced:

That the process has just begun, was captured in several reports. Let me illustrate the point, citing an example of the article, titled ‘Marketing outside the box’, published in the Pharma Times Magazine of May 2017.

Considering blistering pace of progress and rapid adaptation of digital technology in businesses, it is interesting that a couple of years ago, the above article highlighted exactly what many would articulate even today. The author noted: ‘Think pharmaceutical marketing these days and the buzz words digital, consumer engagement, multichannel, and closed-loop all come to mind.’ Focusing on the possibility to make it happen, sooner, the paper added, ‘There is now a dizzying array of tools, technologies and tactics that can be combined in various permutations to create marketing campaigns unheard of a mere five to 10 years ago.’  Thus, the ‘digital warming-up’ notwithstanding, the key question, I reckon, is, about two years down the line, how many drug companies have started maintaining an enterprise-wide digital business strategy?

A soft target – for rationalization:

To rationalize the leisurely progress of this key initiative, one may possibly choose the soft target and say,drug companies being a part of a highly regulated and tradition-bound industry, are late to fathom the indispensability of digital transformation of business. But this justification is open to many probing questions. One such counter-query could be – in that case, why many constituents of as stringently regulated industry, if not more, – financial services business, including banking, are galloping ahead with digitization?

Even if, the above rationalization is accepted at its face value, the other question won’t also be too easy to answer: Why digitization is not gaining momentum in the pharma industry, as much as it should, particularly as compared to other highly regulated industries? Such probes understandably may not attract too many affirmative answers. However, the crux of this issue was reported in the headline of Fierce Pharma on June 25, 2019 – ‘Pharma’s got its chief digital officers. Now let’s see the results.’

In pursuit of holistic outcomes with digitization:

The August 2015 paper of McKinsey, titled ‘The road to digital success in pharma’, also acknowledged, just as other related one, the drug industry can play a pivotal role in the digital transformation of healthcare – changing lives of many. While pointing out, capturing this opportunity requires identifying the right initiatives, the article cautioned the industry, it needs to run harder ‘to keep pace with changes brought about by digital technology.’

There are indications that some top pharma decision makers have also realized that this change has to happen, sooner – assigning top organizational priority, and demanding sharp focus of all. As I wrote in my article of October 29, 2018, several companies have created a brand-new C-Suite position, to ‘lead the company’s digital efforts across research, discovery and business processes.’

The initiative intensified in the last two years:

According to May 13, 2019 edition of Biopharma Dive, seven of the nearly thirty pharma and biotech companies valued at more than USD 10 billion has named a Chief Digital or Information Officer (CDD/CIO) on their executive committee. Such placements facilitate greater influence for organization-wide changes and signal that they are taking the potential of digital technologies seriously to transform their respective business models.

Interestingly, six of those individuals were appointed to top management within the last two years. This shift comes, as tech companies like Amazon and Apple inch further into medicine, in a different form, though. Taking a cue from this emerging trend, some pharma majors are also merging research and development of new medicines with digital technology and big data. Thus, even CDO responsibilities are going through a curious metamorphosis.

Is CDO position a temporary one?

This question is aptly answered in the 2019 Report on the study of CDOs conducted byStrategy &, PwC’s strategy consulting group. The paper finds, the elevation of CDO at the Corporate Executive Committee or the Board level, ‘reflects the growing recognition that the digital transformation agenda now has strategic importance to most organizations, and that, unless it is driven from the top of the enterprise, it will not have the required momentum to drive business change.’ Overall in business: ‘More than half (54 percent) of CDOs have board-level status today, up from 40 percent in 2016’, the report highlights.

Although, it is construed as a general industry trend today, the report however, captures a clear dissonance. It found that leaders at many companies believe that putting a single person in charge of digital transformation may not be the best approach, as it is an intrinsic strategic priority, across the whole business, where agility becomes critical for survival. Thus, the researchers felt, as digital transformation becomes part of the core business, the next step will possibly be for the CDO to disappear. When it happens, digital transformation will become the responsibility of every member of the executive team of the organization.

Be that as it may, we shall cross that bridge when we come to it. At present,the basic groundswell for digital transformation of the entire business, is created from the C-Suite of the CDO. Thus, let us dwell on the scope of CDO in a pharma company.

Current scope of CDO in a pharma business:

Let me illustrate this point by quoting from the Press Release of Sanofi, dated February 12, 2019, appointing their CDO. It said, the CDO will be responsible for enhancing Sanofi’s strategy to integrate digital technologies and medical science to ultimately improve patient outcomes. His mandate will include scaling up Sanofi’s ongoing portfolio of digital initiatives by developing broad external partnerships, building out internal infrastructures, and exploring new business opportunities for the company in the digital space.

Thus, the role of a CDO is primarily focusing on both - developing a digital health strategy and improve internal capabilities, to effectively use new technologies and advanced analytics to deliver the deliverables, more effectively. As many would know, last year, both Pfizer and Merck announced appointments of CDOs for the first time in the company. In 2017, Novartis and GlaxoSmithKline (GSK) also created similar C-Suite positions.

Now, CDOs will need to prove their value:

Yes. That’s exactly what the Sanofi CDO said in the above Fierce Pharmaarticle – appeared on June 25, 2019. He was forthright in admitting, after a few years, pharma and biotech companies would be ‘kind of pressuring’ CDOs to ask, ‘Well, what have you really achieved? And show me the results. Have you made us more efficient? Have you transformed the way we work? Have you created new business? Have you really given us new tools, new technologies, new drugs which are digitally enhanced? And show me where they are.’

Hence, the pace of digital transformation of companies needs to be much faster now than ever before.

The current status of digitization in pharma:

Since, proof of the pudding is in the eating, let’s get a feel of the company employees in this area from their response to the query from the same ‘Harvey Nash/KPMG CIO Survey 2018.’:

‘Overall, how effective has your organization been in using digital technologies to advance its business strategy?’ 

Industry

Very effective          %

Moderately effective  %

Not/Slightly effective %
Pharma

17

37

36
All others

22

42

46

The above details may not reflect a great progress for the pharma industry in digital transformation. Nevertheless, this space doesn’t remain barren either, not any more. Some signs of progress – some green shoots, I reckon, are indeed discernable.

Conclusion:

As I see it, the need for digital transformation is an existential issue for the pharma industry. No one can afford to let this initiative die. In any case, the technological wave of such dimension, power and relevance for all, will always prevail – getting stronger – as the days pass by.

