The Billion Dollars Project
Pharma Management Models from S to XL Sizes
Sonsoles Musoles, Medicine & Surgery MD, MPM, PMP, Collaborator at DET, La Salle, Ramon Llull University
Jaume Ruiz, Pharmacist, MPM, Collaborator at DET, La Salle, Ramon Llull University
Drug Development programs lay on the assumption that large economic returns will compensate the multiple risks to produce marketable drugs. That is because the long, difficult, and expensive way from ideas to patients, takes about 10 years and investments close to 1 billion dollars (Anon, 2003). To get one new medicine from the lab to the pharmacist's shelf is marked by the continuous risks and investments along all the phases being only at the end, when bringing sales to fruition, that high paybacks and large benefits between 18 to 44% compensate for the bet. (Hjelt P, 2001).
Each new drug has its own history, but, in general, is the result of pioneer discoveries in the study and understanding of pathologies, or from specific programs that strategically explore research areas with highest scientific and economic possibilities. The current one billion path, summed up in exhibit 1, starts with the identification of the biological target (gene, protein…) with potential role/s to be modulated in order to influence one pathology. Chemistry will identify the best molecules as modulators of these targets (lead identification), and integration with biological screening during the preliminary research (lead optimization), will allow the selection of the best candidate. Development until marketing involves demonstration of effectiveness and safety when used in humans.
Exhibit 1 – Phases in Drug Discovery & Development
In average, only 1 of 10000 originally synthesized compounds will clear all the hurdles on the way to becoming a commercially available drug, and with no guarantees of being a success for a long time. Fierce competition, safety in long term use, government's health policies, patent protection expirations and Generic introductions are post-marketing threats on the expected benefits
The business scene
World wide Pharma organizations from S to XL sizes share the same objective: First and Best-To-Market, and face the same challenge: effective project management to optimize resources, to short time to decision points and fulfil regulatory and quality requirements, increasing the options of reaching the market competitively.
But, what do we understand under the “S to XL” classification? Exhibit 2 gathers significant key markers of size:
Source: Selected values from published data by 20 companies in its web sites.
Exhibit 2- Key markers of size
From the past, pharmaceutical companies have been an example of integration from Drug Discovery through Sales, regardless of size or capabilities, affording the complete chain value of its products. Everything it needed to survive it carried out for itself. The continuous pressure to increase pharmaceutical productivity and competitive advantages, is transforming the business structure with external connections of added value. Therefore a net of operational, technical and administrative external stakeholders appears as a complex influence along the long path (Exhibit 3):
Exhibit 3- External Stakeholders
- The molecule ownership, its development and commercialization may relay in a single company, but often several of them are implicated in the full process.
- Pharmaceutical is one of the most regulated sector by public administrations: at least we need to consider FDA (USA) and EMEA (EU), but also the individual administration agencies of the countries taking part in the development and/or those where the product is going to be commercialized, and in some cases the local agencies (individual states, autonomic communities, landers) competent on medicines research, price and/or marketing.
- With the knowledge, technology and expertise of emerging focused companies, new strategic models based on outsourcing services are increasingly adopted. The choice about what activities to do in–house and what to do externally has multiplied, up to the point that easily 5-30 different service providers can participate in the development, execution and/or control.
- Looking to the clients, pharmaceutical markets also have peculiarities: the final consumers (patients), have few direct opportunities to choose the product, being the prescriptor physician who makes the decision. In the current economical context, the Social Security in Europe and the Health Management Organizations in USA, decide preferred product lists and the level of patient co-payment of medicines, influencing in the physician prescription decision.
The sponsor company internal stakeholder scheme (exhibit 4) is not easier: whatever is the size of the company, their structure or the drug development strategy, there are many technical areas of knowledge involved in the process, which are included in different department structures, and three different aspects to supervise: the technical aspects (strategy, plan and results), the control of management (time and cost) and the impact of each individual project in the portfolio context and company objectives.
Exhibit 4- Internal Stakeholders
How can projects be guided with success to the same objective according to these different supporting structures? Pharma management models can adopt multiple solutions depending on company size, business strategies and affordable goals according to the scope of the project and portfolio, with common tools to be used, but different dimensions in its application.
Often Options in Organizations
Start up companies
Very small companies in their start up phase (most of them in the Biotech area), used to be strongly research based and their main asset was commonly a single technology or patent. They were able to carry out the very early phases searching for partners to continue the development. In relationship with its minimum structure, most of the project tasks were outsourced and the project management was assumed directly by the company Director or a high executive. Small very specialized technical internal team plus external advisors would help in the planning and technical supervision of the project.
|Idea & definition||Company high executive|
|Plan||Company high executive /internal team/external advisors|
|Execution & Control||Company high executive/internal team/external advisors|
|Close||Company high executive|
If you are going to manage projects in this context, you need to be aware that:
- ◄ You will cover the whole project life cycle from idea to the results
- ◄ The scope of your project is from the idea to the “selling package”
- ◄ You will manage a quite virtual Team, many of the members being external to the company
- ◄ Your supportive infrastructure will be low: you will need to use your strength in communication, organizational, budgeting, problem solving, negotiation and influencing, and leading skills, being your initiative capacity the key for the project success
Contract Research Organizations (CRO)
We will refer to the Clinical Development CROs, although structure and philosophy are similar in those CROs devoted to preclinical development.
