A non-executive’s plan for initiating organizational change

As a non-executive you probably don’t have either the position power or authority to make the organizational changes we are talking about to better align your pharmaceutical company with the evolving new healthcare market.  To increase your probability for success and to help reduce your personal risk of suggesting organizational change here are some steps to consider.

WARNING!  This is a lot of work but is really important.

Most people who recognize a need for change feel they have done their part by complaining about the situation to their manager, telling their peers about the problem, or bringing it up in a meeting.   Managers quickly and easily dismiss complaining and see continuously talking about a problem and the meeting “zinger” as disruptive and non-constructive.  It is hard to be taken seriously without well thought out concepts that have reasonable plans for making the changes.  So, here are some things to consider:

First, do your homework.  If you are going to recommend a change or different course of action you need to have the facts and have your recommended course of action well thought out.  The more detail you think through, the more likely you are to understand how and why your idea might be dismissed.  Although not all good ideas are accepted, they are usually defensible and harder to dismiss if they are well thought out. These are not all inclusive but should get you thinking.

  • Why the need for change? What are the benefits?
  • What specific actions are you recommending?
  • How much will it cost? Are there collateral (indirect) costs?
  • Who does this change affect? Who might not like this change?
  • What outcomes would you expect?
  • What are the downsides for making the change? How can you avoid or mitigate them?
  • How would you measure progress?
  • Based on your homework and assessment, is it still worth doing?

Second. Are there colleagues, peers or better yet a manger or two you can bounce ideas and thinking off without making it look like you are actually ready to implement?  You know sounding boards and the trial balloons.  If you can, begin to enlist their support, even if they are uncomfortable to be vocal at first. Be sure to protect their confidence by not disclosing their thinking to others without their permission.

Third. Develop an implementation plan (campaign) and break it down into small steps.  It may take longer than you might like to get to your change but it will be less threatening to your management and you can build credibility with small accomplishments that can be use as platforms for the next steps. If you meet resistance, try to figure out why and find ways to address the concerns.  If it still makes sense and is worth pursuing, don’t give up to early because you don’t get a warm reception on your first tries in your first steps.

Fourth. Find outside help in a consultant with expertise in the area you are working on or a supplier you currently work with who understands what you are trying to accomplish.  You can enlist their help with presentations, strategy session, and take advantage of their expertise by engaging them in discussions about what you are trying to do.  Just like kids seem to listen to everybody except the own parents, sometimes an outside confirming voice can help reinforce your message, increase reception of the concept, and unblock resistance.

Fifth.  Be patient and don’t expect too much to happen too fast, especially if you are looking to make significant, big changes that require a lot of money or that affect a lot of people.


The challenge for non-executives who see a need for change at Pharmaceutical Companies

One of the most frustrating job situations is when you know the organization is doing something wrong (perhaps even illegal) or you know there is a better way of doing something.  You feel there is a need for change but your management (and company leadership) seems indifferent, is on a completely different page (they really believe it is okay), or is stuck in a safe traditional way of doing things.

Why is it so difficult to stop wrong doing or make a change at a big pharmaceutical company? I’m sure there are company specific reasons but here are some that are likely at many companies.

First , organizations have safeguards built in so that everybody who happens to have an idea doesn’t just run off and do their own thing or execute something that may or may not be in the organization’s best interest.   Process, however, is usually not the reason employees don’t or can’t affect change as much as they might.

Probably the single biggest reason is risk.  The risk is high for low level employees and even senior management, at times.  First your reputation is at stake. You risk being ridiculed by your manager, being chastised and ostracized by your peers, maybe even humiliated in front of your peers.  You risk job security, career growth, and your compensation might suffer as a result of identifying a problem or trying to encourage changing to a better way of doing things.

If the risks are not real enough, the fear that the risks can harbor are often enough to keep employees from stepping up to identify problems and make suggestions for change. If you think I am being to negative and unrealistic, just do a review of some of the litigation cases against pharmaceutical companies and tell me how the whistleblower or anybody else, besides executives, might have been able to intervene or affect change without these risks.  In many cases they and others  did try to intervene and make a change, but obviously they often did not succeed until they went to court.

Why is this important in the context of healthcare reform and the need for change in the pharmaceutical industry? Because, change and knowing how and what to change often lies within the organization, and not necessarily at the top of the organization.