That said, there isn’t much doubt, either, that many drug companies are finding it challenging to keep pace with the rapid progress of technology, where obsolescence is also equally fast. Some are also facing tough barriers to scale up digital transformation across the organization. The rest seems to be not very sure how and where to start it from.

On the other hand, as I also wrote in my article in this blog on April 08, 2019, fueled by, among others, Internet of Things, the health care environment, including in India, is moving towards a ‘connected healthcare’ regime. This disruptive change will demand the best value offerings from each brand for better patient outcomes.

The good news is, at least, some green shoots of digital transformation in the pharma space are certainly coming up. But its pace needs to be considerably accelerated and now, creating an optimal groundswell – always being on the same page with customers – for path-breaking outcomes.

By: Tapan J. Ray   

Disclaimer: The views/opinions expressed in this article are entirely my own, written in my individual and personal capacity. I do not represent any other person or organization for this opinion.

Drug Quality Imbroglio And ‘Culture of Bending Rules’ in India

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“Bottle Of Lies Exposes The Dark Side Of The Generic-Drug Boom” – re-emphasized the book, released in May 2019.  This confirms, the raging debate on the questionable quality of many generic drugs manufactured in India and involving several top domestic pharma companies, is a never-ending one. Numerous articles also ascribe many different reasons to this saga, leaving an overall impression – as if, blindfolded persons are trying to describe an elephant, touching and feeling different parts of the animal’s body, each at a time.

Let me illustrate the point with the Bloomberg article of January 31, 2019. It reported, “Culture of ‘Bending Rules’ in India Challenges U.S. Drug Agency.” And further commented: ‘The FDA confronts creative improvisation in the world’s largest generic-drug exporter.’ Curiously, according to the above report it seems to be a general belief among many, even within India.

This article will take into account the above apprehension – specifically raised against Indian drug manufacturers of both branded and non-branded generics. Accordingly, my focus will be on just three points – as possible causative factors for this critical issue:

  • Is it an India specific concern – thus related to ‘Indian cultural mindset’? or it’s a global issue, involving both Indian multinational drug manufacturers.
  • Is it a systematic attempt to create a perception bias against low-cost generic drugs, worldwide?
  • Are generic drug makers resorting to such unacceptable shortcuts due to increasing margin pressure?

Having deliberated these points, I shall try to outline a set possible remedial measures to address this issue in a holistic way, ensuring a win-win outcome. Let me first explore, whether or not this issue is specific to India, involving Indian drug manufacturers.

Is the issue India specific?

Is the issue of questionable quality of generic drugs, irrespective of whether they carry a brand name or not restricted to the shores of India? One can find its answer in the same report, as quoted above. A yearlong investigation by Bloomberg News into the generic-drug industry concluded, ‘FDA inspections at factories from West Virginia to China have found reason to doubt the data meant to prove drugs are safe and effective.’

One possible reason for such perception could be, since India is predominantly a branded generic market, voices decrying ‘questionable’ safety and efficacy of cheaper non-branded generic drugs, are too loud. Nevertheless, amidst all this, who’s who of branded generic manufacturers continue getting caught on the wrong foot by overseas regulators in the quality quagmire. Ironically, multinationals are also included in it.

Multinationals are also included in such quality quagmire:

There are several examples of non-compliance to requisite drug quality standards by multinational drug companies. Let me illustrate the point with an example that involves a top global pharma player.

The March 04, 2019 ‘Warning Letter’ of US-FDA for the Irungattukottai (Tamil Nadu) plant of Pfizer in India, clearly said: “Your quality system does not adequately ensure the accuracy and integrity of data to support the safety, effectiveness, and quality of the drugs you manufacture.”

This is not a solitary example of Pfizer’s generic hospital injectables manufactured in this plant. According to a media report dated July 17, 2018, twice before US-FDA had cited manufacturing and testing issues in this facility, containing 11 observations of the regulator, such as, workers “manipulated test sample weights to obtain passing results” for both batches of raw materials and finished product. It is a different matter that the company, later on, decided to close this plant for commercial reasons. Be that as it may, negative perception of generic drug quality is indeed an issue that needs to be addressed without further delay, holistically.

Studies have captured negative perception of generic drugs:

That this is a perception, has been well – elucidated along with its implications, in several studies. A few of which are as below:

A BMJ article concluded: “A significant proportion of doctors, pharmacists and lay people hold negative perceptions of generic medicines. It is likely these attitudes present barriers to the wider use of generics.” It further added, “Negative perceptions of medicine quality along with other drivers contribute towards choosing more expensive medicines in the private sector.”

Endorsing this point, yet another BMJ article inferred: “Negative perceptions of generic medicines and preferential promotion of branded medicines over generics by pharmaceutical companies could influence prescriber behavior and affect trust in healthcare provided in public services. To succeed, access to medicine programs need to systematically invest in information on the quality of medicines and develop strategies to build trust in healthcare offered in government health services.”

Again, in a separate survey of over 2700 physicians on perceptions of generic drugs, more than 23 percent of respondents expressed negative perceptions about their efficacy and nearly 50 percent. reported negative perceptions of generic drug quality. In the same survey, patients also expressed concerns that the lower cost of generics is associated with reduced medication quality.

Although, the above survey was conducted in the United States, the current situation in India, I reckon, is no different, but with one caveat. Here, preferential promotion of branded generic medicines over cheaper non-branded equivalents, by the respective drug manufacturers, could significantly influence prescriber behavior. Therefore, the question that follows: Is this perception-creation based on facts?

Is the negative perception fact-based?

Although, even the US-FDA clearly states that: ‘A generic medicine works in the same way and provides the same clinical benefit as its brand-name version”, I did try to find some conclusive evidence depicting brand name drugs are superior to their cheaper generic equivalents. While doing literature searches, two types of results emerged – there are studies that do not find any significant difference between generic drugs and their branded equivalents. At the same time, a few other studies do suggest that there is a difference between these two, but admitting that these studies are not conclusive. Let me give below examples of each.

No quality difference found between generic drugs and the branded variants: 

I shall quote here three studies, out of which one is India specific. The analysis reported in the above BMJ article, found that ‘the generic and branded variants of the medicines tested were of comparable quality.’

Another study, published by PLOS Medicine on March 13, 2019 also said, “In this study of 8 drug products conducted using 2 large US commercial insurance databases, we observed that use of generics provided comparable clinical outcomes as the brand products.”

An India specific researchon the same also reported, most generic and branded drug users believed that their drugs were effective in controlling their ailments with no significant difference in reported adverse effects and drug adherence.