As service companies, their business interests on the project are singular, as, usually, the CRO project is a single clinical trial (subproject) of the development plan (project). The results obtained, are interesting only in the sense of project continuity for further business opportunity. In this context the figure of a “Project Manager” (PM) exists.
This Clinical trial PM usually belongs to the Clinical operations department and his/her main responsibility is executing the project in time, costs, and quality in relationship with the “Good Clinical Practices” (GCP). Although the PM has the main client relationship for the project execution and control, usually it is a business development department member who has gained the project proposal and contract for the CRO, and will manage the contract close out.
In this context, the Clinical trial PM is able to serve more than one trial and client at the same time, following the plan agreed by the business development and the client:
|Definition||Requirements: Client Company |
Proposal : Business development
Plan contract: Business development
|Executing||PM clinical operations|
|Controlling||PM clinical operations /Client company Representative|
|Closing||Contract closing: Business development |
Administrative closing: PM clinical operations
If you are the project manager in this context, you need to be aware that:
- ◄ You will execute the agreed plan you have not participated in
- ◄ Some of your key team members (as external investigators) have low motivation (per se) for the project: need your influence skills
- ◄ You need to serve client and your company objectives
- ◄ You need to use client and your company standard operating procedures (SOP)
- ◄ Your project scope in time is 1-3 years: opportunity to live the full project execution
- ◄ Time and Quality will be the main constrains
When the contracted service is a package of studies, the structure is similar, but a new figure is added: Senior coordinator, who usually takes part in the proposal elaboration and negotiation, supervises execution and control and maintain the client communication up to the end of the project. Clinical Consultants and medical writers are also considered in this context (Exhibit 5)
Exhibit 5- CRO single & multiple projects for a client
|Definition||Requirements: Client Company |
Proposal : Business development/Senior coordinator
Plan contracted: Senior coordinator
|Executing||PM clinical operations/ Senior coordinator|
|Controlling||Senior coordinator /Client company|
If you are assuming the role of the senior project coordinator, you need to be aware that:
- ◄ You will participate in the project definition and planning
- ◄ Your core team will be the project managers of the individual trials, but they can be in other projects at the same time
- ◄ You will be the direct report contact for the client and your company management
- ◄ You need to serve client and your company objectives
- ◄ Your main constrain will be time and costs
Small Size Companies
Even with small size, Pharma or implanted Biotech companies are able to market their ideas. Their interest in New Chemical Entities (NCE) development is then for the complete project. So, discovery, development, production and commercialization areas of knowledge are represented in the organization. Conditioned by their small size, outsourcing is again the best solution to afford the whole process, keeping only core tasks within the company. High technical content and specificity in the outsourcing requirements keeps procurement departments out of the process, being the affected department's members the responsible to search, contract, and control the outsourcing. Sometimes, the outsourcing management represents the highest time consuming activity for the department member participating in the development.
Most of these companies were created and enlarged under top-down hierarchies in which the boss-at-the top pyramid is the executive structure. Project management is not usually defined into this organizational chart and full management is understood as individual contributions along the path with successive leading roles depending on the phase. There is not a global vision and control of each project as Functional Directors are the owners of its unit of knowledge. They have the total responsibility on time, costs and resources concerning the tasks under their directions.
In this context, the figure of project manager, if it exists, is responsible mainly for planning in the adequate software what the Department Heads says, coordinate and compile status report preparation for the scientific and control committees.
|Phase||No Project Management|
|Idea||Functional manager championing|
|Definition||Functional manager championing|
Medium Size Companies
Medium size companies, like the small ones, are involved in the full development process up to registration and commercialization, but usually work under the philosophy of a Project Team approach. Outsourcing continues to be important, but more tasks are performed in-house.
For the proper commercial exploitation of the project, usually external support is also needed, at least for territories where no company structure is available. The search for a partner is, therefore, also needed and the partner relationship management, once the agreement is signed, will direct the way the development is drawn and how the processes are managed.
The project team members are close physically and the team management can be under the structure shown in exhibit 6.
Exhibit 6- Project Management in Project Teams
The role, responsibilities and expectancies of the Project Manager are always conditioned by the maturity status achieved in the company. It can be as limited as in small organizations or range up to the maximum responsibility of the project: definition, planning, executing coordination, control, co-responsibility in costs, reporting, and project representation in and out of the company.
|Low maturity||High maturity|
|Idea||Functional manager championing||Functional manager championing|
|Definition||Functional manager championing||PM|
|Planning||Department Heads/PM support||PM|
|Executing||Department Heads/PM support||PM|
|Controlling||Department Heads/PM support||PM|
Whichever is the level of maturity, the Project Managers will have in common:
- ◄ Most probably belongs to one of the technical departments, being nominated for PM function temporarily (maintaining dual reporting).
