PMI’s Community of Practice for the Pharma-Industry did it again! They put together another outstanding webinar on November 13, 2012. Between the noon and the evening call we had over 700 registrants world wide. My special thanks go out to Prashant Rajopadhye for organizing this event. We were a bit short on time at the end of the call, so I wasn’t able answer all questions. As promised, please find below my answers to the questions gathered.
1. Is spending per approved drug a proxy for a company’s efficiency?
The numbers shown in the webinar were based on a study published earlier this year by Forbes. Click here to find the article. These numbers don’t account for research on additional indications for existing drugs, which is a non-trivial part of the work in Pharma R&D organziations. However, the numbers are both indicative of how efficient R&D is performed and how effective the leadership team is picking promising compounds.
2. What are the sources for crowd fundings? Just a few main sources?
The idea of crowd funding is that people like you and me can invest in companies with an appealing idea. There are a number of sites such as Kickstarter that bring entrepreneurs and “retail investors” together. Crowd funding promises to be another viable financing option (next to Venture Capitalists, Banks, Angels) for companies looking for capital in exchange for equity. As I mentioned on the call, it’s also an opportunity to test out an idea. In particular for consumer oriented companies, it’s a way to find out if a product or service has a wider appeal.
3. I dispute the claim that R&D is enhanced by merger. As an employee of Burroughs Wellcome, GlaxoWellcome and then GlaxoSmithKline – bigger does NOT map directly to more discoveries but instead impead discover if only because of the additional levels of approval required. Please comment.
I agree that M&A transactions are a double sided sword. Over the last few years we have seen a number of large scale mergers across the globe. We have seen large drug companies consolidating their operations. In a recent article with Contract Pharma I surveyed the deal landscape over the last few years. The hope is that post-merger, the acquiring company will have a stronger pipeline of drugs that can be carried forward in their R&D organization. Additional benefits are an enhanced worldwide distribution system to better access strategic markets. In some cases, companies can retire plants because of redundant manufacturing infrastructure. These are the main reasons why it is so tempting for CEOs to look at M&A. However. It’s one thing to put an M&A deal together. It’s another to make a deal work. Overcoming post-merger integration issues is a non-trivial task. First, there are cultural issues between the two companies starting at the executive level down to the lab level. It takes years for companies to fully develop a combined culture, and sometimes it really doesn’t happen at all. Second, the promise of a solid pipeline of drugs could be overestimated. In other words: 1+1 < 2. Third, post-merger integration slows down a business considerably. The day a deal is announced people begin to worry about their future instead of being focused on the task at hand. What will happen to my organization? What will happen to me? Should I start looking for a new job? This kind of thinking happens on both sides – the acquiring company as well as the acquired one. During the integration phase, organizations spend a lot of time making it all work. Who is in charge? Who is part of the go-forward team? What should our process be?
4. How do you address the ethical concerns of external funding?
The processes or procedures are actually the same in either case. Small and mid-sized companies are subject to the same ethical rules and regulations that apply to larger firms.
5. Can you comment on the emergence of personalized medicine and it’s impact on the three major topics in today’s presentation?
This is a big question. So much for now. The technologies underpinning personalized medicine could enable the pharmaceutical industry to develop a more efficient drug development process, based on the latest research on disease pathophysiology and genetic risk factors. Furthermore, a therapeutic agent could be marketed on the basis of a companion theranostic test result.
In the webinar we talked about some of the enablers for this sort of development. DNA Sequenzing, cloud computing and big data analysis. Only because of advancements in these areas we are able to look for personalized medicine.
6. Thanks Dr. Andreas. Very good analysis on the oppurtunity in the Pharma industry. I would like to understand in current or future webinar : How can i add value as PM in this industry. Do I need to have an in-depth knowledge on Pharma process and procedure.
It’s definitely important that you, as the PM, understand Pharma processes and procedures. This allows you to effectively communicate with your peers, who likely will be scientists. It also allows you to put together credible cross functional project plans.
Some companies insists that their PMs should have a scientific background. I personally believe that it can be helpful, but that it’s not a requirement to be successful in that role. But again, you need definitely a solid understanding of all the relevant processes and procedures.
7. Andreas, do you think that the implementation of ISO 21500 could help sponsors to reduce CROs inefficiencies regarding PM?
I have no data points that allow me to come up with a definitive answer specific to ISO 21500. However, I think a lot of confusion in the relationship between Sponsors and CROs can be avoided by providing transparent status of a project. To the extent that the application of ISO 21500 helps with this problem, I believe it can have a positive impact.
8. What is the best way for an eperienced PM/PMP ina different high-tech area to prepare for a job in Pharma?
I think it is important that you learn in depth how the pharma R&D process works. Some companies have mapped out their processes explicitely. If that is the case for the company you are working for, then I would strongly recommend to study those process maps in great detail. It also helps, if you are familiar with the therapeutic area you are working in. Both the familiarity with processes as well as a – at least highlevel – understanding of the therapeutic area helps you to communicate effectively with your team members.
9. How do other countries compare with USA with regard to patent periods before generic competition is allowed?
Significant international harmonization of patent term across national laws was achieved in the 1990. The WTO implemented the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPs Agreement). Article 33 of the TRIPs Agreement provides that the “The term of protection available [for patents] shall not end before the expiration of a period of twenty years counted from the filing date.” Consequently, in most patent laws nowadays, the term of patent is 20 years from the filing date of the application. This however does not forbid the states party to the WTO from providing, in their national law, other type of patent-like rights with shorter terms. Utility models are an example of such rights. Their term is usually 6 or 10 years.