(Reuters) - Big drugmakers, under pressure to
streamline operations in the face of rising costs and slowing sales, are
looking to the automotive industry for tips on tuning up their profit engines.
Cars and medicines may seem to
have little in common but executives are starting to join the dots between the
sectors, applying the lessons of "lean" car production systems and
fragmented value chains to the world of pharmaceuticals. It shows a new openness to
outside ideas by Big Pharma.
GlaxoSmithKline, for example,
teamed with McLaren in September to get innovation and process know-how from
its Formula One engineers, mirroring a 2009 move by AstraZeneca to tap
manufacturing expertise from Jaguar Land Rover, part of India's Tata Motors.
The 250-strong consulting arm
of German sports carmaker Porsche, for its part, has targeted pharmaceuticals
as a sector ripe for advice.
That may raise eyebrows
because profitability in the drugs industry, with a 10 percent pretax return on
invested assets, is roughly double that in the global auto sector.
But as drugmakers face
healthcare cuts, a record wave of patent expiries and increased regulatory
hurdles for new drugs, they may need to take a page from carmakers' playbook
when it comes to ruthless streamlining and cost cutting.
Vivian Hunt, European pharma
head at consultancy McKinsey, sees clear parallels between the way autos have
"disaggregated" and what is starting to happen in pharmaceuticals.
"The auto industry has
been through a huge number of structural changes yet is still a hugely
innovative sector, and is a growth industry in many countries and for many
players," Hunt said, adding that this offered lessons to others.
RETREATING TO THE CORE
Once upon a time, the auto
sector was vertically integrated and dominated by large, mainly Western
companies. Today, some 70 percent of a car's value is attributable to
suppliers, according to market researcher SupplierBusiness.
Major carmakers have retreated
to a few core operations such as brand marketing, design, and final assembly of
key modules such as engines and chassis. They now orchestrate an army
of contractors who supply brakes, transmissions and sometimes even bodywork,
along with thousands of other parts needed to build a car.
A similar trend may be
emerging in pharmaceuticals as research budgets are cut, more drugs are
licensed in from biotech companies and certain operations, including parts of
the clinical trials process, are farmed out. As of now, drug firms still
rely heavily on creating value in-house, suggesting there is a way to go yet
and moving down a similar track could potentially yield big rewards. According to Porsche, the
average product development time in the auto industry has fallen by 28 percent in
recent years, while in pharmaceuticals it has risen by 31 percent.
In a report last week,
McKinsey warned that drug majors need to change their ways since "the good
old days of the pharmaceutical industry are gone forever" as profit
margins head substantially lower.
In addition to pressures from
medical insurers and regulators, large drug companies are also finding more
upstart competitors moving in on their patch. The world's top 10 firms may
still control nearly half the market but Big Pharma has a growing bunch of more
focused rivals, from biotech to generics.
Φαρμακευτικο Μαρκετινγκ: Θεωρια, Πρακτικη, Δεοντολογια
The ultimate guide for Pharma Marketing
Champions
Ζητήστε
το στα κεντρικά βιβλιοπωλεία ή δώστε την παραγγελία σας τώρα…