RE-INVENTING PHARMA by ajizai

VIEWS: 40 PAGES: 20

									              THE EXECUTIVE ISSUE N°37 | 2011




RE-INVENTING PHARMA
02 › From Turmoil to Turnaround, Pharma Must Reinvent Itself



11 › Biotech and Pharmaceuticals: Where $cience Meets
      Finan€e … or not




16 › OTC: More Opportunities for Pharma




Numbers May Drive the Business, but it’s Your People Who Drive the Numbers
    Pharmaceutical Industry



    From Turmoil to Turnaround, Pharma Must
    Reinvent Itself

    When the “Patent Cliff” and Cost-Containment Hit

    For years, analysts had predicted it. The infamous “patent cliff” is no longer a future event. We
    are in the middle of it and Big Pharma is suffering. To add to the pain, payers—whether public
    or private—implement all sorts of measures to reduce the costs of healthcare or at least to
    contain them. Budgets for pharmaceuticals products have been, are and will remain among the
    primary targets for healthcare cost containment.

    The Patent Cliff is NOW                                                 Cost-containment will not stop, it
    In the years between 2002 and 2013, Big Pharma will see US$ 180         will accelerate
    billion of sales disappear from the top line of Big Pharma. Price       Despite seizing the opportunity created by the Patent Cliff,
    Waterhouse Coopers predicts that the largest pharmaceutical             payers will not stop their efforts to contain the healthcare costs.
    companies will see from 14% to 41% of their revenues disappear
    when the patent expires on many of their leading products. In           Demographics and macroeconomics pose increasingly large
    2011, more than US$40 billion of sales are facing “generic risk”        challenges to health policy makers.
    as blockbuster products like Lipitor®, Plavix®, Zyprexa®, Aprovel®
    and Seroquel® lose market exclusivity.                                  With an ageing population,
                                                                            •	 More people are subject to age-related illnesses, from
                                                                                CVD to cancer or Alzheimer’s disease. Treating such
                                                                                illnesses is costly.
                                                                            •	 There are proportionally fewer individuals who work
                                                                                and earn money. This makes it harder to levy sufficient
                                                                                taxes and insurance premiums.


                                                                            As a result of the economic crisis, unemployment has reached
                                                                            levels not seen for years. This further reduces the sources of
                                                                            healthcare funding and adds to healthcare deficits. Consequently,
                                                                            public and private payers will continue to deploy every effort to
                                                                            exert more and better control over the pharmaceutical industry.


    An opportunity for payers
    Over last two decades, pharmaceutical expenditures have
    consistently increased faster than GDP. The Patent Cliff                  Unprepared for Changes
    represents a great opportunity for payers to:                             While 80% of healthcare executives recognize that the changing
                                                                              economic environment will impact their industry, only 34%
    •	 Accelerate generic penetration
                                                                              believe that their organisation is ready to cope with those changes.
    •	 Stabilize costs                                                                                                          (McKinsey survey)
    •	 Reduce price benchmarks for entire therapeutic classes


    From a public health perspective, such an opportunity may allow
    better accessibility to and affordability of pharmaceutical products.


2   The Executive Issue 37 | 2011
                                                                                                                      Pharmaceutical Industry




Pharma 2011: It is no longer enough to develop another “me-too” drug and
promote it to doctors. The Game has completely changed.

Until recently, Big Pharma could develop products that provided a modest increase in benefits over existing
medications. It could market them rather easily by promoting a new brand heavily to prescribing physicians
through a large sales force. A patient would simply have Big Pharma’s prescription filled at a pharmacy and
someone somewhere would pay for it. The industry could also impose “its” prices, which allowed Pharma to
enjoy rather high profit margins and accept somewhat low productivity.


Power Shift in Pharmaland and the New Rules of the Game
Many economic and social factors have been reshaping the                      •	   Controlling how medicine is practiced
pharma landscape.                                                             •	   Dictating how, to whom, by whom and according to which
                                                                                   criteria pharmaceuticals are to be prescribed
Good health costs money                                                       •	   Imposing preferred use of generic drugs or cheaper
Contrary to an old adage, health is anything but priceless.                        alternatives
Certainly, healthcare is not free. With the growing importance                •	   Capping or cutting prices
of healthcare budgets, the people who control them (the                       •	   Restricting or stopping reimbursement
Payers) realize that they have great power in their hands. Now                •	   Modulating doctors’ remuneration to pharma expenditures
they have begun exercising their power.                                            targets

Dictating medications, costs, conditions                                      Toward patient empowerment
Payers are numerous. They range from social security, to private              However, the power shift in Pharmaland is about more than
insurers (thus, also employers) to patients themselves. While                 money. Thanks to the internet, patients are more and better
they have various and sometimes diverging interests, they share               informed than at any time before. They want to take control or
a very important one. They want “Value for Money”. Their size,                at least influence their treatments—and they do. Third-party
scale and authority give public payers the greatest and most                  payers will also take advantage of this by promoting self-care
direct power over healthcare. They do not hesitate to exert their             and OTCs. Patient empowerment is underway!
power by, for example:




                   Doctor                                                                             Doctor


                                                  PharmaCo                                                                         PharmaCo




                                          Patient
                                                                                                                           Patient
                                                                                           Payer
  Payer


                      From a traditional model where doctors had almost all power, pharma must now operate in model where Payers and Patients have a
                      considerable weight and influence in the decision-making process.



For more information and registration, please visit www.mce-ama.com                                                                                    3
    Pharmaceutical Industry




