Differences among Pharmaceutical Companies
The best person to decide what research work shall be done is the man who is doing the research, and the next best person is the head of the department, who knows all about the subject and the work; after that you leave the field of the best people and start on increasingly worse groups, the first of these being the research director, who is probably wrong more than half the time; then a committee, which is wrong most of the time; and, finally a committee of vicepresidents, which is wrong all the time.
–C.E.K. Mees. Former head of research at Eastman Kodak Company. Quoted by Pelz and Andrews.
My way of doing business was never entirely scientific, but I think the emotional, dramatic kind of manager can hold his own with a scientific manager.
–Thomas Watson, Jr., former chief executive of IBM. From Fortune.
INSTITUTIONAL CULTURE
Background
Within any company, there are many philosophical and other differences concerning the methods that are the most efficient, most ethical, most practical, and most cost-effective for developing drugs. It is a happy but rare occasion when there is total agreement among all managers about how to develop even a single drug.
This issue becomes more complex when a company is simultaneously developing a particular drug in two or more countries. This is especially relevant if the company is not run as a centralized “dictatorship,” and each company site running a development program for the drug has a voice in the decision-making process. There are a number of issues that are generally addressed differently in various countries, and these differences often place strains on any unified development plan. Differences
within a company are usually a reflection of the types of differences that also exist between companies.
within a company are usually a reflection of the types of differences that also exist between companies.
Although many of these differences are discussed throughout the book, some overall areas where differences exist are reviewed in this chapter.
Company Culture
A company’s culture is a living and dynamic process that often changes when new leaders are promoted from within, or brought into a company from elsewhere to help move it in a certain direction. Such changes may indicate a change in policy to employees. Leaders impose their ideas and style on how they want the company to operate and to be viewed by both internal staff and the external world. Companies vary greatly along the continuum of multiple cultural scales and factors. These scales include paternalism, benefits, personality and values of employees hired and promoted, ability for certain staff to spend time outside the company participating in activities of professional societies, time allowed for certain staff to spend on activities of the trade associations the company is a member of, and so forth.
While a company’s officers generally choose the way they want the corporate culture to be developed and maintained, they may wish to take periodic soundings to assess the culture. This practice can help ensure that others see the company the same way that they do, and can be accomplished through many techniques varying from informal conversations to formal evaluations or surveys conducted by a vendor hired for this purpose. There is, unfortunately, often one company, culture, or image that is widely promulgated and appears in the annual reports and newsletters in some companies, but this does not always match the culture that is supported and actually is in place. One example is that many companies speak about innovation, or emphasize the importance of patients they are trying to help, but in reality scientists are not allowed to fail more than once in trying to learn about an area they are researching or to test a hypothesis, and drugs that would truly help many patients are often not developed if the estimated sales projections do not meet the company’s hurdle rates. Moreover, these drugs are often not licensed to other companies that would want to develop them.
Positive cultural attributes, behavioral adherence to the purported cultural values, as well as a vibrant institutional memory, can help build staff dedication and loyalty by motivating employees and can be used as a significant tool for recruiting new employees. Investors and the stock market press value a dedicated and loyal workforce.
The culture of a pharmaceutical company influences the approaches used in drug development. A highly conservative approach to drug development is where each major question that could be raised by a regulatory agency has been studied and discussed. A less conservative approach could be to conduct a minimal number of studies and to assemble a lean New Drug Application in terms of quantity of data. Proponents of the lean approach hope that various potential issues about the drug are not raised and that the quantity of data submitted will be sufficient to obtain regulatory approval. Other aspects of the impact of a company’s culture on drug development relate to whether a company is prone to challenge the Food and Drug Administration (FDA) requests for additional data or whether the company accepts FDA requests without comment. Some companies attempt to achieve a close “alliance” with the FDA on a drug’s development from the time the initial plan is formulated through each stage of its development.
Organizational Levels at Which to View Culture
Culture may be viewed on at least three separate levels. The first level is the overall company level, where one may focus on aspects that distinguish each company. These include the internal company environments, traditions, values, image, and reputation, plus the personalities and style of the most senior leaders. Cultures might differ in the relative influence of marketing and research and development (R and D) in major decisions made about identifying therapeutic areas to research and specific drugs to develop and prioritize. Either marketing or R and D might have a major role in establishing the company’s goals and objectives.