The solution may sound idealistic but in reality the only way to resolve this is for management to make sure you have competent people with integrity in your organization.  This increases the probability that the problems identified are real and the suggestions for change are worth consideration.  These employees need a management culture that encourages open communication that minimizes personal risk when identifying problems and suggesting change.

Employees in this type environment have a higher probability of affecting change and the organization can better leverages the talent they have working for them.    We’ll discuss how employees can be more effective at pointing out problems and affecting change in the next post.


Strong science makes for more credible marketing and sales

We live in the reality of a world where skillful chemistry and quick structural modifications can develop new but similar drugs.  Some of these new products may provide benefits such as avoiding  side effects or reduced dosing schedules.  But for many, these products create one of the biggest challenges facing pharmaceutical marketing today.  Being able to develop and establish meaningful product differentiation.  In most cases, the lack of sufficient clinical data to support the desired claims makes this near impossible  within the confines of regulatory constraints.  Without clear, science supported product differentiation; marketers are left to creativity and expensive high visibility market presence to create a competitive advantage.  Sometimes this involves stretching the data and claims as far as you can get away with from a regulatory and legal perspective. Sometimes this means outspending your competition to make sure your product gets sufficient market exposure  to create demand.  Sometimes it means competing on price.

There are two solutions to this dilemma.  The first is for R & D to deliver truly innovative new products with the clinical data to substantiate the novelty and value. The second is spending more money doing clinical studies upfront on products that are suspected of having some element of differentiation. Design trials that can support the claims you want to make and make certain the studies and results have the scientific rigor to pass regulatory muster and are sufficiently compelling to make it easy for your marketing staff to communicate the differentiation without exaggeration.

I realize neither of these solutions helps those with difficult to differentiate products today.  Unfortunately, you are left with traditional tactics for trying to create that competitive advantage.  This situation does, however, point out the importance of experienced marketing input to R & D…early.  As the market expectations increase for differentiation (remember “comparative effectiveness”?), building a strong scientific foundation around the product claims you want to make will become essential for commercial success.  The days of clever marketing and sales to “push” products into the market are limited.   Spend the money upfront on more and better clinical studies and increase the credibility of your marketing and sales.


Pharmaceutical Industry’s Missed R & D Opportunities

The answer to sustainable growth in the pharmaceutical industry is a continuous flow of innovative new products the market is willing to buy at the prices that make it worth doing.  Back in the 1990’s and early 2000’s, when industry R & D seemed to be able to produce whatever products were needed, it was nearly impossible for struggling small biotech companies to even get an audience with Big Pharma R & D to discuss their innovative new technologies.  The “not invented here” mentality that kept potential new treatments from Pharma R & D I believe has now come back to haunt the industry. Given the 10-15 year development time for new products, the math would suggest the 1990’s would have been a good time for risk taking exploration of innovative new technologies and aggressive licensing.  While some might suggest biotechs wanted to much for their technologies, I would argue, most never got to that stage of discussion.

Unfortunately, we will never know how many truly innovative products met their premature death at biotech companies that could not find sufficient funding to continue development or who were unwilling to give away their companies to Venture Capitalists.  Yes, the industry figured this out to some extent recently, but too late. And even now the rigors of a Big Pharma due diligence reviews are painful and beyond the resource capabilities of most small companies.  How many technologies get written off because the company doesn’t know how to present the technology to Big Pharma or because they didn’t do the studies a Big Pharma would have?

Pharma business development and R & D need to look at technologies not with a “quick to market” mentality but how they might be able to exploit technologies, perhaps even beyond where the biotech has taken the research.  Biotechs need to also be realistic about financial expectations and the value added by Pharma R & D and commercialization capabilities.   Unfortunately, the 1990’s may have been a missed opportunity but I also fear a lot of valuable technologies and innovative product opportunities may have died during the financial crisis of 2008-2009, due to Big Pharma evaluation criteria and expectations.


Pharmaceutical Company Leaders and the Evolving New Healthcare Market

Will healthcare reform and the evolving new market change what pharmaceutical companies need from their leaders?  Will companies require the same or different skills than leaders of the past?

Over the past 40 years or so the industry has evolved from an early focus on research to an intensifying focus on commercialization to today with a seemingly dysfunctional scramble for a new business model for the future.  Do the skills and expertise for leadership depend on the context and focus of the company strategy?