    The Game has changed.                                                   How MCE Works with Clients
    Pharma must also change!
    The Biotech industry has contributed significantly to the               Custom-Made Solutions to Make
    improvement of healthcare. Until recently, it could impose its          Things Happen
    conditions, from exclusivity (patents) to prices. But the reality
    has dramatically changed due to:                                        At MCE, we develop the people in YOUR organization to get
    •	 Massive healthcare deficits                                          YOUR strategy executed. Our network of MCE Associates
    •	 The Patent Cliff                                                     has broad and senior international experience in the
                                                                            Biopharmaceutical industry. They can help any functional
    •	 Cost-containment
                                                                            area in your company solve problems around implementing
    •	 Power shift towards Payers and Patients
                                                                            your strategy. They will focus their expertise on helping your
                                                                            organization adapt to the demands of the new pharmaceutical
    The pharma stakeholders are no longer able or inclined to accept        environment.
    the traditional model that made the industry so powerful and            Working together with you, we will take the following steps to
    successful for decades.                                                 ensure that we focus on your key business issues:
                                                                            1- Understand the business issue you describe to us
                                                                            2- Work with you to analyse the needs of your company
    Pharma must change now, by:
                                                                            3- Decide together the most appropriate solution for your
    •	 Reducing costs                                                          specific business needs
    •	 Increasing overall productivity                                      4- Develop with you a custom-made solution that
    •	 Managing health outcomes instead of selling medicines                   addresses your needs
    •	 Learning how to operate in lower-prices and lower-margins            5- Implement the solution with you
        models                                                              6- Make sure that you get clear results and benefits
                                                                               from the implemented solution
    •	 Developing drugs faster and in a cheaper way
    •	 Networking and partnering with the outside world instead
                                                                            MCE’s Custom-Made Solutions and Workshops are concrete and
        of acting alone                                                     practical. They lead to clear results and benefits to your organization.
    •	 Reinventing its entire Value Chain                                   If you would like a deeper understanding as a management
                                                                            committee, we will come to you. We can come to your
                                                                            company and work with your senior management to help your
                                                                            organization understand what the changes in the pharmaceutical
             How MCE can help you as a Manager                              environment mean for your company and the implementation of
        You have an idea as to how your company should change to succeed,   your strategies.
        but you are not sure you get the full picture and you certainly     For more information, please contact Patrick Faniel, Director
        don’t have the time to think things through. You are looking for    of Custom-Made Solutions at +35 2 543 21 20 or by mail at
        a sounding board and challenge from your peers and experienced      pfaniel@mce-ama.com
        business leaders. How can you translate some of those concepts to
        YOUR company and YOUR strategies and tactics?
                                                                            MCE’s “Mini-MBA in Pharma”
                                                                            is one of the most popular and appreciated programs among the
        MCE’s open enrolment workshop, The New Business Model
                                                                            open enrolment workshops that we deliver. The 5-day Mini MBA
        in Pharmaceuticals, will help you to adapt to evolving pharma
                                                                            for the Pharmaceutical Industry.
        industry strategies, develop news skills needed for the new
        pharma environment and develop plans to change and adapt your
                                                                            For details, visit: www.mce-ama.com/1429.
        organization. For details, please visit: www.mce-ama.com/2255.




4   The Executive Issue 37 | 2011
Pharmaceutical Industry



How will you adapt to the new realities of
the Pharmaceutical Industry?

Evolving from Prescribers to the Stakeholders: Your new Customers, their roles, their needs and
how to fulfill them

Who is the Customer?                                                  Stakeholders Mapping for Better
In the past, we would answer, “Doctors, essentially”. Nowadays,       Understanding
the trendy response is “Payers, mostly”. However, the truth is        Delivering your Biotech value proposition successfully means
probably not so simple and certainly not as general as suggested.     that you correctly map your stakeholders by:
                                                                      •	 Recognizing your Customer and all other relevant
Who is the customer? It all depends on what you have to “sell”.           Stakeholders
                                                                      •	 Understanding their respective roles in decision-making
Is your offering a:                                                   •	 Identifying their specific needs and wants
•	 Primary-care product?                                              •	 Selecting the right messages to each of them
•	 Specialty prescribed at the office?                                •	 Using the right communication channels
•	 Generic drug?
•	 Life-style product?                                                From Registration to Market Access and later Marketing, we
•	 OTC self-medication?                                               must increasingly adopt a holistic view when planning and
•	 Hospital product?                                                  executing our strategies. Because in most situations a single
•	 Commodity?                                                         function does not have all the responses or cannot deliver
•	 Highly specialized medicine?                                       optimally to all stakeholders.


What you are offering makes a huge difference in defining who         Holistic view also means aligning of our key functions along our
your customer is.                                                     stakeholders’ need, in:
                                                                      •	 Research & Development
The Stakeholders                                                      •	 Medical Affairs
In most of cases, we do not deal with a unique customer. Other        •	 Strategic Marketing
persons, groups, bodies or systems have an impact on the decision-    •	 Operational Marketing & Sales
making process. Collectively, they are known as The Stakeholders.     •	 Supply Chain




For more information and registration, please visit www.mce-ama.com                                                                      5
    Pharmaceutical Industry




    1. Market Access
    Market Access is the hottest topic in the industry. It is also the         How MCE can help you
                                                                           The short-to-medium-term outlook for the pharmaceutical
    perfect example of the most challenging task requiring a true
                                                                           market is very turbulent, and market access is becoming THE
    holistic approach.                                                     key hurdle. Pharmaceutical companies need to challenge the
                                                                           fundamental rules of the game to unlock the doors that are
    A winning Value Proposition means: Getting the right                   closing on them.
    indications and labels, developing the right outcome data and
    accurate pharmaco-economic package, in time. All this requires         Do you want to assess the value of the different market access
                                                                           strategies? Do you want to determine the critical success factors
    a thorough understanding of the stakeholders and their needs.
                                                                           for making new business models work? Do you need to learn how
    It also needs a masterful orchestration of a complex web of
                                                                           to use successful concepts and techniques for influencing the key
    activities, from R&D to Strategic Marketing.                           decision makers in the market access space?

    Having a winning Value Proposition doesn’t automatically mean          For companies and management teams MCE’s Senior Associates
    that you have won the game. In fact, it is just the beginning of it.   can help your company’s managers with all of these challenges.
                                                                           Our Senior Associates all have more than 20 years of business
                                                                           experience at the top levels of organizations in your industry. They
    To really access the market, you need to create a welcoming
                                                                           will work with you to identify the problems your company is having
    and supporting context for your offering. Here, networking and         as it seeks market access. And, they will help guide you through the
    building relationships with decision-makers and influencers is         impacts these changes will have for all parts of your organization.
    the challenge. And the list of involved parties can be quite long:
    •	 Health technology assessment agencies                               Contact Patrick Faniel, our Director of Custom-Made Solutions,
    •	 Reimbursement bodies                                                and let us show you how we can put together and roll out a
                                                                           programme that answers your specific needs.
    •	 Insurers
                                                                           Director Custom-Made Solutions
    •	 Institutional purchasers
                                                                           Tel: +32 2 543 21 20
    •	 Pharmacology committees                                             Email: Patrick.Faniel@mce-ama.com
    •	 Patients
    •	 Patients groups                                                     For individual managers
    •	 Politicians                                                         MCE’s open enrolment workshop, Market Access, Pricing and
                                                                           Health Outcomes: The New Reality in the Pharmaceutical
    •	 Medical associations
                                                                           Industry provides answers and insights into the landscape of this
    •	 KOLs
                                                                           changing market. For details, visit: www.mce-ama.com/2259.
    •	 Pharmacists, nurses and other HCPs
    •	 … and yes, also Doctors!                                            To get a clear view on the true meaning of “Key Account
    Why Doctors? As long as a prescription is required to get              Management” and to elaborate institutional sales strategies that
    your product, physicians will remain a gate keeper of primary          enhance your competitive edge, we recommend MCE’s open
    importance, one who can obviously not be neglected.                    enrolment workshop, Institutional Selling: Selling to National
                                                                           Health Insurance Systems, Hospital Networks, Buying Groups
    Again, a holistic and well-orchestrated multi-disciplinary
                                                                           and Insurers. For details, visit www.mce-ama.com/2330.
    approach in the delivery of the Value Proposition is one of the
    keys to your success in strategy execution.



