KEY IDEA: Theordore Levitt, author of Marketing Myopia, has said “that there is no such thing as a growth industry. “The history of every dead and dying ‘growth’ industry shows a self-deceiving cycle of bountiful expansion and undetected decay”. But somehow pharma is addicted to growth that isn’t possible anymore.
Insiders within the industry are saying that Biogen tried to hire a CEO from outside the company, but candidates didn’t want any part of a company that is floundering and in trouble. It seems that a lot of pharma CEO’s are leaving the sinking ship and grabbing the few spaces in the lifeboats.
Even with the approval of a new drug Biogen is considered to be a takeover target. Their MS franchise is being challenged by new drugs in the market and a lot of Biogen people are still being told “you no longer have a job”. Rather than help navigate the company through difficult times the ex Biogen CEO has taken a job with a new startup with the promise of a major payday.
Now don’t get me wrong, blockbusters are still going to happen, but the possibility of another Lipitor or Cialis is fading as more drugs come off patent and insurers demand proof of new drug efficacy. Pharma’s response has been to raise prices and launch new drugs with obscene price tags as the CEO’s struggle to keep shareholders happy. However, too many CEO’s, despite massive paychecks, are finding the challenges of today’s market environment too difficult to navigate. It’s better therefor to leave and join a startup with the promise of a huge payday if they make it big.
The challenge for any pharma CEO is twofold: first, they have to ensure that their organizational cultures are ready for today’s empowered patients and HCP’s who don’t have time for sales reps and second, they have to convince Wall Street that the days of mega growth are over for most pharma companies despite R&D spending increases.
Pharma CEO’s also have to be willing to take smaller paychecks and not look at their jobs as a chance to have private jets and huge perks. Marketing Myopia says marketers should ask themselves “what business are we in?” What too many people don’t understand is that we are in the business of wellness not selling products.