OK. Have I got you thinking?

I hope pharmaceutical company Boards of Directors and executives are thinking about this.  I suspect, the leadership potential for many executive who have advanced as far as they have might need to be reevaluated in the context of the evolving new healthcare market and changing company strategies or focus.

Basic management and leadership skills are essential for running these complex organizations in the increasingly complex evolving new healthcare market. That won’t change and the stronger those skills, the better.  But what about the expertise of executives who are currently in development succession plans? It could make a difference.

At some point in their career, most executives applied their expertise to be identified as a potential leader.  They won a significant legal case, launched a blockbuster product, had the highest regional sales, had the most productive operations, or something.  Those moments of accomplishment brought with it recognition but also opportunities for advancement and training.  For those fortunate enough, organizational development or luck provided the opportunity to developed broad functional areas of expertise across the organization.

But, what about those who have more narrowly defined areas of expertise?  Keep in mind that merely having a department report to you does not mean you have developed expertise in that function.

The strategic platform a company chooses to pursue could require expertise that some previously successful executives do not possess.  For example, commercially focused organizations with executives that have strong research based expertise.  Or, more likely today, executives with strong commercial or operational expertise in organizations that are now looking to rebuild and bolster pipelines with innovative new products which will require an in depth understanding of sophisticated the science and technology to make good decisions about resource allocation and development.

In most cases this mismatch of expertise will not be a liability given strong management and leadership skills.  Aligning expertise at the top with the strategic platform of the company could however represent a significant opportunity to optimize corporate performance.  Aligned expertise provides and important base for organizational credibility, insightful management oversight, and knowledgeable performance management with fair assessments and accountability. When you know what you are talking about and “have been there”, you have a much better idea about what to reasonably expect, what to inspect, and more importantly, how to help.


Electronic information implications for pharmaceutical companies

Drug information sharing in the past provided an important role for sales reps, Medical Science Liaisons, and even journal advertising.  Even back in the mid-1980’s I remember doing online research (think dumb terminal with phone couplers) for infectious disease experts in their offices.  For most, their only alternative to get this information was to sit with the Med School reference librarian and try to figure out how to get what the physician needed from the National Library of Medicine database.  Searching was actually a skill back then.  This was probably as cutting edge at the time as you could get for information retrieval and sharing.

With the advent of the internet, robust search engines, and the pervasive availability of electronic retrieval devices, calling on physicians to do literature searches became limited in value.  Now these experts can do their own searches from their own computers. What’s the point?

For the industry to add value through information sharing, it is going to take more than sending a sales rep or MSL to see a physician with basic company product information.  Most companies realize this and have moved to take advantage of the internet, e-learning, e-prescribing, and television. In time however, this will also get old, build skepticism, and diminish in value as marketers abuse these tools, trying to cleverly hype  their product advantages, and overcommercialize their products with bold intrusive branding.

So what’s the solution?  Better science.  FDA approved label claims for what you want to say about your product and strong definitive clinical data to support the claims.  Peer reviewed presentations and publications with full disclosure and fair balance of data to support the benefits and risks. If you want to claim superiority, do the studies, get the claims, or at the very least, have credible data from reproducible controlled trials.

Then use whatever electronic communications you chose to disseminate your data.   This is not to say you don’t need marketing or sales to promote your product.  Professional, data supported claims merely provide a more credible base for promotion.  No hype required. You could even have life science trained medical personnel who can discuss in detail, on a peer basis, the nuances of the data and what they mean. If these people can not stand in front of a medical conference and defend their presentations, comments, or the implications of the data being presented, they should not be presenting in a one-on-one setting either.  A very tough standard, perhaps.  But, a lot more credible than the industry has provided healthcare providers in the past.


Pharmaceutical company diagnostic development expertise

During the discovery process, Pharma researchers explore molecular systems searching for and testing biological pathways and targets they might be able to turn on or off in an effort to mitigate disease symptoms or to avoid side effects and adverse reactions.  Drug discovery is becoming increasingly challenging, especially to find those elusive innovative new products the market is demanding.  To find those truly unique compounds, Pharma will have to delve even deeper into the biology and pathophysiology of disease.  This is fertile ground for Pharma companies to exploit by developing complimentary diagnostics to go along with their new treatments.  Developing these diagnostics could become a significant competitive advantage, a market embraced marketing tool, and may eventually be a necessity for commercial success in the not too distant future.