                                             Quality                                                          Insurers
                                                                                        HTA agencies

       Regulatory                              Your                                               Doctors                  Patient
                                    Safety                                      Value
       Agencies                                Drug                                          Patients                      Groups
                                                                                                            Politicians

                                             Efficacy                                              Purchaser


6   The Executive Issue 37 | 2011
                                                                                                                Pharmaceutical Industry




2. Growth ahead, but where?                                             3. Growing also the Bottom Line by
Not everything is dark in the Biotech environment. Indeed,                 Increasing Productivity
there is still growth ahead of us. Many factors are helping the         Pharma may have many good reasons to say that the golden
market to expand:                                                       years are behind us. Goodbye to the era of the blockbusters
•	 With the ageing of the overall population, demographics              with very high gross margins. Welcome to the reality of most
    are favourable to us                                                other industries.
•	 Innovations are welcomed and advancement of science
    and technology makes them possible                                  However, the financial community is not looking for explanations.
•	 The emerging economies are awaking and a large new                   Instead, it demands good returns on its investments. Senior
    middleclass can now afford our medications                          management has no other choice but to capture growth
•	 Governments encourage self-treatment, thus OTC is                    opportunities. At the same time, it needs to reduce costs, and
    poised to increase                                                  improve productivity. Possibilities are plentiful.
•	 Due to the patent cliff, generic products will lead to
    substantial volume increases as price barriers are reduced          Manufacturing and the supply chain
                                                                        Thanks to the high margins that Pharma has enjoyed,
Pharma must learn and get new skills to capture                         manufacturing and the overall supply chain have been neglected
these opportunities                                                     as potential sources of profit. By making the lowest performer
If we speak about innovation, we witness what observers have            reach the productivity of the best-in-class drug makers, Pharma
referred to as “the R&D Productivity Paradox”, whereby Pharma           could save US$ 65 billion, according to McKinsey.
continuously spends more resources and gets less NMEs and
BLAs approved.
                                                                               How MCE can help you
                                                                          For companies and management teams MCE’s Senior Associates
In R&D, Biotech must become more agile and creative. It must
                                                                          can also work with your management team and design and deliver
find faster, cheaper ways to bring innovations to the market.             a custom made solution that addresses your company’s specific
                                                                          needs in strategic sourcing and supply chain. For details, contact
                                                                          Patrick Faniel at: +32(0)2 543.21.20,
        How MCE can help you                                              or email him at: pfaniel@mce-ama.com.
   Interested in learning about a new model for pharmaceutical
   research based on small-scale, highly focused, interdependent          For individual managers
   organizational entities?                                               Managers in Production, Supply Chain, Logistics, and Procurement
                                                                          will gain insights they can turn into profits when they participate
   For individual managers                                                in our open enrolment workshop, Operational Excellence in
   Register online for our workshop Managing R&D through                  Pharma Supply Chain Management.
   Effective Collaborations and Partnerships in Pharma.                   For details, visit: www.mce-ama.com/2328.
   For details, visit: www.mce-ama.com/2256.
                                                                          Supply Chain Management in Pharma: Strategic Sourcing and
   If you need to identify opportunities and threats when developing      Supply Chain Governance provides a forum for exploring the
   a personalized medicine product, we recommend MCE’s open               latest trends and best practices for saving money and turning a
   enrolment workshop, Personalized Medicine: What it means for           profit through better management of the supply chain.
   Pharma. For details, visit: www.mce-ama.com/2322.                      For details, visit: www.mce-ama.com/2325.


   For companies and management teams MCE’s Senior Associates
   can also work with your management team and design a custom
   made solution that addresses your company’s specific needs in
   the areas discussed above. For details, contact Patrick Faniel at:
   +32(0)2 543.21.20, or email him at: pfaniel@mce-ama.com.




For more information and registration, please visit www.mce-ama.com                                                                             7
    Pharmaceutical Industry




                                                                        Emerging Economies: New World and New
                                                                        Markets becoming “Strategic”
                                                                        In the recent past, Asia, Middle-East and Latin America were
                                                                        considered as purely opportunistic markets. The former head
                                                                        of Marketing for Asia & Middle East of a large pharmaceutical
                                                                        company tells us: “At time of budget presentation to the Board,
                                                                        we were always left for the end as our contribution was seen as
                                                                        nice, but not strategic.”


                                                                        Things have drastically changed. While Big Pharma streamlines
                                                                        operations in the West, it recruits and invests heavily in BRIC
                                                                        +TKM, but also in other emerging regions of the world like
    Improving Marketing & Sales                                         Middle East. Africa will follow soon.


    Commercial functions are undergoing major transformations
    to increase productivity. The traditional sales function is being         How MCE can help you
    replaced by Key Account Management and some forms of digital          From 2009 forward, it is predicted that “Pharmerging” will
    marketing. Global brands are becoming the norm. Marketing             be responsible for more than 50% of the growth in the global
    is increasingly managed globally or at least regionally. While        pharmaceutical markets. To learn more about the strategic options
                                                                          that you should consider for those markets, MCE recommends
    DTC advertising is unlikely to come to Europe, customer and
                                                                          our open enrolment workshop, Managing Emerging Markets:
    patient centricity are concepts that companies can no longer
                                                                          Strategic Decisions, Operational Options. For details, visit:
    ignore. (Please see our story on Customer Centricity at:              www.mce-ama.com/2319.
    www.mce-ama.com/customerfocus2011)


             How MCE can help you
       MCE has developed a series of workshops where you can exchange
                                                                        When Prescription Generics Become Trendy
       ideas and debate with your peers about new commercial models,    Who could imagine that R&D based companies like Pfizer and
       new marketing approaches and pathways to improvement.            Sanofi-Aventis would become so active in Generics? Novartis
                                                                        had already shown the way. Now the largest firms are joining
       “Commercial” Effectiveness in Pharma: Think beyond Sales
       Force Effectiveness. For details, visit: www.mce-ama.com/2329.
                                                                        the movement.


       Customer and Patient Centricity – Organizations and
       Empowered Patients: Possible Approaches.
       For details, visit: www.mce-ama.com/2314.
                                                                              How MCE can help you
       Digital Marketing Strategies in the New Healthcare                 To explore the latest practices in the Generics market, MCE
       Environment.                                                       recommends our open enrolment workshop, Generic Markets
       For more information, go to: www.mce-ama.com/2285.                 and Big Pharma: Pure Player Going Hybrid? Old Models in
                                                                          New Markets? For details, go to: www.mce-ama.com/2315.
       Managing Brands Regionally and Selling Locally: Efficient
       Marketing Matrix and Processes in Pharma.                          For companies and management teams
       For details, visit: www.mce-ama.com/2317.                          MCE’s Senior Associates can also work with your management
                                                                          team and design and deliver a custom made solution that
       Key Account Management in Pharma: From a General                   addresses the complex issues around moving into the Generics
       Approach to Targeted Sales and Company-wide Selling.               market. For details, contact Patrick Faniel at: +32(0)2 543.21.20,
       For details, go to: www.mce-ama.com/342.                           or email him at: pfaniel@mce-ama.com.