Slightly different results were also reported with generics, but not conclusive:

One such study questioned, whether generic drugs are truly equivalent to the brand-name versions.This article was published on January 2019 by Harvard Health Publishing with the title, “Do generic drugs compromise on quality?”

This article quoted a Canadian study, published in the October 2017 issue of ‘Circulation: Cardiovascular Quality and Outcomes’, which found that patients who took generic versions of three different blood pressure medications in the months after the generic drugs became available saw increased rates of drug-related side effects.

Was it due to a perception bias?

To ascertain whether or not there is a perception bias, let us look into the following details of the same study along with its conclusion.

In this study, the researchers ‘looked at the numbers of emergency room visits and hospitalizations for 136,177 individuals ages 66 and over (60% of them women) who used any of three blood pressure medications: losartan (U.S. brand name Cozaar), valsartan (Diovan), and candesartan (Atacand). The investigators examined data for the periods 24 months before and 12 months after the generic versions of these medications went on the market. And found that before the generic versions became available, about one in 10 people taking the blood pressure drugs had to go to the emergency room or be hospitalized each month. In the month after each of the generics went into use, the rates of these adverse events went up: 8% for losartan, almost 12% for valsartan, and 14% for candesartan.’ The study authors commented, this might suggest performance differences between the brand-name and generic drugs.

However, analyzing this study, the Harvard article suggested further probe on the question: Did it result from quality problems with the generic versions of these medications or were there other factors that occurred in this time frame?

Another research, aimed at finding, whether patients are more adherent to generic statins than brand-name statins (lovastatin, pravastatin, or simvastatin) and whether greater adherence improves health outcomes, also concluded, “An 8% reduction in the rate of the clinical outcome was observed among patients in the generic group versus those in the brand-name group.” This also wasn’t a conclusive one, either.

Nevertheless, the key point of a ‘perception bias’, is captured in a separate study, where the researchers did find higher rates of psychiatric hospitalization for patients taking generic and AG escitalopram and sertraline, compared with those who initiated the brand-name product. Importantly, they noted that these outcomes were likely due to either residual confounding or generic perception bias.

No quality difference also found between branded and non-branded generics in India:

There are studies, which captured no quality difference between branded generics and non-branded generics in the country. One such India specific study concluded: “Quality of branded-generics is same as for their branded version. The study highlights the need to modify the drug price policy, regulate the markups in the generic supply chain, conduct and widely publicize the quality testing of generics for awareness of all stakeholders.”

Thus, so far, we have seen in this article that concern on quality of generic drugs is neither India specific, nor is it related to ‘Indian cultural mindset.’ And this is, undoubtedly, a global issue, involving both Indian and multinational drug manufacturers. There are also ample evidences available that a systematic attempt is being made to create a perception bias against low-cost generic drugs, worldwide. Let us now look at the third possible causative factor, as I listed above.

Is it due to margin pressure on generic drugs?

The answer to this question was deliberated in an article titled, ‘Generic drug makers feel pinch as prices crumble,’ published in the Financial Times on August 17, 2017. Quoting a top global financial analyst, it reported – global generic drug industry, where Indian manufacturers are major players,has maintained roughly 30 per cent operating margins over a long period of time, with improvements year on year. But, since last few years, there has been a margin degradation, which may possibly further go down – even lower than what it is today.

The article further highlighted, a round of consolidation among their main customers in the US: the wholesalers, have escalated the problem.  Many of these groups have clubbed together to form “mega buyers”, known as general purchasing organizations, that can command large discounts. Moreover, for the US market, another area of ‘concern’ is that the US-FDA has identified boosting competition in the generics market as one of its main priorities. As this reform opens up, it could squeeze the generic drug margins further.

Many envisage that intense cost cutting measures, could have transgressed in the drug quality assurance area, aggravating this issue. Although, it needs to be verified through credible studies, curiously, some signs of improvement in this area has recently been reported.

That said, there appears to be a strange coincidence between recent reports on Indian drug makers showing improvement in USFDA inspection outcomes and attempts to increase generic drug companies and some of their top executives slapped with price-fixing lawsuits in the U.S.This needs to be studied further.

The way forward:

The negative perception of generic drugs, in general, and non-branded generic drugs, in particular, is most likely a well-crafted business issue, rather than a genuine patient safety concern. It calls for an immediate two-pronged approach:

  • Vigorous awareness and educational campaigns on safety and efficacy of generic drugs targeted to patients, medical and paramedical professionals.
  • New regulatory measures, especially the following five:

- No pricing pressure or price control in any form of generic drugs

- Abolish brand names for generic drugs

- Make generic prescription compulsory to boost intense competition and thereby     reducing the price.

- Restrict the number of ingredients in FDC not more than two or three

- Make Uniform Code of Pharmaceutical Marketing Practices (UCPMP) mandatory.

Conclusion:

Thus, the questionable quality of generic drugs is not an India specific concern and involves both Indian multinational drug manufacturers. This is also evident from the analysis, as quoted above, that underscores, ‘FDA inspections at factories from West Virginia to China have found reason to doubt the data meant to prove drugs are safe and effective.’ Many studies have revealed that there is a systematic attempt to create a perception bias against low-cost generic drugs, worldwide.

A sequence of remedial measures, as described above, also include fostering competition, instead of introducing government controls on prices of generic drugs with stringent regulatory oversight being in place.

Thus, the so called ‘belief’ that the ‘culture of bending Rules’ is culpable for dubious generic drug quality in India, is more akin to a strong perception, prevailing in India, rather than based on any scientific analysis related to this issue. This ought to change with a well-coordinated intervention – for patients’ health interest sake.

By: Tapan J. Ray  

Disclaimer: The views/opinions expressed in this article are entirely my own, written in my individual and personal capacity. I do not represent any other person or organization for this opinion.

Is Pharma Communication In Sync With Doctors’ Expectations?

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Not many pharma companies, especially in India, undertake any ongoing data-based analysis to gain insight on expectations and change in behavioral pattern of their customers, particularly doctors and patients. Many developments are taken as obvious, such as, when busy practitioners don’t want to give much time to a medical rep for brand detailing, if not any time, common spontaneous inference remains – ‘they are too busy.’ These responses are mostly without any data backup. Thus, meaningful efforts in finding ‘productive alternatives’ continue to remain elusive.

As making personal calls to some top medical practitioners becoming increasingly difficult, non-personal outreach for them tend to significantly go up. It often happens without any quantifiable assessment of how each of these targeted doctors is responding to even the non-personal outreach of the company.

That this is happening, was captured in a world-wide survey by ZS Associates in 2016. It highlighted: ‘The number of digital and non-personal contacts that the pharmaceutical industry now has with physicians exceeded its number of sales rep visits to doctor offices.’ It is worth repeating, this finding comes from a global survey.