The second level is that of the entire function (e.g., R and D, marketing, or production). This level of culture depends on the same aspects as the corporate level plus the nature of the present staff and the most senior manager or leader and the characteristics of the specific function.
The third level relates to the specific people with whom each worker directly interacts in his or her daily activities. This level of culture depends on all of the above-noted factors plus the specific attributes and environment of the person or group involved and those with whom they interact.
Knowledge of a company’s culture is essential. It allows people to know (a) who to go to when you want things done, (b) where the real power lies, (c) what types of comments or constructive criticisms can be made, and (d) how to build a consensus in achieving one’s objectives. It allows people to function more effectively in their various roles.
INSTITUTIONAL MANAGEMENT
Major differences between pharmaceutical companies exist at all levels and in all disciplines in terms of company management. The subject areas in which significant differences between companies occur are discussed in almost every chapter of this book, particularly those focusing on management styles, concepts, golden rules, and keys for success. No further elucidation is deemed necessary here, except to summarize a few differences in management philosophy (Table 30.1) and a few differences in general development philosophy (Table 30.2).
ATTITUDES AND APPROACHES TOWARD DRUG DISCOVERY AND DEVELOPMENT
Factors Influencing Attitudes toward Drug Development
Widely differing attitudes toward drug development exist both within and between companies. One scale along which attitudes vary is from optimistic, positive, and enthusiastic at one end of the spectrum to pessimistic, negative, and discouraged at the opposite pole. Factors that affect attitudes of managers and employees include the (a) number of medically and commercially exciting drugs in the development pipeline, (b) opportunities for career advancement and enhancement, (c) working conditions, (d) attitudes
of superiors, (e) attitudes of top management, (f) financial health of the company, (g) personalities of the people involved, and (h) overall trends of the company’s performance. Sometimes, the ability to make a real impact on patients’ lives also makes a difference here. At Orphan Medical, virtually all staff put up with long hours, low pay, simple surroundings, etc. because the people who joined the company were those who believed in the company’s mission, which had a large altruistic streak. Employees believed that if we did not develop the drug then no one would and the patients who benefited would not otherwise receive important drugs to treat their condition. Seven drugs were brought to market in the company’s first five years of existence.
of superiors, (e) attitudes of top management, (f) financial health of the company, (g) personalities of the people involved, and (h) overall trends of the company’s performance. Sometimes, the ability to make a real impact on patients’ lives also makes a difference here. At Orphan Medical, virtually all staff put up with long hours, low pay, simple surroundings, etc. because the people who joined the company were those who believed in the company’s mission, which had a large altruistic streak. Employees believed that if we did not develop the drug then no one would and the patients who benefited would not otherwise receive important drugs to treat their condition. Seven drugs were brought to market in the company’s first five years of existence.
Table 30.1 Selected differences in management philosophy between companies or between individuals within companies | ||||||||||
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Table 30.2 Selected differences in drug development philosophy between companies or between individuals within companies | ||||||||||||||
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Company Style
The style that is generally used to develop drugs differs between different companies. The choice of a company’s style is usually a reflection of the personality of the most senior manager or group of managers. Some may emphasize pharmacokinetic studies or mechanism of action studies or have a desire to explore many different indications for each drug. Other aspects of style relate to the degree of caution or risk usually taken. Differences may exist in different businesses or divisions of a company because of differences between the managers that direct each. In large companies, the Chief Executive Officer needs a strong personality to influence the entire company. This may be accomplished in many different ways ranging from large group meetings with hoopla to quiet sessions with one or a few individuals.
Building Areas of Strength versus Areas of Weakness in a Company
Many approaches to developing drugs within a company depend on how the company perceives its own strengths and weaknesses. Marked differences between companies are often based on the relative strengths in different therapeutic areas and whether the therapeutic areas represent growing, mature, or dying areas for future drug development (Fig. 30.1). A method to illustrate the susceptibility of companies to competition from generic substitution is shown in Fig. 30.2 and the susceptibility of a single company over a period of years is shown in Fig. 30.3. In Fig. 30.2, each company’s position is indicated by a single point on a grid of estimated future sales of new products over an arbitrarily chosen number of years versus estimated future sales losses of current products over the same period because of competition from generic drugs.