8   The Executive Issue 37 | 2011
                                                                                                           Pharmaceutical Industry




HR & Talent Management
                                                                      How MCE can help you
HR Paradox
                                                                      Do you want to meet with your peers from other industries to
It is strange but true: Today the industry is consolidating,          discuss the challenges that your industry is facing in the HR
                                                                      area? Do you need to learn about the best practices post-M&A
organizations are streamlined and pharmaceutical companies
                                                                      in your industry and other industries? Do you need to nurture the
accelerate outsourcing. And suddenly, executives in life science      development of Leadership in your company?
companies identify shortage of skills as the largest risk they
are facing. (Deloitte, 2009)                                          For companies and management teams
                                                                      MCE’s Senior Associates can also work with your management
If staff is truly the most valuable asset of a company, as Biotech    team and design and deliver a custom made solution that
                                                                      addresses your company’s specific needs in talent management,
executives commonly say, it is of primary importance to secure
                                                                      performance management and succession planning. For details,
such an asset. In times of economic downturns, of uncertainty
                                                                      contact Patrick Faniel at: +32(0)2 543.21.20, or email him at:
created by mergers and acquisitions and the related “synergies”,      pfaniel@mce-ama.com.
retaining critical talent is a top priority.
                                                                      For individual managers

Preparing your Future by                                                  MCE recommends the following open-enrolment workshops:
                                                                           Securing Pharma Skills & Talent Management for Superior
Building Talent                                                       and Sustained Performance
                                                                      For details, visit: www.mce-ama.com/2323.
In the generation that will soon replace current senior
management, there are fewer people and there are even                 Leadership Post-M&A: Striving for Successful New PharmaCo
fewer of the right people. As part of their talent management         For details, go to: www.mce-ama.com/2316.
and succession planning, pharmaceutical companies need to
develop their high potential people.                                  Leadership for Senior Managers: How to Get Your Strategy
                                                                      Implemented throughout Your Organization For details, please
                                                                      visit: www.mce-ama.com/2154.
More than ever before, the dynamics and fast pace in Pharma
require cross-functional managers who master complexity and           Leadership for Senior Managers: Special Edition for Women
go beyond silo thinking.                                              For details, go to: www.mce-ama.com/2267.


The industry is in profound transformation. New business              For high potential managers being groomed for international
                                                                      business roles in the next 1-5 years, MCE has designed an
models are being created. As the new strategies are rolled-
                                                                      extensive workshop, Getting Ready for Your Future Role as
out, you need strong and inspiring leaders who can swiftly and
                                                                      Senior Manager in the Pharmaceutical Industry.
thoroughly implement the new strategies.                              For details, visit: www.mce-ama.com/2338.




For more information and registration, please visit www.mce-ama.com                                                                       9
     » OPEN ENROLMENT WORKSHOPS




     › Pharmaceutical Industry Open Enrolment Workshop

     The New Business Model in Pharmaceuticals             Pharmaceutical Product Management: Building
     . www.mce-ama.com/2255                                Your Brand in the New Healthcare Environment
                                                           . www.mce-ama.com/613
     Market Access, Pricing and Health Outcomes: The
     New Reality in the Pharmaceutical Industry            The 5-Day Mini MBA for the Pharmaceutical
     .    www.mce-ama.com/2259                             Industry
                                                           . www.mce-ama.com/1429
     "Commercial" Effectiveness in Pharma: Think
     beyond Sales Force Effectiveness                      Development & Manufacturing: Strategic Choices
     .    www.mce-ama.com/2329                             Ahead in the Pharmaceutical Industry
                                                           . www.mce-ama.com/2257
     Institutional Selling: Selling to National Health
     Insurance Systems, Hospital Networks, Buying          Managing R&D through Effective Collaborations
     Groups and Insurers                                   and Partnerships in Pharma
     . www.mce-ama.com/2330                                . www.mce-ama.com/2256
     Key Account Management in Pharma: From                When Clinical Development Turns into Clinical
     a General Approach to Targeted Sales and              Practice
     Company-Wide Selling                                  . www.mce-ama.com/2260
     . www.mce-ama.com/342
                                                           Leadership Post-M&A: Striving for Successful New
     Managing Brands Regionally and Selling Locally:       PharmaCo
     Efficient Marketing Matrix and Processes in Pharma     . www.mce-ama.com/2316
     . www.mce-ama.com/2317
                                                           OTCs: Fundamentals of Patient and Consumer
     Managing Emerging Markets: Strategic Decisions,       Marketing Communications
     Operational Options                                   . www.mce-ama.com/2318
     .    www.mce-ama.com/2319
                                                           OTCs: Distributing to and Managing Sales with
     Generics Markets and Big Pharma: Pure Player          Pharmacists
     Going Hybrid? Old Models in New Markets?              . www.mce-ama.com/2327
     .    www.mce-ama.com/2315
                                                           Outsourcing and Virtual PharmaCo: Strategic
     Medical Affairs in the Pharmaceutical Industry:       Planning and Best Practices
     Protecting vs. Supporting Roles and Keys to Success   . www.mce-ama.com/2321
     .    www.mce-ama.com/2258
                                                           Supply Chain Management in Pharma: Strategic
     Value-based Marketing in the Pharmaceutical           Sourcing and Supply Chain Governance
     Industry                                              . www.mce-ama.com/2325
     . www.mce-ama.com/2137
                                                           Operational Excellence in Pharma Supply Chain
     Customer and Patient Centricity - Organizations       Management
     and Empowered Patients: Possible Approaches           . www.mce-ama.com/2328
     . www.mce-ama.com/2314
                                                           Securing Pharma Skills & Talent Management for
     Digital Marketing Strategies in the New               Superior and Sustained Performance
     Healthcare Environment                                . www.mce-ama.com/2323
     .    www.mce-ama.com/2285
                                                           Getting Ready for Your Future Role as Senior
     Personalized Medicine: What it means for Pharma       Manager in the Pharmaceutical Industry
     . www.mce-ama.com/2322                                . www.mce-ama.com/2338

10
24   The Executive Issue 37 | 2011
     The Executive Issue 37 | 2011
Biotech and Pharmaceuticals



Biotech and Pharmaceuticals:
Where $cience Meets Finan€e … or not

Reality of Biotechnology in Life Sciences: Drug Development is Risky,
Costly and Lengthy
There is one constant in the world of biotechnology: Drug development is costly and lengthy.
It may take as long as 10 to 15 years to bring a new product to the market. Developing biotech
products is very capital-intensive.

