Managing the science of drug development

Professor Geoff Tovey shows how companies can continue the drive for competitive advantage by leveraging the talent of their management team to focus on common objectives

It is no surprise that the adoption of Information Technology (IT) by drug companies is proving instrumental in helping those of all sizes to adapt to the business challenges presented by the global economy and, critically, the number of drugs coming off patent in the next few years (see Figure 1). Both of these factors have forced drug companies to become ruthlessly focused on reducing the cost and time of drug research and development cycles as a business necessity. Certainly, no research-based pharmaceutical company 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.

It is easy to see why profits are under pressure. GSK has lost two megasellers to generic drugs since mid 2003: anti-depressant Paxil (paroxetine) and Augumentin (amoxycillin/clavulanate). The antidepressant Wellbutrin could well go the same way, and the result is low single digit growth.

What else can companies 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.

data handling

So, ask any company whether it invests in IT and 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 to apply technology to the task of taking a potential 10,000 drugs and reducing them to the one that is worth developing, and with the lowest associated attrition rates.

There is 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 (PAT).

But there is one significant area of a drug company that has not yet seen the benefits of a focused IT solution - 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 appear to be plenty of solutions around and much investment has been made in them?

The answer is that such tools focus on capturing and filtering volume information that then needs analytical reporting. While there is a place for such systems, their very nature means that they take a long time to bed in and fail to deliver the promised Return on Investment (ROI) in anything like a reasonable time frame. There is a feeling that management has reached information overload from the outputs of such systems and what started as a support tool has quickly become a burden.

What the management needs is a support tool that will provide a focused vision about how the cost base is being used: whether the right resources have been matched to the right r&d initiatives and how the low-level operational activity links back to the company's strategic goals.

There is also 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's objectives.

management challenges

This gap in the market was recognised by Atlantic Global, a supplier of business and resource management products based in Bradford in the UK, which came up with a solution. It has used its 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 multinational companies it has developed a web-based product called Corporate Vision a product that delivers the capability to transform the way in which 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 organisation

• portfolio management - providing a consolidated picture of resource and 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 Atlantic's other products, including a sophisticated time tracking tool, the company 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 its focus, the product is cost effective, can be deployed in just a few months and will deliver its ROI in less than six months.

The benefits are real. For example with a significant investment in professional staff it is vital that any business maximises the use of its 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 confidence upwards throughout the management hierarchy if they have to rely on a reporting mechanism that is somewhat opaque.

Also, if managers subscribe to the management view that 'you can't control what you can't see', then the problems are obvious.

So the programme allows managers to drill down through the organisation and view the total cost exposure across the company's mix of project types as well as tracking the risk status of those drug lifecycles; releasing capacity becomes swifter, more focused and gives the best information available to steer the company to meet its short term and longer term sustainability and growth needs.

huge potential

But of course it doesn't just end there. Research and development may be a vital part of the ongoing business, but so too are the marketing, sales and manufacturing supply functions. The potential to accelerate performance by linking management disciplines across the full range of the company's operating activities is huge.

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. Choosing products such as Corporate Vision from Atlantic Global, means companies can continue the drive for competitive advantage by helping to leverage the talent of the management team. Turning it into a focused unit with common objectives, strategies and, hence, 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!