Dear Santa: Saying Goodbye to 2011—Looking Ahead (With Hope) to 2012
Posted on Fri, Dec 02, 2011 @ 11:55 AM
As we head rushing towards the end of 2011 and look ahead to 2012, a young man’s (or in my case, a relatively young-ish healthcare communications professional’s) thoughts turn reflective.
Therefore, let’s review what 2011 meant to the life sciences industry, and let’s make a wish list of some of the things we’d like to see (or never see again) next year. I know that some members of our industry would much rather drink battery acid than re-live the events of 2011, but those who fail to learn from history are doomed to repeat it. So humor me.
Here’s a quick summary of what we learned this year:
The Industry is Changing: Deal With It
If anybody thinks that the biopharmaceutical industry is somehow going to go back to what it was in the 1990’s, then a nice, comfy padded cell may be in your future. Let’s face it folks, those days are over. Too much has changed. The total number of pharma job cuts since 2009 is approaching 150,000, and approximately 300,000 pharmaceutical industry jobs have been cut since the year 2000. The majority of these job cuts were at the world’s largest pharmaceutical companies, and many of them were the result of consolidation due to M&A activity, operational cost cutting and significant sales force reductions.
An increasingly pedantic regulatory environment, lower returns than ever before on R&D investment and operating costs in Big Pharma limiting which drugs can be profitable for them are factors unlikely to change without a total transformation of the industry and the regualtory system. Also, comparative effectiveness is coming. I believe that a comparative effectiveness model similar to NICE in the UK will evolve here in the US as we continue to grapple with escalating healthcare costs and decreasing returns on healthcare investment.
The good news is that in 2011 we saw a number of new drug approvals from smaller, more nimble companies.
A Life Sciences Industry Wish List for 2012
So, what would you like to see in 2012? What lessons can we take into the New Year?
1. Please Don’t Supersize Me
The supersizing of the pharmaceutical industry, which began in earnest in 2000 when Pfizer bought Warner Lambert, has contributed significantly to the industry’s decline. In other words, in a quest to satisfy the ever-increasing demands of shareholders, life sciences companies have pursued a strategy that has significantly contributed to the destruction of their own industry. Supersizing has ultimately resulted in downsizing. Metaphysically, this makes sense (what goes up, must come down), but as a business strategy, it sucks.
2. Boutiques are Beautiful
I think as we head into 2012 and beyond, the life sciences ecosystem will evolve to a much more focused, specialized “boutique” model where mid-sized and small life sciences companies will thrive. In fact, I wouldn’t be surprised to see one or two Big Pharmas restructure themselves to more closely resemble boutique specialty pharmas. The name of the game going forward is agility, flexibility and speed. These are not attributes that are typically characteristic of industry behemoths.
3. Smarter Procurement Policies = Better Value and Results
On the agency side, it has been pleasing to see that procurement philosophies have been evolving at leading life sciences companies. Just a few years ago, unless you were a supersized, big global healthcare communications agency that sent in senior VPs to pitch the business and then staffed it with fresh faced twenty-somethings who a just few months ago were playing Hacky Sack on some college campus, Big Pharma didn’t even want to talk to you. Now the tide seems to be turning, as life sciences companies are once again realizing the value that mid-sized and small independent agencies can deliver. There are always going to be assignments where only a big, global healthcare communications agency can do the job. But I would argue that there are many marketing challenges where smaller independent healthcare communications companies can provide breakthrough ideas and programming much more cost effectively than the big guys. The time has come to give us all a seat at the table, and let us compete where it makes sense for us to do so.
Looking Ahead, Hopefully
So good riddance to 2011—a learning year, and a year of realignment for many—and bring on 2012. As an eternal optimist, I believe that there will always be abundant opportunities for companies and individuals who are passionate about our industry and are open to change. Because the only thing that is certain about the years ahead is that our industry will continue to adapt and evolve. And when things change, new opportunities are created for those willing to seize them.
Happy holidays everybody. See you all next year!
--David Avitabile