Lack of insight in this area, could give rise to an avoidable disconnect between many pharma company’s core communication strategy, and what individual doctors would like to hear from them and in what way. Unless this issue is addressed sooner, it could be a strong invisible barrier to brands’ success, if not the image, too. Thus, in this article, I shall explore its implication, the key factors driving this trend, and most importantly, how to bridge this gap. Let me start with the well-established trend of increasing volume of non-personal contacts and hasten to add, by ‘non-personal’ I mean situations where a person is not physically present.

Increasing volume of non- personal outreach:  

In these days, personal interaction of medical reps with doctors, despite being traditionally important, is just one of the many channels for delivering requisite content to them. With increasing difficulty in getting top prescribers’ time, for effective brand detailing, many more non-personal channels are fast opening up.

Today, even in the Indian context, more than half of the total outreach volume of many drug companies, especially to such prescribers, are taking place through non-personal promotions. These include activities, such as:

  • Both, general and personalized e-mails
  • Mobile alerts to achieve various different objectives
  • E-detailing
  • Continuing Medical Education (CME)
  • Speaker program with associated arrangements and fees
  • Sponsoring medical events, seminars, symposia
  • Advertising in medical journals

Whereas, a little less than 50 percent of the total outreach by volume, still take place through in-person interactions with medical reps for brand detailing, as studies indicate. Interestingly, for known products, such contacts are often no more than just brand reminders.

The productivity of such calls needs to be measured and quantified, just as what is required for various non-personal channels, including digital – the contact volume of which is fast increasing for several companies. Curiously, despite this prevailing scenario and in some cases, a declining performance trend notwithstanding, higher promotional budgets continue to be available, based on hope and supported by optimistic forecasts.

The key reason attributed to this trend:

The article titled ‘What healthcare professionals want from pharma’, published in Pharma IQ on April 23, 2019 wrote about a key research finding on this subject. It emphasized, ‘only 46 percent of physicians worldwide are “accessible”- defined as meeting with a pharma sales rep in 70 percent of requests in the past year – a figure that has declined from 78 percent in 2008.’

On the same issue, the survey brought out two other important points:

  • 38 percent of physicians restricted MR access, and
  • 18 percent of physicians “severely’’ restricted MR access

The question that follows is, how much doctors’ time is taken by non-personal communication?

Doctors’ time taken by non-personal communication:

The above article also found: ‘These doctors estimate they receive more than 2,800 contacts from pharma reps each year via digital and non-personal marketing channel – contacts that consume an estimated 84 hours per year, or two full work weeks of their time.’ This level of “white noise” makes it imperative to rethink strategies for reaching prescribers, the article added.

What do doctors do with non-personal communication?

In this situation, understanding when doctors open doors to MRs, read promotional emails, commit to speaker events, and engage with other sales and marketing channels could be the difference between gaining market share by delivering a strong customer experience and failing to keep pace with a competitor. This was one of the key findings of ZS Associate’s 2017 Access Monitor study.

Thus, gaining insight on individual customer behavior for personalized customer engagement, would help create a cutting-edge competitive advantage for pharma players. With this acuity, astute pharma marketers would require prioritizing their focus on communication channels and platforms – alongside resource allocation for each.

Current resource allocation:

As reported in the above survey by ZS Associates, while marketing executives and doctors notice the increase in non-personal communications, pharma players, in general continue to allocate around 88 percent of their total sales and marketing budget to the sales force. This is despite non-personal communications – including digital, now comprising 53 percent of the total marketing outreach, as captured in this worldwide survey.

The survey findings do raise a point of caution as it says: ‘If pharma companies continue to increase investment in less expensive digital communications without considering customer preferences, physicians may feel overwhelmed and eventually ignore them.’ Thus, it will be important for drug companies understand doctors’ expectations in this area.

Pharma – doctor communication: Expectations and gaps: 

On the doctors’ front, there are two important developments that pharma marketers should take note of:

  • Core expectation of doctors is much clearer now:  As one of the above studies clearly indicate, the core expectation of all practicing doctors, from both personal and non-personal contacts with the drug companies, is to get the ‘news that they can use’, in their respective medical practices.
  • Availability of multiple expert sources/channels to fetch relevant medical information: The reality today is, medical representatives are no longer the only credible source for many busy practitioners to get useful medical information, not just for the molecule, but also for specific brands. ‘And with more choices, physicians increasingly prefer to learn about products on their own terms,’ as the above worldwide survey points out.

Hence, there exists a gap between how and what type of content busy practitioners expect from pharma companies and how and what the drug companies actually deliver to them. There isn’t an iota of doubt that this gap has to be bridged for making sales and marketing efforts more productive.

It demandsa deep insight into the way doctors gather medical information – based on real-time data analysis. This is critical, considering the role it plays for success in generating increased brand prescription support.

Acquiring insight into the way doctors gather medical information:

There are four key elements, I reckon, to acquiring insight into the way doctors gather medical information:

  • What each high-value medical practitioner considers as ‘the news that he/she can use’ in their practice, which would also help a company to generate increasing brand prescription support? Its answer should be the key driver for targeted content development.
  • How a doctor would prefer to receive it – as a personal or non-personal communication?
  • What would be each such doctor’s most preferred channel or platform to receive this message?
  • How to create an effective and measurable synergy between personal and non-personal communication for each important prescriber?

As too-much, too-frequent and too-many types of communication may often be counterproductive, delivering the right content, on the right platform, through the right channel for each top prescribers, would likely to pave the way for success in this effort.

Real-time monitoring to increase the strike rate is important:

This is relevant for both personal and non-personal communication and would include several areas, such as, after getting appointment of a top specialist, with great difficulty, what results follow after the interview concludes. Or after sending important and even personalized emails, how to monitor whether doctors are opening those, reading and acting upon, as intended.

This is no rocket science. There are ample mechanisms to make it happen. However, it is important to decide first, which of these means would suit a particular company the most, for effective implementation. That said, leveraging modern technology and constantly updating it, is the only way forward, for sure. While the task is difficult, but is certainly achievable – with the optimal mix of right resources and perseverance.

Conclusion:

When the expectation is, to build a strong pharma brand with a long-term success record, the only tool is effective communication of brand-value to target customers – in the right way, leading to tangible value creation for all. The source of communication being respective drug companies, one can be sure that it will be relayed to targeted receivers, such as doctors, patients and other stakeholders. However, none can be too sure whether the receiver will be willing to receive it the way it was planned by the source – and through the same channels.