Here are some of the reasons why and how a Pharma company might consider developing diagnostics to go along with their new treatments:

The healthcare provider need for better diagnostics:

  1. To more definitively identify diseases and their underlying cause
  2. Disease identification rather than indirect diagnosis from lab data interpretation
  3. Rapid, easy, “bedside” or office practice testing rather than time consuming, remote laboratory testing
  4. To identify high risk patients who should be considered for preventive treatment

The market needs for better diagnostics

  1. Desire to know which patients are more likely to respond to which treatments.
  2. Desire to know which patients are more likely to experience side effects or adverse reactions
  3. Tests to determine whether or not a treatment is actually working (having the desired affect)
  4. Better treatment specific diagnostics could lead to less wasteful prescribing and avoid costly hospitalizations related to adverse effects

Regulatory considerations

  1. Treatment specific diagnostics may provide a quicker path to proof of concept
  2. Treatment specific diagnostics may be able to better establish drug superiority to alternative therapeutic options
  3. May provide  stronger, more definitive  clinical support for efficacy and safety

Pharma companies looking to take advantage of this opportunity will need to:

  1. Increase their research expertise to include diagnostics development expertise
  2. Build corporate expectation that new treatment discoveries will come with a need for diagnostics to support the product
  3. Expand discovery research to include looking for diagnostic possibilities
  4. Include diagnostic companies, research tools and services companies, and other general life science companies in their business development licensing and partnering plans.

Diagnostics development to compliment drug discovery may be one of the most important strategic decisions a pharma company can make to increase their R & D productivity and stay aligned with the evolving new healthcare market.


Stanford options when faced with Pfizer $3 million CME grant offer

I have tried to come up with  ways for Stanford to have accepted the Pfizer grant without raising concerns for potentially compromising the integrity of the programs or perceived conflicts and potential influence despite the assurances to the contrary.  Clearly the size of the grant makes it notable and more troubling.  I wonder if Stanford would have been as receptive of a $10,000 grant.  I also wondered why Stanford was chosen by Pfizer and not several other Medical Schools, some that might need the funding more than Stanford.  I  struggled to come up with options.  Maybe I’m just not creative enough.  Here are some of the options I considered for Stanford:

1)      Turn it down outright (consistent with their previously stated concerns and philosophy).

2)      Accept

a.  Accept as they did but now ensure Pfizer gets no additional exposure and absolutely has no influence on programming. How do you do that without complying with full disclosure requirements or ongoing continued contact with Pfizer personnel?

b. Accept with understanding that no Pfizer personnel or agent will have any contact with Stanford School of Medicine personnel, staff, or faculty now that the grant has been made.  This would include representative calls on healthcare providers; even by appointment (will Pfizer representatives now have preferential access?) Also, remove the milestone payments which in itself projects and implies the potential for Pfizer influence on continuing the programs or not, depending on what they like or don’t like about past programs.

c.  Accept as a part of a pool of equal shares of funding from multiple pharmaceutical companies. Lower the financial threshold to a point where most companies could participate and thereby also dilute the potential influence and exposure of any one company on programs.

d.  Similar to c. above, insist that the funding come from multiple companies with a non-profit type organization which doesn’t specifically identify individual contributors in advertising.  “Sponsored by an educational grant from MutliPharma interest in CME credibility.”  I’m not exactly sure how this could work for full disclosure without identifying contributors to “MultiPharma…”

I completely understand how ridiculous some of these “accept” options sound.  Option 2c could work and this has been done for years at medical meetings and conferences.  None of the accept options feels right or different from what has been done or tried in the past and that is why option #1 was probably the decision that should have been made.  Surely, for such a worthy cause, Stanford must have other sources for financing CME, even the technology advances in CME as proposed.