The crisis hitting Biotech hard                                               How MCE Can Help You
                                                                         You and your team are focused on your Research and Development
Biotech companies routinely have to raise large amounts of “risk
                                                                         projects and their financing. But you also want to have a better
capital”. During the last three years, the financial and economic        understanding of the pharmaceutical market. You want to gain
crisis has made it very difficult to raise capital for investment.       valuable insights into what Big Pharma is searching and how the
                                                                         industry is transforming. You want to know what, why and how
Difficulties for Biotech SMEs                                            Big Pharma is looking at personalized medicine – most of which
European pharmaceutical small and medium-size enterprises                comes from your Biotech industry.

(SMEs) have been hit hard by the economic challenges of the
                                                                         For individual managers
global financial crisis. For biotech companies on both sides of          To help you understand more about these business issues, MCE
the Atlantic, the crisis has created numerous difficulties. As a         has developed the following two open enrolment workshops for
result, many biotech firms have gone out of business.                    managers in the Biotech industry. The 5-day Mini MBA for the
                                                                         Pharmaceutical Industry is design for managers who want to
                                                                         get a good overview of how business works in a Pharmaceutical
                                                                         or Biotech company. For details, visit: www.mce-ama.com/1429.

                                                                         To help you understand how the changing environment and the
                                                                         increasing number of stakeholders can mean for the pharma
                                                                         industry and your company, subsidiary or division, MCE invites
                                                                         senior managers in all functional areas to participate in our open
                                                                         enrolment workshop, Personalized Medicine: What it Means for
                                                                         Pharma. For details, visit: www.mce-ama.com/2322.




                                                                       Decrease in venture capital
                                                                       A recent study funded by the European Commission highlights the
                                                                       decreasing levels of venture capital available for pharmaceutical
                                                                       SMEs. It also focuses on the impact of the global economic crisis
                                                                       on access to liquidities and credit. At least 40% of the SMEs
        How MCE Can Help You                                           surveyed will need access to capital within the year to survive.
   For companies and management teams
   MCE’s Senior Associates can meet with your management team          Biotech companies in life sciences now face a multitude of
   to help them formulate plans that address all aspects of a change
                                                                       challenges. They must attempt to navigate through a systemic
   or adjustment in strategy. To set up a meeting with an MCE Senior
   Associate, call:
                                                                       financial meltdown. There is also a deep-rooted uncertainty
   +32 (0)2 543.21.20                                                  inherent in their R&D activities. At the extreme, this could have
   Email: info@www.mce-ama.com.                                        implications for the sustainability of the sector and the viability
                                                                       of its business and financing model.


For more information and registration, please visit www.mce-ama.com                                                                           11
     Biotech and Pharmaceuticals




     ase   enture c
Decrea in ve      capital                        as
                                               ha always e
                                               do
                                                             evolved in ccycles of ups and
                                                                         s           d
                                                 owns. Yet, the authors suggested that the
     A slower recovery for biotech?
A recent st           d
            tudy funded by the Eur
Commissio highlights the decre
           on
                                  ropean
                                 easing levels
                                             s
                                               cu            s
                                                 urrent crisis may be dif fferent than any
                                               prrevious fund             nge        b
                                                              ding challen faced by the
of venture capital available for               bi
     In its 2009SM as well “Beyond Borders”, the prevastry. Their cainty in there based
biopharma             edition of as the
           aceutical MEs,                      on
                                                 iotech indus
                                                 n
                                                    Ernst & Young concerns ar financial
                                                              iling uncert
                                                                          noted             Biotech and pharma want their new investments to be as cost-
impact of the global economic crisis on        markets and the system characte
                                               m                         mic                 of
                                                                                     eristiceffective as possible. To do this, they will adopt a sharper focus
     thatliquidities and of pre-commercial pharmaceutical companies
access to l valuations credit. A Among the      he
                                               th crisis, wh hich has spr read globally across
     hadveyed, at lea 40% ind had that up. The landscape was alreadywould make the
SMEs surv              ast
            plummeted. Capital the t
                                 dicated dried esssentially all industries This
                                                                         s.                 on fewer lead products.
                                                                                                e
           eed
they will ne access to capital w within         ecovery much longer th usual, especially
                                               re                        han          e
year to surrvive. with struggling companies. Life riskier bus
     littered                                                sinesses like has
                                               in in biotechnology biotech.
                                                n                         e
       always evolved in cycles, with eups and downs. But the authors
Biotech co ompanies in life science now face
                                   es                                                            Today, many investors are focusing on later-stage pharmaceutical
a multitude of challeng as they attempt to
            e           ges        y                 Four pos
                                                     F             ssible p   paths fo    or
       suggesteda that the current crisis mayunding
navigate th hrough sy ystemic financial              fube different than any                     companies. Or, they are investing in other sectors that are
            and
meltdown a deep-ro     ooted uncertainty that is
                                                     B biotech industry.e few possi
       previous funding challenge faced by theiotech companies haveTheir bilities for
inherent to their R&D activities. T
           o                       This could, a
                                               at
                                                                                                 considered less risky than the biotech sector.
                                                     ra           unds they ne to purs their
                                                      aising the fu            eed        sue
           me,         plications fo on
the extrem have imp basedor the 1) the prevailing uncertainty in the
       concerns were                                                                             As a result, many biotech companies with early-stage projects
                                                      ctivities:
                                                     ac
            lity
sustainabil of the se              he         of
                       ector and th viability o
                                                     • Venture C   Capital (VC including Private
its busines and markets model. the systemic characteristic of the crisis:    Cs),
       financial finan
           ss         ncing and 2)
                                                         Equity (P
                                                                 PE)
                                                                                                 are struggling to gain access to funding for their R&D activities.
                                   across Erns       • Stock Ma               uding initial public
                                                                  arkets, inclu
In its It had spread “globally orders”, all industries. Today, many indicators
       2009 edition of “Beyond Bo              st
& Young o              at
           observed tha valuations of pre-                                    d
                                                         offerings (IPOs) and capital inc creases
       suggest that there is cogradual                    the economy. But governm
commercia biopharmaceutical aompanies recovery•in Subsidies from vario the
            al                                                     s          ous          mental and
had plumm         that capital had dried up annd                 ources
                                                         public so
           meted, mayctake longer in riskier businesses like biotech.
       recovery                                      • Pharmac               mpanies
                                                                  ceutical com
            ape
the landsca was alr                ed
                       ready littere with
struggling companies. Life in biot  technology                                                           How MCE Can Help You
                                                                                            The short-to-medium-term outlook for the pharmaceutical
       Potential Sources of Funding
                                                                                            market is very turbulent, and market access is becoming
          For Biotech Companies
                                                                                            the key hurdle. Pharmaceutical companies need to
                                                    VC’s & PE
                                                                                            challenge the fundamental rules of the game to unlock
                                                                                            the doors that are closing on them.
                                                                Stock
                                                               Markets
                                                                                            For individual managers
                                                                                            Senior managers in all functional areas in your company
                                                                                        will develop a new understanding of what these changes
                                                         Subsidies
                                                                                        can mean for the pharma industry and your company,
                                                                                        subsidiary or division when they participate in MCE’s open
                                       Pharma                                           enrolment workshop, Market Access, Pricing and Health
                                                                                        Outcomes: The New Reality in the Pharmaceutical
                                                                                        Industry. While exchanging experiences and views with
     Four possible paths for funding                                                    peers from other companies, you will explore the different
                                                                                        market access strategies and determine the critical
     Biotech companies have only a few possibilities for finding the                    success factors for making new business models work. For
                    need
     funds they 201 to pursue their activities:
Biopharma S
          Story June 10                 2                        on          d
                                                                                        details, go to: www.mce-ama.com/2259.
                                                                                         0
                                                            Versio 1.1 Updated 22 Apr 2010
     •	 Venture Capital (VCs), including Private Equity (PE)
     •	 Stock Markets, including initial public offerings (IPOs) and                    Clinical development is often focused on a financially risky
         capital increases                                                              “the-one-drug-that-cures-as-many-people-as-possible”
     •	 Subsidies from various governmental and public sources                          approach. But a “smaller-but-targeted” approach allows for
     •	 Pharmaceutical companies                                                        a step-by-step development and more manageable costs.