Like many other industries, pharma customers are also becoming more selective in receiving, accepting and acting on medical communications, according to individual expectations and preferences. Several research studies have confirmed this emerging trend. Simultaneously, it is also getting revealed that most communication of a large number of drug companies are not quite in sync with doctors’ expectations. As a result, return per dollar/rupee spent on such communication is fast declining.

Thus, it’s time for a significant course correction – with a sense of urgency, as discussed above. No doubt, all pharma players have a strategy in place to make their brand communication effective. Nevertheless, what they should also focus on, is to align their communication with doctors’ expectations.

It is, therefore, imperative that pharma communication is made in sync with doctors’ expectations – not based on a couple of interviews with them, as it were, but by analyzing a massive pool of credible data, leveraging modern technology. Otherwise, high value prescribers may keep considering reps visit as ‘noise’ and remain indifferent to such outreach.

By: Tapan J. Ray     

Disclaimer: The views/opinions expressed in this article are entirely my own, written in my individual and personal capacity. I do not represent any other person or organization for this opinion.

‘Unbossing’ Pharma Culture For Millennials – A Sine Qua Non For Future Growth

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Wishing All My Readers A Very Happy, Healthy, Peaceful and Prosperous 2019

‘Unbossing’ an organizational culture is an interesting idea – more in the context of promoter driven Indian drug companies of all sizes and scale. The word – ‘unboss’ is associated with nonhierarchical and open leadership culture, aiming to achieve value-based higher goals, across the organization.Not many pharma companies are attempting to imbibe this culture, just yet, barring a very few.

‘The organizational culture is something that comes with the job’ – has been the general perception of all working for the company, including most CEOs, since long. Pharma industry being a more tradition bound, and hierarchic, such acceptance is more visible in drug companies. However, some industry majors have started challenging this status quo by asking: ‘Has our organizational culture, over a period of time, become too hierarchical and somewhat archaic? Are we still clinging on to the dated, and somewhat fossilized views and practices of the great predecessors, which were quite relevant in those days, but no longer now?’

In today’s changing scenario, the corporate culture of a pharma company should be able to unleash the full potential of its employees, who are an increasing number of vastly talented millennials, with generational differences in behavioral pattern.  They come with different values, mindset, expectations, aspirations, and feel comfortable working in a an ‘unbossy’ culture.

In this article, I shall explore how in the new millennium some pharma CEOs are going beyond mere tweaking, to usher in a substantive change in the sensitive area of organizational culture, keeping pace with time. This seemingly rare breed of head honchos clearly recognizes that developing a positive corporate or brand image, starts with the development of an enabling corporate culture.

Let me now start linking the organizational culture and business practices with brand or corporate image, through stakeholder loyalty, to corporate business excellence – all in the pharma context.

Intended corporate image starts from practices within the company: 

Instead of being always combative to prove how unreasonable are the stakeholder demands emanating from the complex business environment, drug companies need to accept some hard facts, and act accordingly. One such fact is – a positive corporate image or reputation based on an enabling corporate culture that is aligned with organization’s identity and good business practices, help earn stakeholder loyalty and enhance business performance.

This concept has passed the acid test in several research studies, over a period of time, e.g. the research paper on ‘Corporate Identity and Corporate Performance’, published in Scandinavian Journal of Business Research (Beta), (ISSN 1504-3134. Its findings may be summarized as: It is important for managers to understand that while building a strong reputation, the intended image projected by the company, needs to be consistent with the actual identity perceived inside the company, especially by the important internal stakeholder – the employees.

This is because, a positive corporate image reflects the way customers perceive a company’s product and service offerings to them and vice versa. This is not a recent phenomenon. It has been happening over decades. But only a few companies have taken it seriously to bring necessary changes within the organization, by remolding the organizational culture in sync with time. This point was also vindicated by the August 1998 article on ‘The Effect of Corporate Image in the Formation of Customer Loyalty’, published in the Journal of Service Research.

The findings of the above study from the goods and service sector are based on theory of consumer behavior, cognitive psychology, and social cognitive psychology. It clearly articulates that corporate image has a significant, but the indirect impact on customer loyalty. The authors claimed that customer loyalty is also driven by positive corporate image.

A positive corporate image originates from an enabling corporate culture:

That developing a positive corporate image or reputation starts with the development of an enabling corporate culture, is also corroborated by the above article featured in the Journal of Service Research. It highlights that a favorable corporate image is formed through a process of continuous updating without any behavioral time-lag within the organization.

Like many other industries, this holds good in the pharma sector, as well, to excel in business. Itis fundamental to ensure that the concerned pharma company always enjoys the confidence and loyalty of its internal customers – such as employees, along with the external customers that include employees, doctors, patients, Governments and the general public, among others.

This is equally important to make sure that the overall organizational culture does not get fossilized, at any period of time. It should always remain in conformance with the changing needs of time – new aspirations of the employees to unleash their full potential, for the best possible business outcomes through customer delight.

Some early indicators of an image problem:

In the pharma industry, some of the early signs of a company’s brand or corporate image problems get manifested by its indirect impact on customer/stakeholder or employee loyalty. The symptoms may encompass a whole gamut of areas, ranging from high employee turnover, through difficulty in getting brand prescription support from doctors and hospitals, into deteriorating relationship with the government, culminating to declining company share value with business growth stagnating or going south.

Positive or negative culture originates from the C-suites:

Many may be well-aware that both a positive or a negative corporate culture originates from the C-suites – mostly starting from the CEO office, including his direct reports, percolating down to even the first line managers, across various functions. A CEO should obviously carry the can and be held accountable, unless such incidences are aberrations or restricted in some functional areas. The reason being, an adverse company reputation or image, usually develops when the concerned CEO’s primary focus is on short-term results – not investing enough time on developing a positive and enabling organizational culture.

As the famous Warren Buffett once said:“It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you’ll do things differently.” This is important for all consider, especially in pharma, and in today’s scenario.

In the Indian context, one recent example, could be the ruckus created, especially in the United States and Europe, on the dubious quality and pricing of generic drugs. A bit older example is – how once top ranked Indian pharma corporate Ranbaxy almost vanished in the thin air, over good manufacturing practices and drug quality standards.

What culture would the millennials want with pharma companies?