Pfizer provides Stanford School of Medicine $3 million grant for CME

This story is making it around the newswires and industry blogs. This may not have even been a story if Stanford had not taken such a hard stand previously about the pharmaceutical industry financial influence. You can go to the Stanford website for their release. http://med.stanford.edu/ism/2010/january/cme.html

I couldn’t resist commenting myself;  so here is what I have posted on some sites:

Unrestricted grants are not a new concept. I’m not sure how, or if, this is different. While Stanford control and lack of Pfizer input on specific content may be the implied distinction being proposed here, that has been the intent and practice of many unrestricted pharmaceutical industry grant supported programs including many ACCME programs in the past. Without more transparency about the negotiations that took place surrounding this grant, it is hard to understand how identifying “programs of mutual interest” with “milestone” payments hasn’t already or isn’t going to influence what topics are going to be covered in these Pfizer sponsored Stanford programs.

It appears that Pfizer merely found the price point at which Stanford was willing to compromise its previously stated position (Stanford Report dated September 13, 2006 “New Policy Limits Drug Industry Access”) that “industry-directed funding may compromise the integrity of these education programs”. The $3 million seems to have also moderated Dr. Pizzo’s concern about “the pervasive presence of the pharmaceutical industry in the medical profession” and his desire for Stanford educational activities to “not be influenced by any kind of financial industry support.”

A couple of things must have happened. Either Stanford could not find sufficient alternative sources of funding for their continuing medical education department and/or the $3 million was just too hard to turn down.

I guess everything still has a price; you just have to figure out what it is. This relationship based on a $3.0 million grant does not help move CME forward for the industry, academia or healthcare providers. It provides validation for those who continue to be concerned about financial influences of the industry. Pfizer merely proved that even Stanford can’t resist…when the price is right.

The Disappearing Pharmaceutical Sales Role

Editorials and commentary on Pharma web and blog sites continue to highlight the massive layoffs of pharmaceutical sales reps. These are frequently accompanied by commentary with justifications and desperate rationalizations for maintaining the role of the traditional pharmaceutical sales representative. Most frequently, the commentaries blame regulatory constraints and promotion guidelines for the diminishing value reps can now provide.  Many forget that the industry has brought this upon themselves by repeatedly compromising market trust with blatant advertising and promotion abuses.

Here is the reality. Physicians no longer value sales people or the information they try to convey.  Patients and office staff see sales reps waiting in the office delaying appointments and taking up physician time. Managed markets find sales people a nuisance and counterproductive to their formulary management and cost control initiatives. Legislators and regulators see the reps as uncontrollable extensions of the “not to be trusted” corporate, Big Pharma and feel compelled to restrict sales activities.  Yes, the reality is that sales reps and the information they convey are no longer respected, valued, or trusted. The traditional pharmaceutical sales role has become ineffective, and is quickly becoming obsolete.

If the industry has any hopes to deliver product information “in person”, it needs to abandon this traditional sales rep model, including the hiring profile, job requirements, title, and incentive compensation plans.  Yes, get rid of it completely.  There is no transformation or minor adjusting that will change the market perceptions or the effectiveness of this outdated model.

Healthcare providers in the evolving new healthcare market will still need information and education about pharmaceuticals and therapeutic options.  The internet, continuing medical education, and scientific meetings and conferences will continue to be major sources for product information. If the industry feels a need to continue to communicate product information “in person”, their only hope is with smaller therapeutic area teams consisting of far fewer life sciences trained (degrees) medical specialists with clinical training and therapeutic area expertise. Call them what you like (except sales people), their job will not be to “sell”. They will report to Medical Affairs in research, are salaried professionals with incentive compensation (if there is any) based on advancing their therapeutic expertise.  Their role will be as therapeutic consultants to healthcare providers and managed plans.  No slick marketing materials or gimmicks to curry favor. Their value is their familiarity with the literature, knowledge about the nuances of therapeutic options (competitive products including generic drugs) as they are of their own and they can back up claims and recommendations with data and literature support. Their job is to ensure the appropriate use of drug treatment, regardless of which product the healthcare provider prefers.  They will be seen and respected as therapeutic area experts.

While many might argue this sounds like the role of the Medical Science Liaison.  I would agree except that the industry has also corrupted and abused this once valuable resource, pushing them to glorified sales roles or enlisting them to covertly and overtly promote products for “off-label” use.  The roles proposed here are for true expertise, no sales responsibilities or expectations, and a genuine interest in supporting the information needs of healthcare providers for the benefit of patients.

The second management or aggressive marketers decide to take advantage of this newly established resource and push this group to a sale responsibility, they will once again, mitigate the value and compromise perhaps one of the last opportunities for credible, value-adding “in person” communication of product information with healthcare providers.