- ◄ Will live the idea development during a long period on time, which allows but also require to have a broad view of the project
- ◄ Will coordinate a multidisciplinary and complex team with different jargon (even with same language) and interests
- ◄ Needs to manage properly the department heads relationship
- ◄ Will coordinate technicians doing internal work and those who manage the outsourcing
- ◄ Their stakeholder list (internal and external) is probably the longest and more complex
- ◄ Will suffer for lack of supportive infrastructures. Therefore their initiative capacity will have high impact in the project success (being or not formal recognition to PM contribution)
Big Pharma (L & XL) Corporations
Big Pharma companies are involved in the whole process of drug discovery, development and commercialization similar to the previous ones, but its scope is bigger in the number of projects running in parallel and the global approach to market (number of operating countries).
If the small and medium size companies suffer their dependence of others to get the market and the difficulty to manage different external partners, the big ones affront the problem of its de-localization (different team members in different countries), the specialization (most of them organized as business units), a big portfolio of projects to manage and the difficulty of getting punctual and accurate information to make business decisions.
The amount of drug development projects, and the business unit specialization, requires that some projects are grouped by their characteristics and objectives as programs. But, at the same time, the complexity to manage a single project team is increased in big pharma companies by :
- Physical distance between the project team members, and between project team and the decision maker groups,
- Multicultural environment,
- Global development approach (need to consider more legal and regulatory requirements, more infrastructures involved, more market singularities…)
- Relatively less outsourcing (increasing amount of operational personnel involved in different parts of the world)
The consequence is the need to split in sub-teams a single project (exhibit 7).
Exhibit 7- Example of project team and sub-teams
In this context Project Management is a “must”, and is professionalized, requiring specific training, is no longer a role performed by functional technicians with adequate personal skills.
Project Management Department hosts those people involved in the management of the project portfolio of the company. The responsibility of this department is to coordinate the definition and execution on time, cost and quality of the projects, but also provide punctual and accurate information of the project evolution and its impact in the market context to the top management, for operational and strategic corporate decisions.
Professionalism leads to a career with different steps: planner, project manager, senior project manager, project leader, senior project leader…with different levels of training, experience and personal skills to afford different responsibilities in projects/programs
|Phase||Management expertise required|
|Idea||Functional manager championing|
If you are working in this context:
- You will have supportive infrastructures and the number of stakeholders you need to attend directly will be lower
- You will be able to manage, coordinate simultaneously and prioritize different projects under a professional framework in a multi-centric and multicultural environment.
- You have the opportunity to develop your career, increasing your experience and responsibility by steps, but you may loose the global & detailed view of the project, as you will be focused in a part of the project or in the overview of several projects
- You will need to work more the communication and team belonging feelings to get the project objectives reached
- You will increase your expertise in dealing with Metrics, Risk and Change Management and the economic value estimations of initiatives and their impact in the rest of projects.
When the company is really big, to properly manage the projects, different Project Management Departments arise, each devoted to a specific Business Unit, coexisting in the organization, some times far away one each other. The evolution of those independent PM departments frequently leads to different practices within the same company and inefficiencies in the global project management approach.
In this case a new umbrella structure is need, able to:
- Support and harmonize procedures and systems,
- Standardize project documentation as reporting procedures or project tracking,
- Implement and provide new methodologies and develop processes, tools and techniques,
- Put improved practices into practice and assure organization will apply best project management practices,
- Manage and assemble all information generated in the different PM Departments and
- Train all personnel involved on, in order to get the proper harmonization.
It represents a high maturity level in these organizations and usually are called Project Offices, where in addition, global view of company drug development projects, allow adequate portfolio analysis and prioritization proposal preparation.
- Not all the companies have the same requirements for project management
- Not all the companies offer the same possibilities to a Project Manager.
- Large differences in maturity levels in Project Management can be found in the Pharmaceutical industry depending on size, business and scope.
- Medium size companies will give you mayor opportunities to gain wide expertise by means of your global and detailed view and responsibility of few number of projects.
- Big corporations attractiveness is based on the internal career opportunities, but your view/experience will be fragmented.
Kahn, J. & Hjelt, P. (2001, July) “Las mayores corporaciones del mundo”, Fortune144 (2) 144-152
Anon (2003). Total Cost to Develop a New Prescription Drug, Including Cost of Post-Approval Research, is $897 Million. The Tufts Center for the Study of Drug Development Press Release 13 May 2003.
Dekker, M. (1998) Pharmaceutical Project Management. Drugs and the Pharmaceutical Sciences Series 86
© 2006, Francisca Anton, Sonsoles Musoles, Jaume Ruiz
Originally published as a part of 2006 PMI Global Congress Proceedings - Madrid, Spain
PMI research shows project teams that draw from an array of perspectives and skillsets deliver powerful outcomes.