The December 10, 2018 report on the Best Company Culture for 2018 of Comparably - a workplace culture and compensation monitoring site, highlight some important parameters on what type of organizational culture the millennials appreciate and look for. To illustrate this point, let draw the following examples from the report:

  • Open and collaborative company culture, where everyone is updated on the latest and greatest things happening to the company as a whole, across functions.
  • Autonomy with willingness to help, from all.
  • Everyone is trusted to do their job, no micromanaging.
  • Anyone can ask questions and provide input that will genuinely be heard.
  • Hanging out with each other.

These are just a few examples to get a flavor of the change. It is also quite likely that many senior pharma managers may say: ‘Oh! We are already doing these and much more.’ It’s a different matter, though, that millennials of the same company may not be on the same page with these managers.

Unbossing pharma culture – the ball has started rolling:

At the Forbes Healthcare Summit 2018, held in New York City from November 28 -29, 2018, the global CEO of Novartis - Vas Narasimhan, called for a cultural shift to cater to the millennial generation’s needs, expectations and aspirations at the work place. He said: “The goal we set out to do is create an ‘unboss’ culture.” Half of Novartis current 120,000 employee strength being millennials. This move is directed to enhance the company’s appeal to them. A part of ‘unbossing’ the company culture in Novartis would be relaxing the current rules, by allowing employees to wear jeans to work.

Expanding the point while talking to Business Insider, Vas Narasimhan said: “For many people, they love the idea of the culture change, everybody then wants to know why can’t it happen right away. So, then you have to explain to people, this takes time, leadership, it takes a lot of changes in how we work. But I think there’s been a lot of acceptance of the culture change, but now the hard work has begun.” 

Some key traits of ‘unboss’ culture:

The article titled, ‘5 signs that you might be an ‘unboss,’ appeared in YOURSTORY on April 08, 2017 explains: The word ‘Boss’ originates from the Dutch word ‘Baas’, meaning ‘Master’. Where there is a master, there are slaves, and that’s not a good thing. More often than not, this word leaves a bad taste in the mouth, and rightly so. Thus, in a ‘unboss’ company culture, the topmost quality that the person in-charge, irrespective of organizational functions should possess, is being ‘unbossy’.

Some common leadership traits that define a ‘unboss’ culture, as I sense from the above article, are as follows:

  • Giving a great importance to sharing of knowledge.
  • Quickly identifying the ability in others and bring out the best in each team member.
  • Never feeling insecure and passing on credit where it’s due and not coveting praise that’s rightfully others.
  • Being flexible enough and possessing maturity to also do the legwork when required.
  • Treating everyone the same, without playing favorites, ever.
  • Creating an environment of learning and encouraging the team to experiment.
  • Setting benchmarks for each individual member to assess their own career growth.

In the pharma industry, not many leaders, I reckon, possess these qualities. Some drug companies, both local and global, may pontificate about practicing these qualities, but the majority of employees may not experience most of these in the real work situation.

Conclusion:

In most pharma companies, including India, much of the workforce, in addition to field staff, constitutes of millennials, which will continue to show an ascending trend. Thus, it is critical to align the company culture to attract and retain talents from the new generation A large number of companies still don’t consider this issue as a priority task for the corporation. The example set by the Novartis CEO, as quoted above is refreshing, in that sense.

Moreover, a number of research studies have established that organizational culture helps form the context within which corporate identity and corporate image are established. There can’t be a better time for a relook at the respective organizational culture, as the image of pharma industry has still not found its bottom.

A positive image, irrespective of whether it is a brand or a company, based on a robust organization culture, establishes a stout emotional connect with stakeholders. This is central for a long-term business success, and vice versa. It isn’t an easy task for any pharma player, especially for the promoter driven Indian companies of all sizes and scale, but not impossible, either.

Be that at it may, with the pharma business environment facing increasingly strong headwind, ‘unbossing’ pharma culture for millennials, I reckon, is sine qua non for long-term success – from the corporate perspective.

By: Tapan J. Ray    

Disclaimer: The views/opinions expressed in this article are entirely my own, written in my individual and personal capacity. I do not represent any other person or organization for this opinion.

Trees Die From The Top: Apt For Pharma Leadership Too?

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The Management Guru of all-time – Peter F. Drucker once said: “The spirit of an organization is created from the top… If an organization is great in spirit, it is because the spirit of its top people is great.” As “Trees die from the top”, no one should ever become a strategist unless he or she is willing to have his or her character serve as a model for subordinates – Drucker emphasized.

Decades after this assertion from Drucker, meant for management practitioners, it is discernible even today how irrefutable these axioms are.  In the contemporary times, as well, particularly when reality bites a company hard, being caught on the wrong side of ‘generally acceptable’ ethics, value and compliance standards.

While zeroing in to pharma, soundbites usually generated at that time, especially from the top echelon of the management, seem to hint that employees down the rung are responsible for such misdeeds, besides, of course, the legacy factor.

At this moment of truth, it is also not unusual for them to romancing the utopia, as it were. Senior management comes out with several ideas, which are squeaky clean in terms of optics. Some of them also talk about introducing behavior metric on ethics and values in employee performance appraisal before releasing any performance related pay out. In this article, I shall focus on this leadership issue in view of some latest developments in this area.

The latest developments:  

Let me now come straight to the latest developments in this area, as I see around.

“Novartis links bonuses to ethics in bid to rebuild reputation” – was a headline of Reuters on September 18, 2018. It reported: “Swiss drug maker Novartis has revealed its employees only get a bonus if they meet or exceed expectations for ethical behavior as it seeks to address past shortcomings that have damaged its reputation.”

Some interesting points stand out from this report on the ownership of such alleged malpractices. These reconfirm that the reasons for the same, including the repeated allegations of such nature, are being passed on to others by the top management. For example:

  • To past practices or the legacy factor, even if the current CEO has been a part of that corporate environment, since long.
  • To employees responsible down the line, and a new system is being adopted to address the issue.

In this case, as Reuters reports: “Chief Executive Vas Narasimhan has made strengthening the Swiss drug maker’s ethics culture a priority after costly bribery scandals or legal settlements in South Korea, China and the United States.”

Interestingly, as reported by the media, “the company was also this year embroiled in a political controversy over payments it made to U.S. President Donald Trump’s ex-attorney.”  Previously, even in the clinical trial area, Japanese authorities, reportedly “uncovered serious misconduct during a trial of its leukemia drug, Tasigna.”

As I said above, in response to such incidents, the General Counsel of Novartis, reportedly expressed: “This allows us to look at the behavior metric before any money leaves Novartis and catch potential misconduct before there is any risk to our reputation.” The official further added, “You can expect us to continue focusing on resolving the legacy issues that we read about in the press, ensuring we address any remaining underlying behaviors.”

