In today’s fast-paced pharmaceuticals industry, perhaps no single factor is a greater determinant of business success than time-to-market. While there are many strategies pharma companies must utilize in order to achieve profits, all of them are beholden to the limitations of the research and development process. If a company cannot get drugs from the research lab to a customer’s hands faster than the competition, it could potentially face huge financial losses.
The Critical Role of Pharma R&D
The initial cost of pharma R&D is substantial. As drug designs become more complex and the manufacturing techniques more sophisticated, pharma companies must make heavy investments if they want to remain on the cutting edge of research. In addition to investments in technology and talent, they must also take on a significant regulatory burden in terms of testing. Proper steps must be taken to comply with legal requirements at every step of the R&D process to ensure the products that eventually reach the market are safe and effective.
Pharma companies may not be able to control every factor of the R&D process, but they do retain control over the way they approach it from an organizational standpoint. Building teams that understand the stakes involved and are committed to furthering the company’s goals is crucial to reducing time-to-market. Investments in technology and talent remain important, but if pharma companies do not continuously evaluate their methodologies and organizational structure, they run the risk of falling into a status quo bias that prevents them from adapting quickly to changing market conditions.
Agile leaders and cross-functional teams can help pharma companies become more effective in their approach to R&D, but they will also need an organizational commitment to change readiness that allows them to maximize efficiency and productivity. Given the high stakes of bringing new products to market, pharma companies can’t afford to rely on outdated methodologies and business models if they want to remain competitive.
How Merck Met Change Head-On
As a major player in the global pharma market, Merck faces the constant challenge of reducing the cycle time and expense of developing new drugs and bringing them to market. The industry trends have seen spending increase even as fewer drugs are hitting the market and taking longer to do so. To compete effectively, Merck’s BioProcess R&D group needed to find ways to close the gap between strategy and execution, effectively shortening the time between setting plans in motion and achieving business results.
Merck turned to OnPoint Consulting to reevaluate its mission and vision while also overhauling its approach to change readiness. The first step was to revise the BioProcess R&D team’s five-year mission strategy and implement changes to the group’s organizational structure to support those goals. Customized versions of OnPoint’s Execution Gap and Change-Readiness Surveys helped to evaluate how well the organization was positioned to manage change and identify factors that could either enhance or hinder its ability to execute strategy effectively.
OnPoint also conducted several meetings with key stakeholders to review past performance. This process helped to identify where execution had fallen short during previous initiatives. Armed with this data, viable solutions were developed to clarify action steps that would most directly impact execution.
The changes Merck implemented for its BioProcess R&D group significantly improved its cycle time-to-market for new products and also expanded its project capacity. Critically, the new structure and clarification of roles made it possible to make those improvements in efficiency and productivity without taking on the expense of additional personnel. Much of that success came down to buy-in from employees and other stakeholders. In the wake of the changes, 95 percent of employees reported that they knew why key changes needed to be made. They also indicated their commitment to implementing the new approach to the group’s vision, strategy, and goals.
Merck’s decision to meet the changing demands of R&D head-on demonstrates how even the largest players in the pharma industry have the ability to adapt to changing market conditions when they make a commitment to doing so. Instead of throwing more money at the problem or relying on a backlog of existing patents to deliver future profits, Merck’ BioProcess team made the proactive decision to reevaluate the way it approached R&D from an organizational standpoint. By making hard choices and implementing changes to emphasize strategic goals, the company improved its time-to-market and put itself in position to remain a competitive player in the pharma industry for years to come.