     Risk capital is available but venture                                                  For senior and upper middle managers from all functions
                                                                                            in your organization who need to know about the different
     capitalists are extremely cautious
                                                                                            models of pre-clinical and clinical development, how to
     As the biotech and pharmaceutical industries recover from the                          reduce time-to-market and how to minimize risks and
     financial crisis, venture capitalists remain extremely cautious.                       costs, MCE has developed the open enrolment workshop,
                                                                                            When Clinical Development Turns into Clinical Practice.
                                                                                            For details, visit: www.mce-ama.com/2260.




12   The Executive Issue 37 | 2011
                                                                                                      Biotech and Pharmaceuticals




Investment to get the product to                                      If investors continue thinking this way, a longer-term approach
market                                                                could be good news for some biotech companies. They are the
In a recent interview, the Executive VP of Safeguard Scientifics      few that clearly understand the drug development process and
Fund said that in 2010 there were fewer $50-million investment        the complex regulatory and reimbursement environment.
rounds. Investors were not interested in giving the company
enough money to survive until the next round of funding.              More than ever before, it is vital for companies to make sure
Instead, they were more inclined to think about the total             their clinical assets are developed with the highest level of
investment required to get a product from the earliest stages         quality, speed and cost effectiveness. Today is about survival
to market.                                                            and maximizing your company’s valuation.




Stock Markets and IPOs: A Theoretical Option in Today’s Economy
Pushed by venture capitalists that look for an exit strategy, many biotech companies consider IPOs. But many
planned IPOs were postponed or simply cancelled over the last three years.

Only companies already in later stages of product development
                                                                            How MCE Can Help You
might still have opportunities to raise capital on the stock
markets. However, valuations are not necessarily attractive.            Prior to going with an IPO, Senior Management of biotech
Valuations of larger and established European pharmaceutical            companies will need to have clear and robust views on
companies have improved over the recent months from their               their true financial needs and strategies. If your company
lows of 2008. Yet, they remain very far from the high valuations        is in this situation, we invite you to register for: Financial
of the early 2000s. Only time will tell whether the market              Management for Senior Finance Executives.
climate will improve sufficiently to enable IPOs again.                 For details, go to: www.mce-ama.com/output/2186.


                                                                        MCE’s Senior Associates can also meet with your
                                                                        management team to discuss the people issues involved
                                                                        in a new direction or adjustment to your strategy. To
                                                                        set up a meeting with a Senior Associate, call: +32 (02)
                                                                        543.21.20, or email us at: info@mce-ama.com.




Subsidies when public money
becomes scarce
Some biotech companies may try to get public subsidies,
for instance from the European Investment Fund or from
various national programs. But the crisis also fell hard on
governments and public finances in general. As a result,
biotech companies should not count on the availability of
public money to stay alive.




For more information and registration, please visit www.mce-ama.com                                                                      13
     Biotech and Pharmaceuticals




     Big Pharma Struggling with the Patent Cliff: The Opportunity for
     Biotech Companies
     During the years between 2002 and 2013, Big Pharma will see
                                                                                     MCE Can Help You
     US$ 180 billion of sales disappear. The peak losses will happen             For companies and management teams
     from 2010 to 2013. In 2011 alone, more than US$ 40 billion                  MCE’s Custom-Made Solutions and Workshops are concrete
     of sales are facing “generic risk” as patents expire for many of            and practical. They lead to tangible results and benefits to
     their leading products. These include blockbuster products like             your organization. We can come to your company to help your
     Lipitor®, Plavix®, Zyprexa®, Aprovel® and Seroquel®.                        management understand what the changes in the pharmaceutical
                                                                                 environment mean for you and the implementation of your
                                                                                 strategies.
     Rebuilding weak development portfolios
     Big Pharma has not been so effective in replenishing its                    For more information, please contact Patrick Faniel, Director
     development pipeline to compensate for the massive sales                    of Custom-Made Solutions at +32 (0)2 543 21 20 or by mail at
     losses it is now facing. So the industry is looking with                    pfaniel@mce-ama.com.
     increasing interest at biotech companies to revamp their weak
     development portfolios.                                                     For individual managers
                                                                                 To help your company, subsidiary or division meet the
                                                                                 challenges of an OTC market, MCE has developed an open
     “Future role of the biotech sector in                                       enrolment workshop, OTCs: Fundamentals of Patient
     Europe – full blown industry or sub-                                        and Consumer Marketing Communications. For details,
                                                                                 please visit: www.mce-ama.com/2318.
     supplier to big pharma?”                                                    To help your distribution and sales teams work effectively with
                                                                                 pharmacists, MCE has developed the open enrolment workshop,
                 – Leif Jakobsen in The financing of biopharmaceutical product
                                                                                 OTCs: Distributing to and Managing Sales with Pharmacists.
                                       development in Europe, December 2009
                                                                                 For details, visit: www.mce-ama.com/2327.

