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The case for leaders with scientific acumen in pharma

Published on 25/01/16 at 10:44am
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Pharmaceutical companies are currently undergoing fundamental, disruptive changes to conventional research and development models. This is in an attempt to address longer product development cycles, ever more stringent approval requirements, and greater scrutiny of pricing.

However, most pharmaceutical companies are struggling. Not with a lack of good science, but with how to deliver that science in the form of effective and affordable medicines. In order to overcome this challenge, we will need a new generation of confident, innovative, and adaptable leaders who will evolve business models, move away from a process culture, and put the delivery of science centre stage.

Looking sideways

The recent surge in product approvals has been welcome news for the pharma industry. However, the cost of bringing a product to market continues to rise: with the average price of developing a new medicine sitting at over US$1 billion, pressure on organisations and their R&D teams to develop medicines that will achieve blockbuster status is greater than ever before.

For decades, the traditional approach to improving productivity has been focused on mitigating the risk of clinical failure in the pipeline. Recently, we have seen more diversified tactics, such as targeted acquisition of external pipeline assets, partnerships with other companies, large reorganisations of in-house R&D units and footprints, and extreme focus on high-value specialty areas such as rare or orphan disease indications.

Despite these developments, it is difficult to predict what amount of tweaking the traditional R&D model will need to move the needle on innovation and productivity overall. There is an acute need to address the key operational issues of organisational complexity and top-level decision-making. Pharma company executives will need the courage and knowledge to make bold, strategic decisions to drive fundamental change through their teams in order to achieve the longer-term success rates they strive for.

From top to bottom

More effective decision-making regarding R&D, and the visionary strategies necessary to drive innovation, require greater scientific experience and expertise among the industry’s senior leadership. This extends to the board, where scientific and functional expertise related to drug development is increasingly needed in order to fulfil core responsibilities to shareholders.

Despite these trends, our research found a shortage of scientific expertise at the chief executive level. Some 70% of current CEO seats are held by non-scientists and a further 80% have had no industry-specific R&D experience. To ensure that innovation stays on the strategic agenda, those in the top role often rely on their executive team and, in particular, the individual in the top R&D seat.

Meanwhile, our research found only 25% of non-executive board directors at the top global pharmaceutical companies have any degree of R&D experience. Of these, a large proportion gained their experience at an academic or research organisation (or both), while only about a third had hands-on experience in pharma industry R&D.

Notably, there has been a recent spate of board level appointments of individuals with a scientific background: it appears the lack of scientific acumen at the top is already playing on the minds of industry leaders. 

In order to materially advance R&D models and innovation strategies across the industry, fundamental changes are necessary at the highest levels of leadership more broadly. To remain competitive, it is increasingly vital for all players to have the right mix of relevant scientific expertise and experience on their executive teams as well as their boardrooms.

Dana Krueger leads Russell Reynolds Associates' global biotech and pharmaceuticals practice. 

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