There are proponents in each company who strongly espouse the view of building on the company’s strengths and core competencies in a given therapeutic area. A great deal of common sense underlies this proposal, and this approach is often essential for companies to follow if they wish to remain viable. Nonetheless, there is a danger that if a company concentrates all of its efforts and resources on building its strengths, the company may become too narrow in its focus. This, in turn, could make it more vulnerable to competitive forces. Building up highly selected areas of weakness is also important if those areas have been targeted as future areas of strength. This pendulum must be continually balanced because a company that becomes too diversified also becomes vulnerable to its competitors. The most appropriate balance between building on strengths versus developing weaknesses changes over the years and must be continually reassessed.
Approaches to Drug Discovery and Development at Various Companies
Using Visual Models to Develop an Overall Concept of Drug Development
If several companies each discovered or licensed the same drug, they would each develop it in a somewhat different manner. The basic approaches to development would differ as to the number of indications to pursue, whether to conduct them simultaneously or sequentially, how to prioritize each of them, and how much resource to assign to each. The same would be true for determining the number of dosage forms and routes of administration to
pursue and whether to pursue them simultaneously or sequentially. Differences between companies might emanate from sources within R and D marketing, or both groups.
pursue and whether to pursue them simultaneously or sequentially. Differences between companies might emanate from sources within R and D marketing, or both groups.
 Figure 30.1 Characterizing the marketing position of a specific company. The size of the circle is proportional to the relative size of sales. CNS, central nervous system. |
 Figure 30.2 Susceptibility of various pharmaceutical companies to generic substitution. This factor varies for different companies at a specific point in time. Those below the line are more susceptible than those above the line. |
 Figure 30.3 Susceptibility of a particular company to generic substitution over a period of years. |
It is desirable for a company to choose an overall concept for a drug’s development before development is actually initiated. One method to do this is to discuss a drug’s development in terms of a visual model. This would enable each manager to have the same mental image of how the drug’s strategy will be applied to its development. Figure 30.4 illustrates general types of approaches that may be followed to develop a new drug. The width of each figure is proportional to the total number of dosage forms, indications, routes of administration, and dosage regimens. These figures may serve as a frame of reference when planning the development of a new drug and are described in more detail in Chapter 115 of Guide to Clinical Trials (Spilker 1991). Most pharmaceutical companies focus on reviewing and refining the plan that is proposed for a drug’s development. This is appropriate to consider after a general concept is adopted.
Allocation of Resources
In terms of how each specific indication of a drug would be developed, one of the major differences between companies would be the amount of resources applied. Some companies have adopted the strategy of applying a large quantity of resources to a few drug development projects; in recent years, however, more companies have attempted to mitigate risk by applying fewer resources to a large number of projects and have them compete for resources. Nonetheless, at least one major company attempts to fully resource all projects in their portfolio. The general procedures used to plan, monitor, and manage the development process have become rather standardized and are generally similar among companies. Nonetheless, some companies are more efficient than others in how well they conduct their development activities.
Another consideration concerning the allocation of resources relates to the amount of risk that a company is willing to take (see Chapter 21). High-risk projects often take more time and require more resources than do low-risk projects before a decision point is reached. One example involves the use of gene therapies to treat patients with genetic defects attributed to a single gene.
Setting and Using Target Dates
Attitudes toward target dates for completion of defined drug development activities are generally viewed similarly in production plants at most companies where schedules are adhered to as closely as possible. The same approach occurs in most technical development laboratories. Attitudes about target dates, however, differ at various companies in research, medical, and marketing departments. At some companies, dates are used in some of these departments as a means of hiring staff, establishing work schedules, and assigning responsibilities. At other companies, dates are considered as convenient targets and as a guide to help plan work. Dates may be established for completing project activities using knowledge of other conflicting project work going on or to be conducted in the same department. Alternatively, dates may be set independently of any other project work. It makes most sense to use the former method (i.e., consider other projects) as the other approach of setting dates independently represents an ideal case and will make dates of little practical use. A few companies place so much stress on achieving target dates that the quality of work produced or reports written is sometimes, or even often, compromised. There are many advantages to gain by allowing some slippage in dates if a better output from the responsible department is attained. Figure 30.5 illustrates three types of target dates that may be established for achieving a milestone, and Table 30.3 lists the various types of milestones that are used in drug development.
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