                                                                                 From licensing to mergers and acquisition (M&A), major
     From licensing to mergers and acquisition (M&A), major                      opportunities may open up to Biotech companies who consider
     opportunities may open up to Biotech companies that consider                alliances or other forms of collaboration as possibly winning
     alliances or other forms of collaboration as possible winning               solutions. MCE has a broad range of open enrolment workshops
     solutions. So, more than ever before, the industry is taking a              that will provide you with invaluable insight when considering
                                                                                 various forms of solution. For example:
     close look at Biotech companies.
                                                                                 If you already know the negotiation basics but would like to
                                                                                 improve your results by taking your negotiation skills to the next
                                                                                 level, register to:
                                                                                 Advanced Negotiation Skills
                                                                                 www.mce-ama.com/781
                                                                                 Managing R&D through Effective Collaborations and
                                                                                 Partnerships in Pharma
                                                                                 www.mce-ama.com/2256
                                                                                 Managing Strategic Alliances and Partnerships
                                                                                 www.mce-ama.com/2247
                                                                                 Mergers and Acquisitions 1: Valuation of Companies and Due
                                                                                 Diligence
                                                                                 www.mce-ama.com/782
                                                                                 Leadership Post-M&A: Striving for Successful New PharmaCo
                                                                                 www.mce-ama.com/2316




14   The Executive Issue 37 | 2011
                                                                                                          Biotech and Pharmaceuticals




Biotech in Europe: The fight for innovation must continue

                                                                          How MCE’s Custom-Made Solutions Can Make
Despite their difficulties in financing growth, much of the
                                                                      Things Happen for Companies and Management Teams
innovation that is happening in the pharmaceutical world takes        At MCE, we develop your people’s leadership to get your strategy
place in biotechnology companies. Biotech innovations also            executed. With our network of MCE Associates, who have broad
move forward the progress of medical science.                         and senior international experience in the Pharmaceutical
                                                                      industry, we can help your company solve problems around your
So, even though money may be in short supply today, Biotech           strategy implementation.

companies have no choice but to reinvent themselves by:
                                                                      MCE’s Custom-Made Solutions and Workshops are concrete and
•	 Becoming more focused on projects with the highest
                                                                      practical.They lead to tangible results and benefits to your organization.
   potential and probability of completion                            We can come to your company to help your management understand
•	 Developing these programs to respond to the future demands         what the changes in the pharmaceutical environment mean for you
   of the market                                                      and the implementation of your strategies.
•	 Improving development efficiency and business insight
•	 Thinking and materializing new forms of collaboration with Big     For more information, please contact Patrick Faniel, Director of
                                                                      Custom-Made Solutions at +32 (0)2 543 21 20 or by mail at
   Pharma and perhaps other SMEs in the pharmaceutical realm.
                                                                      pfaniel@mce-ama.com.




For more information and registration, please visit www.mce-ama.com                                                                                15
     Pharmaceutical Industry: OTC




     OTC: More Opportunities for Pharma



     There are unprecedented changes in the OTC industry. Which type of
     company is in the best position to make the opportunities pay off?
     A few years ago, the OTC (over-the-counter medications) business was on sale. Some fast-
     moving consumer goods (FMCG) companies hoped that pharmaceutical companies would
     soon be ready to sell their OTC business. A number of big transactions did happen, and FMCG
     players began to be more active in the OTC business. At the same time, several pharmaceutical
     companies decided to keep their OTC business and actually strengthen it further. They were
     seriously interested in building three key businesses: RX, OTC, and Generics.


     It is now clear who the main                                      this makes for a very complex OTC picture. But availability in
     players are                                                       the mass market is clearly evolving. In country after country,
     Today, the key players in the OTC industry are now in place.      regulations are changing to allow wider access. Retailers,
     Some of them are FMCG companies, and some pharmaceuticals.        governments and consumers are pushing in this direction for
     But they are now all interested in growing their OTC business.    various reasons.
     And the competition is fierce.
                                                                       New challenges for traditional pharma
     Traditionally, OTC was part of a pharmaceutical company,          Selling through large retailers presents a new range of
     but it was seldom one of the core elements. In many cases,        challenges for traditional pharmaceutical companies: many of
     OTC was only thought of as a good opportunity to generate         them lack know-how in dealing with this channel. For the FMCG
     cash to fill the increasingly empty pipeline. The pharma          companies this is an area of competitive advantage.
     companies were selling products that were increasingly
     commoditized. And they were dealing with a powerful trade         More availability of own label products
     that was eroding their margins. They wanted to specialize in      As a result of wider access, own-label products have started
     more differentiated products that were sold mostly via a less     appearing on the shelves. This turns key OTC categories into
     powerful channel.                                                 commodities. And, it puts pressure on the margins of the
                                                                       branded OTC product manufacturers. This phenomenon is
     Wider access is on its way                                        bound to grow.
     What is OTC in one country may not be classified as OTC in
     another. In many countries, OTC products are still sold only in
     pharmacies. Along with different regulations in each country,
     there are different prices, reimbursement amounts, etc. All of




16   The Executive Issue 37 | 2011
                                                                                                        Pharmaceutical Industry: OTC




Price liberalization and declining product
reimbursement
With healthcare costs on the rise, governments tend to reduce
their contribution to the OTC purchase. Pricing constraints are
also being relaxed in the expectation that increased competition
will drive prices down.

Dry pipeline
The poor pipeline, a well-known challenge for the pharmaceutical
industry (see: www.mce-ama.com/pharma2011), has a clear
secondary effect on the OTC industry. An OTC product is an ex-                How MCE can help you
Rx product that has been switched. This is balanced by the stricter       MCE has found that there are many parallels between what is
                                                                          happening in the Health Care-Pharmaceutical-OTC industries and
regulations for active ingredients registration that are now in place.    what is happening in the larger consumer markets and retailing
This is yet another challenge. For the FMCG companies that lack           industry. As a result, we include insights and best practices
considerable R+D capabilities, it is probably an even bigger challenge.   from Consumer Markets—when appropriate—in custom-made
                                                                          solutions for the Pharma and Healthcare industries.

Internationalization of the OTC brands                                    MCE’s Senior Associates can also help you in dealing with the
                                                                          people issues that naturally arise when you adapt your strategy
In the past, OTC brand products were mostly local and regional.
                                                                          to focus on consumer markets. Our Senior Associates all have
In the future, we can expect to see more international OTC                more than 20 years of business experience at the top levels
brands, at least in terms of standard packaging and supply                of organizations in your industry. They will work with you to
                                                                          identify the problems your company is having as it moves from
chain integration. This will happen as bigger, stronger and more          one business model to a new one. And, they will help guide you
international players take to the stage.                                  through the impacts these changes will have for all parts of your
                                                                          organization.

