Pharmaceutical Executive Europe - April 2007 - (Page 11)

Survival Tactics Dr Brian D. Smith looks at what a changing pharmaceutical market implies for the career development of pharmaceutical marketers. hrinking growth rates, thinner pipelines, price controls and declining industry reputation all point to the fact that the pharmaceutical industry is changing. The research-based business model that has served us well since the Second World War is becoming outmoded and ill-fitting for the 21st century. Scientists are no longer coming up with new molecules, each a quantum leap beyond the efficacy of its predecessor. Governments and payors are no longer willing to pay for advances that cost more than they benefit. We risk entering a world in which all but the most exotic therapies are commoditized. In commodity markets, the marketers are few, poorly paid and poorly resourced by the standards of the early 21st century pharmaceutical market. The question for pharmaceutical marketers is how to survive in this new world. The answer is complex and will be unwelcome to some in our industry, but it is provided by the experiences of many other industries in other eras of management research. S A maturing market The first thing to understand is what, exactly, is happening to our industry. From the perspective of an industry insider, the changes mentioned above may seem unprecedented and unique to the pharmaceutical sector, but in fact many sectors have seen the same pattern of events. Financial services, for www.pharmexec.europecom instance, have had price controls imposed upon them. The electronics and automotive industries had to make the transition away from product-led competition when their own scientists and engineers started to plateau. The defence industry provided the model for governments seeking cost-effectiveness, as the phrase ‘bang for bucks’ reminds us. These industries, as management researchers have proven, all succumbed to the pressure of changes in the industry life cycle curve, the aggregate of all the product life cycles in the sector. The ‘industry life cycle curve’ explains how whole industries pass through embryonic, growth, mature and decline phases, and is well supported by many years of research evidence (even when the famous Igor Ansoff described it in his seminal 1965 text, Corporate Strategy, the concept of ‘industry life cycle’ was already many years old). When applied to pharmaceuticals, it clarifies what is happening in our market. In simple terms, after an unusually long period of growth, the pharmaceutical business is maturing. Once we accept that, we can better understand what will happen next in our business and how pharmaceutical marketers might adapt to preserve both their profits and their careers. According to the industry life cycle model, when markets mature the basis of competition in that industry evolves. At the embryonic phase, it is 11

Table of Contents for the Digital Edition of Pharmaceutical Executive Europe - April 2007

From the Editor
The Cycle of Success
Survival Tactics
Career Connections
Bringing Out the Best
Learning the Fast Way
Business Class
Simulation Training

Pharmaceutical Executive Europe - April 2007