Such steps not taken for the first time by a pharma company: 

EvenGlaxoSmithKline tried something akin in the past.

“GSK scraps sales rep targets after scandal,” was the headline of December 17, 2013 edition of the Financial Times. It reported: “GlaxoSmithKline is to scrap individual sales targets for its commercial staff as it seeks to repair its image and reform working practices in the wake of allegations in China that its staff paid officials up to $500m in bribes. The move comes amid concerns over aggressive marketing across the pharmaceutical industry and follows a series of damaging regulatory probes leading to a record $ 3bn fine in the US last year.”

However, later on GlaxoSmithKline, reportedly “altered the plan when its sales began to suffer in the world’s largest market.”

Where is the real issue lying?

As“PwC‘s 21st CEO Survey: Preparing for disruption” found, 71 percent of CEOs surveyed said that their organizations face greater pressure to deliver business results in less time.

There isn’t an iota of doubt, I reckon, that pharma CEOs are under constant performance pressure from the investors and other stakeholders to deliver expected financial results. This makes them keep their eyes primarily glued on to the grindstone for churning out expected profits from the business. This also means that they expect management efforts to be generally directed to deliver ‘values’ at the least possible cost.

On the other hand, the same PwC survey findings reiterated that with rising drug costs, the demand for the drug companies to demonstrate the treatment efficacy, is increasing by manifold. Thus, “to remain competitive, Big Pharma will have to do things faster (like drug development) and cheaper for the patient, add more value for the same money, and become more proactive partners with patients and doctors in both wellness and cure” - one of the findings of this study emphasized.

It is quite common for most large to medium sized pharma companies to have in place a well-articulated organizational ‘ethics, compliance and values’, together with requisite checks and balances in the form of rigorous rules, regulations and other guidelines.

Most often these adorn the respective websites too, for public knowledge. The question, therefore, surfaces what could then possibly go wrong in the organization and where exactly does the real issue lie, while effectively managing the organizational growth?

“Non-compliance – A serious challenge to growth”: 

Serious malpractices and their related fallout in pharma business – not just in marketing, but clinical trials, manufacturing, quality assurance and other areas, are not usually due to any lack of requisite processes or expertise. These are generally serious consequences of non-compliance of various organizational norms. At times, with the indirect support of senior management, or senior management keeps their eyes closed on such non-compliances, under demanding obligation for delivering expected financial results and business growth.

Tweaking areas, such as employee performance-incentive norms, as happened in the cases of GSK or Novartis, can’t fetch a long-lasting solution in such a situation, as I see it. Nonetheless, the survey report findings of Deloitte, titled “Non-compliance – A serious challenge to growth,” are interesting to get a sense of the reasons behind the same.

Key reasons for non-compliance: 

The Deloitte report identifies some key contributors to malpractices and non-compliance in the pharma sector, indicating the percentage of survey respondents involved against each, as follows:

  • Lack of an efficient internal control/ compliance system:  61 percent
  • Weak regulatory enforcement / action taken against fraudsters:  55 percent
  • Inadequate utilization of technology tools available to identify red flags:  45 percent
  • Lack of a zero-tolerance approach towards malpractice and regulatory non-compliance:  45 percent
  • Inadequate due diligence on employees/ third party associates:  36 percent
  • Unrealistic targets/goals linked to monetary compensations:  33 percent
  • Senior management override of controls:  24 percent
  • Inadequate oversight by the Board/ Audit Committee:  06 percent

As I mentioned before, most key contributors to malpractice and non-compliance point towards a lack of senior management efficiency in internal controls, systems, and “inadequate utilization of technology tools available to identify red flags.” Curiously, no one mentions about the requirements for any fresh measures or systems to curb such incidents, in the future.

Just tweaking the present system may not help:

Just for changing the optics, tweaking the present system often doesn’t help. Many similar instances in the past, such as GSK’s example, as cited above, would vindicate this point. In the GSK case, at least, it’s the then CEO – Sir Andrew Witty expectedly realized that ‘unrealistic targets/goals linked to monetary compensations’ lead to such corruptions.

But total delinking of the core responsibility of any sales staff, namely ‘generation of top-level numbers both in volume and value’, with performance incentive, could throw some future challenges. Similar reason, presumably prompted GSK altering the plan when its sales began to suffer, at a later date.

Similarly, Novartis is, reportedly introducing a new behavioral metric as qualifying criteria for its employees to earn bonuses or incentives. Intriguingly, despite the existence of rigorous rules, regulations, guidelines and associated punitive provisions for not complying with the company ethics and values for a long-time, malpractices are still being reported today.

Thus, I wonder, how will an additional system of similar nature prevent recurrence of such incidents in the future? Anyway, only the future will tell whether a tweaking of this nature in the present system that did not work in the past, will work in this particular case effectively.

Conclusion:

The reasons for less than adequate internal controls of an organization, I reckon, fall squarely on the senior management, especially for repeat offences. Passing the blame to employees down the line or tweaking their performance appraisal system by introducing a ‘behavioral metric’, is likely to be short term, finger-pointing on the legacy factor notwithstanding.

On the contrary, these may likely to be construed as manifestations of knee-jerk reactions, and not so well-thought-out strategic measures. Neither do such repeated malpractices demonstrate a great spirit of the organization, nor do these evince astute leadership qualities of its top management.

Coming back to where I started from, quoting what the management guru Peter Drucker once said: “The spirit of an organization is created from the top… If an organization is great in spirit, it is because the spirit of its top people is great.” He also reiterated, no one should ever become a strategist unless he or she is willing to have his or her character serve as a model for subordinates This is certainly not the situation for those pharma players mired with alleged malpractices, repeatedly – not just in marketing, but in other operational areas too.

As the good old saying goes: “trees die from the top,” so is also an organization when its senior management lacks a moral compass on ethics, compliance and values. Considering what is being often reported on business malpractices within the drug industry, isn’t the saying equally apt for pharma leadership, as well?

By: Tapan J. Ray   

Disclaimer: The views/opinions expressed in this article are entirely my own, written in my individual and personal capacity. I do not represent any other person or organization for this opinion.

‘Design Thinking’: Translating Struggles into Positive Outcomes in Pharma

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Problems of various nature will keep coming on business, as long as long as one remains in the business. It doesn’t spare anyone in the organization – from the very top to right up to the very bottom. All is susceptible to problems. Thus, underlying part of all jobs, is one’s ability to solve problems – decisively, as these keep coming.

