Home - News - Manufacturing Chemist

Manufacturing Chemist

Both of these factors have forced drug companies, whose positions in the marketplace were once seen as unassailable, to become ruthlessly focused on reducing the cost and time of drug research and development cycles as a business necessity. Certainly, no research-based pharma can survive on the low returns to be gained from generic replacements. A long-term sustainable business plan needs to have a balanced risk portfolio of New Chemical Entities with blockbuster potential (i.e. minimum sales of $1bn), Product Life Extensions to maintain the value of the blockbuster beyond the initial patent expiry and some contribution from generics to guarantee survival.

You don't have to look far to see why profits are under pressure. GSK have lost two megasellers to generic drugs since mid 2003: Paxil anti-depressant paroxetine and Augumentin - amoxycillin/clavulanate. The anti-depressant Wellbutrin could well go the same way; the result is low single digit growth.

What else can they do? They all look for more efficiency from the R&D process and initiatives in metrics and reorganisations (team based working, therapeutic area focus etc) have become commonplace.

So, if you ask any company whether they invest in IT there will be an emphatic 'yes'. However, probe a little deeper and it becomes clear that the handling of experimental data has been the main application of IT in speeding the throughput of R&D towards regulatory approvals. The end goal so far has been that an underlying recognition that a 'fail early, fail cheap' mentality must be the order of the day. Coupled with the use of IT in this way has been the adoption of other operational industry wide quality initiatives to improve the operational procedures such as Process Analytical Technology.

The Missing Link - The Management Team

However, there is one significant area of a drug company that has not yet seen the benefits of a focused IT solution, namely, the management team. And no matter what the scientific investment in IT, it is ultimately the decisions made by this group that will dictate the long-term viability of the business.

So why is it that this group have been so poorly served by IT when there appears to be plenty of so-called heavyweight solutions around and much investment has been made in them?. The answer is that such tools have traditionally focused on capturing and filtering volume information that has then lead to copious amounts of analytical reporting.

While there is a place for such systems, their very nature means that they take a long time to bed-in and importantly have failed to deliver the promised Return on Investment (ROI) in anything like a reasonable time frame. More worryingly, there is a feeling that management have reached information overload from the outputs of such systems. What started as a support tool has quickly become a burden.

What the management team desperately need is a new generation support tool that will provide a focused vision about how their cost base is being used, whether they have matched.

Developing a Focused Team

But of paramount importance is the need for such tools to bring together the management team 'on the same page', so that from senior down to junior management there is a consistency of understanding about the company objectives.

In the end it's about providing tools that support and enhance the management discipline so that decisions are made quickly and the 'fail early, fail cheap' mentality is applied at the business level as well as the operational level.

Where Are The Support Tools?

So, if we know what type of tools we need, where are they? Well, they are few and far between. However, at least one company, Atlantic Global Plc, a Bradford (U.K.) based supplier of business and resource management products, has come up with a solution. They have used their experience of providing pragmatic solutions to a range of blue-chip customers to look at the challenges faced by management teams. And, in partnership with major multi-national companies they have developed a web-based product called Corporate Vision. Put simply, this product delivers the capability to transform the way the management team understands its objectives and delivers against them. It does this by providing a very clear focus on the key elements that improve overall management performance, namely:

• Budgeting - in converting static budgets into a dynamic flexible living plan
• Demand & Supply Resourcing - by balancing resource levels across the entire organization
• Portfolio Management - providing a consolidated picture of resource & expenditure costs throughout the organisational hierarchy
• Milestone Tracking - whether marrying the strategic to the operational to provide advanced decision- making or, defining personal bonus-related milestones to improve accountability
• Scenario Modelling - delivering powerful 'what-if' capabilities to help achieve competitive advantage

By integrating with their other products including a sophisticated time tracking tool, Atlantic can present all levels of management with real-time information about the progress of their operational activities. What makes it more interesting is that because it has maintained it's focus, the product is cost effective, can be deployed in just a few months and will deliver it's ROI in less than six months.

A Clear Benefits Case

The benefits are real. For example with a significant investment in professional staff it is vital that any business maximises the use of it's resources, matching the right people to the right work, both now and when forecasting into the future. The savings in improved productivity and resource smoothing that can be had here are sizeable in their own right.

Equally, consider a typical situation where human nature often leads managers to have a perspective of 'it'll come right in the end' despite all the signs that it probably won't. This can lead to a lack of real confidence upwards throughout the management hierarchy if they have to rely on a reporting mechanism that is somewhat opaque. Not to mention the corporate governance imperative.

Also, if you subscribe to the management view that 'you can't control what you can't see' then the problems are obvious. So, if you could establish a management practice whereby high level strategic milestones are linked down through the organisation to the lowest operational activities, whether they be internal company operations or external regulatory activities, which would achieve both accountability and communication at the same time, wouldn't that be worth something to the organisation and add real value to the management debate?

If you could drill-down through the organisation and view your total cost exposure across your mix of project types as well as tracking the risk status of those drug lifecycles, the organisation's decision making capacity becomes swifter, more focused and will ultimately guarantee the confidence of all concerned that you have the best information available to steer the company to meet both it's short term objectives as well as longer term sustainability and growth.

But of course it doesn't just end there. R&D may be a vital part of the ongoing business, but so too are the marketing, sales and manufacturing supply functions.

Just think of the potential to accelerate performance if you could link management disciplines across the full range of the company's operating activities!

The Challenge Ahead

While IT investment to date has focused on the support of the drug development cycle, the opportunity to build in the same 'quality by design' principles is now available to the management team.

By choosing products such as Corporate Vision from Atlantic Global Plc, companies can continue the drive for competitive advantage by taking the challenge to a new level. Helping to leverage the talent of the management team by turning it into a focused unit with common objectives and a clear picture of how strategy can be turned into operational success is a highly attractive prospect. Those who choose to ignore this opportunity may find they live to regret it, and sooner than they might think!