                                                                          Contact Patrick Faniel, our Director of Custom-Made Solutions,
The OTC industry is increasingly                                          and let us show you how we can put together and roll out a
moving towards the FMCG                                                   programme that answers your specific needs.
                                                                          Director Custom-Made Solutions
industry. Yet, the similarities to the                                    Tel: +32 2 543 21 20
                                                                          Email: Patrick.Faniel@mce-ama.com
pharmaceutical industry cannot
be dismissed or ignored without                                           To develop individual managers who are or will soon be working
                                                                          on OTC projects, MCE has developed the following workshops.
serious consequences.                                                     They address issues and challenges you may be experiencing:
                                                                          OTCs: Fundamentals of Patient and Consumer Marketing
                                                                          Communications helps managers in your company, subsidiary or
                                                                          division meet the challenges of an OTC market. For details, visit:
                                                                          www.mce-ama.com/2318.
 What’s happening in Consumer
 Markets?                                                                 To help your distribution and sales teams work effectively with
 To read more about what is happening in Consumer Markets and             pharmacists, MCE has developed the open enrolment workshop,
 how MCE can help your company develop skills and knowledge               OTCs: Distributing to and Managing Sales with Pharmacists.
                                                                          For details, go to: www.mce-ama.com/2327.
 related to retail customers, please visit:
 www.mce-ama.com/B2C2011




For more information and registration, please visit www.mce-ama.com                                                                            17
     Pharmaceutical Industry: OTC




     So, is the OTC industry closer to the                                  How MCE Works with Customers
     Rx or to the FMCG world?
     Every industry needs to clearly understand who is the key              Roche: Service, Quality and Safety
     decision-maker in buying or consuming its products/services.
                                                                            Recently, Roche focused its attention on how to provide the best
     In the case of the OTC industry, the decision maker is the final       customer service and quality at competitive cost, while maintaining
     consumer. It is not, for example, the doctor who – in the case         the highest level of patient safety. To read about what they did,
     of the pharmaceutical industry – decides and prescribes which          visit: www.mce-ama.com/case_studies.

     product to use. In this sense, it can be argued that the OTC
     industry is closer to FMCG. An OTC company needs to make
     sure that it builds a deep and thorough consumer understanding,
     puts in place “above-the-line” advertising programs, and                       OTC: Closer to RX or to FMCG?
     actively manages the trade channels where the final consumer                                                 RX          OTC         FMCG
     shops, through category management programs, etc. All these
                                                                           Regulatory affairs                      ✔
     are skills and capabilities that a traditional FMCG company
                                                                           Relationship with authorities           ✔
     already has in place.
                                                                           Professional Endorsement                ✔
     Role of traditional pharma skills                                     People                                              ✔
     However, what cannot be ignored is how an OTC product                 Consumer understanding                                           ✔
     and brand is born and what makes it a differentiated entity
                                                                           Media manage                                                     ✔
     afterwards. Switch management and registration, relationship
     with regulatory and state authorities, professional endorsement       Trade Channel management                                         ✔

     and key opinion leader management. These are skills and
     capabilities that a traditional pharmaceutical company already
     has in place.

     Price competition and private label                                      Cosmeceuticals: A new OTC
     In the final analysis, the OTC industry is increasingly moving           revenue stream
                                                                              A new product category in the OTC business is cosmeceuticals
     towards the FMCG industry. This is partly because of increased           – cosmetic products with pharmaceutical elements. Like
     liberalization that allows wider access, invites price competition       cosmetics, cosmeceuticals are applied to the skin. But they
     and strengthens the phenomenon of private label products. But,           contain ingredients that influence the biological function of the
     the similarities of the OTC industry to the pharmaceutical industry      skin. They improve appearance by delivering nutrients needed for
                                                                              healthy skin.
     cannot be dismissed or ignored without serious consequences.             Cosmeceuticals are the fastest-growing segment of the
                                                                              natural personal care industry. An ageing population that
                                                                              places a high value on a youthful appearance is driving growth
                                                                              in this market. Although cosmetics and cosmeceuticals are
                                                                              tested for safety, they are not subject to the same review and
                                                                              regulations as medications. On the other hand, manufacturers
                                                                              of cosmeceuticals may not claim that the product has drug-like
                                                                              or therapeutic effects. For cosmetic labels, no division between
                                                                              active ingredients and other ingredients is required. They are all
                                                                              listed together.




18   The Executive Issue 37 | 2011
                                                                                                    Pharmaceutical Industry: OTC




Challenges and opportunities for the
OTC manager: The “dual citizenship”
Middle and senior OTC managers are in a painful spot – between
the world of Rx and the world of FMCG. They have always
been there but today, more than ever, they need to retain and
further improve their skills and have a very good grasp of the
fundamentals of both worlds.


They need to understand that both worlds have key skills to
offer, including the following:
        •	 The FMCG world shows how you can understand
           and persuade the final consumer. Consumer
           research capabilities leading to thorough consumer
           understanding, management of mass media leading to
           effective above-the-line support programs, and know-
           how of trade channel management leading to better
           in-store presence are end result conditions of today’s
           modern OTC management.
        •	 The Rx world shows how to manage the brand with a
           long-term view. Instead of looking at the sales for this
           month, the Rx world is conditioned to taking steps of       Customized Development
           a less tactical nature. The brand is usually first seeded   Solutions in OTC
           via professional endorsement, and key opinion leader
           management. Then, a new source of further sales             If you are involved in:
                                                                       • Moving marketing, sales and medical affairs/education to the
           normally comes not through product upgrade…but                  next level
           through product “up-claim”. In other words, the same        • Revamping your R&D strategies to leverage new opportunities
                                                                       • Aligning manufacturing with your new business model
           product continues to be marketed but with stronger
                                                                       • Introducing innovation across your services and not just your
           claims stemming from new clinical studies, etc.                 products

                                                                       …MCE can help you.
Although being in the middle is a challenging place to be,
the OTC managers who realize the importance of their “dual             Our Senior Associates all have more than 20 years of business
citizenship” can be instrumental in leading their companies            experience at the top levels of organizations in your industry.
                                                                       They will work with you to identify the problems your company
to great success. Today, there are many brands that are very           is having as it moves from one business model to a new one. And,
successful. Their initial seeding according to the Rx best             they will help guide you through the impacts these changes will
practices is later coupled with a strong mass marketing muscle.        have for all parts of your organization.

These brands have created “blue oceans”, that are difficult to         Contact Patrick Faniel, our Director of Custom-Made Solutions,
replicate and make the competition irrelevant.                         and let us show you how we can put together and roll out a
                                                                       programme that answers your specific needs.
                                                                       Director Custom-Made Solutions
This is now the new land of opportunity for the OTC industry. A        Tel: +32 2 543 21 20
passport of “dual citizenship” will take the forward-looking OTC       Email: Patrick.Faniel@mce-ama.com
managers there.                                                        For Individual Managers
                                                                       Managers in all functional areas will need additional knowledge
                                                                       and skills to be successful in working in consumer markets. MCE
                                                                       invites functional managers in your company to participate in our
                                                                       open enrolment workshop, Generics Markets and Big Pharma:
                                                                       Pure Player Going Hybrid? Old Models in New markets? For
                                                                       details, please visit: www.mce-ama.com/2315.



For more information and registration, please visit www.mce-ama.com                                                                        19

								
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