At the corporate level, problems could be either self-created. For example, when each functional area operates in a silo, at times restricting overall corporate business growth. This may happen not only due to lack of operational synergy, but also for setting incompatible goals. Problems may even arise out of environmental hindrances, or for smarter competitive strategies. Both would adversely impact the company performance, including the possibility of damage to reputation, and at times, even survival of the business. At the individual level, problems at the work place, may affect one’s personal life, work life, career path, key performance areas or even income, among many others.

Looking at the positive aspect of it, as the saying goes, each problem comes as a hidden opportunity, which needs to be harvested. Importantly, in a work environment, the degree of career success of an individual is often associated with the person’s problem-solving ability – in innovative ways. Conversely, one pays a commensurate price for not being able to do so.

In any case, ‘problem solving’ skill is important for all, as much as it is in any business, irrespective of whether the environment around is digital or one involving with lesser of computer technology. This skill is highly necessary for business success. Therefore, the essence of garnering differential competitive edges in any business remains deeply embedded in the quality of problem-solving ability of its people, across various organization functions.

In a broader sense, any innovation – including drug innovation that falls at the high end of the pharmaceutical value chain, is also basically a problem-solving initiative. This encompasses even some of the serendipitous discoveries, such as Viagra for erectile dysfunction. In this article, I shall try to explore the wider applications of a robust process in problem solving – the application of ‘Design Thinking’ in pharma industry.

‘Design Thinking’:

The roots of ‘Design Thinking’ hail back to the mid-1950s with the introduction of the subject, Design Science, at the Massachusetts Institute of Technology (MIT), says US Collective in a paper titled, “What is Design Thinking and how can businesses benefit from it?”

According to MIT Sloan School of Management: “Design thinking is an innovative problem-solving process rooted in a set of skills.”This process has been successfully applied to developing new products and services. It begins with understanding the unmet needs of customers. And from that insight emerges a process for innovation, encompassing concept development, applied creativity, prototyping, and experimentation. With the application of ‘design thinking’ in business, the success rate for any innovation has been seen to improve substantially.

In its analysis, MIT Sloan found that design-driven companies such as Apple, Coca-Cola, IBM, Nike, Procter & Gamble, and Whirlpool have outperformed the S&P 500 over the past 10 years by an accumulated 211 percent in what’s called the Design Value Index—a portfolio of 16 publicly traded companies that integrate design thinking into corporate strategy. According to a 2016 report from the Design Management Institute, this marks the third consecutive year the index has shown an excess of 200% over the S&P 500.

‘Design Thinking’ in pharma:

As we have seen, ‘design thinking’ approach is a human-centric way of problem-solving, understanding the user needs. In the pharma space, it’s problem solving to address its stakeholders’, including patients’ needs and requirements related to health. Thus, for innovative drug marketing, as well, ‘design thinking’ could play a very useful role to make all organizational activities patient-centric – for greater all-round corporate success.

In this context, an article on ‘design thinking’, appeared in the Financial Times on October 12, 2017 reported: “Development of a drug can take around 15 years. But by using the design-thinking process, you could make clinical trials shorter by collecting more real-time data. The manufacturing process and design of packaging could be improved by a better understanding of how drugs are being used. And costs could be reduced, enabling the more expensive drugs to be made more available.”

Four steps of ‘Design Thinking’:

MIT Sloan outlined 4 simple steps in ‘design thinking’ process, which I am summarizing in pharma perspective, as follows:

1.Understand the problem – the source could be both internal or external:

As MIT Sloan professor Steve Eppinger said: “Most people don’t make much of an effort to explore the problem space before exploring the solution space.”

This often happens in pharma too. It’s not very uncommon that looking at just manifestations of problems, a company will look for a solution – quite akin to providing symptomatic relief in the treatment of a disease.

Eppinger further articulated, the mistake that problem solvers usually make ‘is to try and empathize, connecting the stated problem only to their own experiences.’ This falsely leads to the belief that problem solvers completely understand the situation. But the actual problem is always much broader, more nuanced, or quite different from what people originally assume, he underscored.

2. Workout possible solutions – involving those who matter 

3. Prototype these, test and further refine

4. Implement the best possible solution

Professor Eppinger further said, people at work can use ‘design thinking’ not only to design a new product or service, but anytime they’ve got a challenge – a problem to solve. Applying ‘design thinking’ techniques to business problems, pharma companies can offer greater value to customers, and stay relevant.

Pharma companies imbibing ‘design thinking’:

There are examples that some pharma companies are seriously nurturing the concept of ‘design thinking.’ One such an instance was captured in an interview, published in pharmaphorum on May 3, 2018. During this interaction, the head of innovationof the global pharma major – UCB,articulated how his company is creating a culture based around ‘design thinking’, right across the organization.

Acknowledging that pharma is generally accused of being distant from patients that it intends to serve, he explained how UCB is aiming to address this issue byfostering a new patient-centric organizational culture through ‘Design thinking.’

Detailed analysis of the needs of the target audience following this process, and the use of insights thus gained, will also encourage researchers to create appropriate new products. The core idea is to create products that are led by the needs of customers – something that is so critical for pharma companies, particularly in increasingly competitive commercial landscape.  He advised people to be persistent and professional, as they measure and see the results, which has potential to create a snowball effect in the organization.

Conclusion:

Several studies indicate that the companies with a long track record of delivering stakeholder value, are more customer focused. Apparently, pharma players are progressively experiencing that for sustainable business excellence, their customers – including patients, should form the nucleus of corporate business strategy. The same concept should, thereafter, cascade down while developing the game plan for each functional area. There doesn’t seem to be any other viable alternative for the same, right now.

With upswing volatility in the business environment, ‘design thinking’ merits to become a relentless process, particularly for creating assertive employee-mindset to accept the challenge of perpetual change, anytime. Accordingly, a well-structured and equally well-integrated, ongoing feedback data generation mechanism, together with sophisticated analytical tools, supported by other requisite resources, should be put in place.

Ample evidences demonstrate that ‘design thinking’ helps business to stay always in sync with the market, customers and also its employees, for performance excellence. It can provide creative inputs for developing game changing business strategies, meeting customers’ new expectations, or even to reformulate those, which are yielding declining or sub-par outputs. Consequently, it becomes incumbent upon top decision makers to integrate this process into the pharma organizational culture.

Thus, I believe, ‘design thinking’ is an effective way of creative problem solving in a number of situations, having its source both within and outside the organization. It carries a promise of improved all-round corporate achievement – often translatiaing struggles into positive outcomes in the pharma business.

By: Tapan J. Ray   

Disclaimer: The views/opinions expressed in this article are entirely my own, written in my individual and personal capacity. I do not represent any other person or organization for this opinion.