VIEWS: 7 PAGES: 2 CATEGORY: Medicine POSTED ON: 6/5/2010
PPM is good at providing retrospective insight, but to use it solely for that purpose is to ignore its most powerful capabilities. PPM has evolved considerably during the last few years; it can now accurately identify and manage the most promising R&D projects from the initial-idea stage. It can even be used to generate those ideas by looking at therapeutic areas, competitors' pipelines and general market research. This represents a fundamental new way of thinking in the pharmaceutical industry.
PORTFOLIO MANAGEMENT KILL OR CURE PORTFOLIO MANAGEMENT David Munt, Managing Director, The GenSight Group suggests why the pharmaceutical I industry needs to rethink its approach to project portfolio management. n 1993 Henry Mintzberg authored from 1977 to 1995 the number of clinical trials required a book entitled The Rise and Fall of to bring a new drug to market doubled, and the number of Strategic Planning.1 A year later, he patients involved in those trials nearly tripled.3 It can now penned a Harvard Business Review take 16 years to complete FDA-regulated development, (HBR) article with the same name.2 In testing and review processes. both, Mintzberg argued that so-called ‘strategic Given today’s market conditions, PPM is a particularly planning’ was hindering strategic thinking. good tool to ensure that limited budgets and resources The tendency to analyse and extrapolate are focused on the ‘right’ projects and that failures are data from the past was misleading minimized. Although PPM tools are widely used across the managers into thinking they were industry, they are primarily used retrospectively, to record working to improve future performance, project progress and communicate decisions taken, rather when in fact they were doing anything but. than as a tool to inform strategic decisions about where to Fast-forward a decade and a half, and the invest time and resources. pharmaceutical industry should collectively head to Amazon.com or the HBR archives. A New Way of Thinking PPM is good at providing retrospective insight, but to use The Perfect Storm it solely for that purpose is to ignore its most powerful The industry is facing a crisis that some industry watchers capabilities. PPM has evolved considerably during the last have called the ‘perfect storm’: falling stock prices, downward few years; it can now accurately identify and manage the pressure on drug prices, less capital to invest in R&D, the most promising R&D projects from the initial-idea stage. imminent expiration of a number of blockbuster patents and It can even be used to generate those ideas by looking at References the resulting flood of cheaper generic alternatives. In the face therapeutic areas, competitors’ pipelines and general market 1. H. Mintzberg, The Rise and Fall of Strategic of these challenges, the industry urgently needs to produce research. This represents a fundamental new way of thinking Planning, 1993. new strategies to ensure a strong and sustainable product in the pharmaceutical industry. Ask the average industry www
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