Rising From The Ashes With Accelerating Urgency

By Rob Wright, Chief Editor, Life Science Leader
Follow Me On Twitter @RfwrightLSL

By  Rob Wright

This year’s Partnerships in Clinical Trials trade show was appropriately held at the Phoenix Convention Center in Arizona. I say appropriate because the pharmaceutical industry is at a point of renewal and change, similar to the phoenix. Record temperatures were recorded outside, and I participated in some hot discussions inside. This year’s event had an overall tone of accelerating urgency. To be sure, the pending patent cliff is one of the drivers behind this change. But, it is not the only driver. The other component which is driving this sense of urgency is the BRIC (Brazil, Russia, India, and China) emerging markets with China and India dominating the discussions. Other themes discussed at the show included collaboration and innovation. I had the opportunity to meet with a variety of industry leaders from pharmaceutical/biotechnology companies as well as CROs.

John Hubbard, Pfizer’s SVP worldwide head of development operations, set the tone for accelerating urgency in his opening remarks, analogizing the pending patent cliff to the Mayan calendar, which predicts the end of the world in 2012. I met with Hubbard the following morning. We discussed the closing of the Pfizer (NYSE: PFE) Sandwich United Kingdom R&D facility. He told me that the industry has passed the tipping point with regard to outsourced R&D drug discovery as a nicety, to now being a necessity if the industry is to survive and thrive. There is still going to be in-house drug discovery, but partnering is going to continue to play an increasingly important role according to Hubbard. Mark Goldberg, COO with Parexel (NASDAQ: PRXL), echoed Hubbard’s assessment. In my meeting with Goldberg, we discussed how the role of the CRO has evolved from being reactive to proactive. Goldberg described how the CRO industry evolved. Initially, CROs were very reactionary in nature, because they manifested from the industry’s need for additional research capacity. Sponsors would be conducting studies, and at a certain point, would employ the services of a CRO to assist in conducting some of the research, with the study’s design already formalized. Goldberg has seen this transition to more of a proactive approach, with CROs being involved from the very early phases of R&D. What he revealed to me was not even he could have anticipated the continued accelerating speed at which this change is taking place.

The Avoca group presented research which supported Goldberg’s assertion of CROs needing to be more proactive. In their presentation and subsequent roundtable discussion, the Avoca group revealed how data gather from both sponsors and providers revealed several key findings. Sponsors had a higher degree of satisfaction with their CROs when a written quality agreement was utilized between parties. Additionally, sponsors were more satisfied with CROs which were proactive in addressing quality initiatives. Lastly, there is about a 30% gap between satisfaction measures between the two sides. Providers were about 90% satisfied they had achieved the desired outcome, while sponsors were satisfied 62% of the time. To me, this indicates a disconnect between the two sides. That being said, both sponsors and providers have been taking proactive approaches to addressing some of these issues. For example, Jeffrey Kasher, VP and COO with Eli Lilly (NYSE: LLY), described how his company “got religion” about quality, developing standardized quality measures with their CROs. The interesting thing is not that it was done, but how. Lilly facilitated a meeting with three competing CROs to establish agreed upon quality standards by which all parties would abide. CROs have been proactive as well. Several companies, known for being fierce competitors, established a taskforce around developing and sharing best practices. I had the opportunity to meet with several members of this task force, including representatives from Chiltern, PRA, ICON (NASDAQ: ICLR), and CRF Health. Steve Powell, SVP of clinical informatics and late phase services at PRA, and Gregg Jewett, senior director strategic alliances and partnerships at CRF Health shared their visions on some of the outcomes they hope to achieve from this collaboration. One outcome, which has already been achieved, is the successful implementation of a free educational webinar series on ePRO best practices.

Two presentations I thoroughly enjoyed were by Vijay Govindarajan, co-author of The Other Side of Innovation: Solving the Execution Challenge and Dan Heath, co-author of Switch. Govindarajan explained that for innovation to truly occur, companies need to focus on “next practices” instead of best practices. To make his point on how not to do it, he cited Ford’s first attempt at entering India’s automobile market. Companies cannot take a U.S. best practice model and tweak it to work elsewhere. He cited Grameen Bank, founded by Bandladeshi economist Professor Muhammad Yunus, as example of how doing the opposite of best practices employed by commercial banks became the foundation for Grameen’s success in creating the microfinance industry. Govindarajan stated that innovations are going to occur in emerging markets and will revolutionize the United States, not the other way around.

After a full day of sessions, walking the show floor, and conducting personal interviews and videos with various CEOs and company presidents, I looked forward to relaxing and not taking any notes during Dan’s Heath’s presentation. But it was so good. Halfway through, I began jotting down notes on the back of a flyer I found lying on the table where I was sitting. Two of his quotes worth sharing are, “If you really want change, failure is part of the deal,” and “To do something great requires great struggle.” According to Heath, feeling is the fuel of change, and the best way to achieve this is to “shape the path” in which you want change to occur.

My takeaway from this event is our industry is actively shaping the path. This “phoenix” of change will require both CROs and sponsors to have increased focus on quality, innovation, collaboration, quality, and communication. In addition, Emerging markets  — China and India in particular, will play a pivotal role in the process of this pharmaceutical industrial re-evolution.