The Pharmaceutical Industry in the 21st Century
Cambridge, Massachusetts
November 9-10, 1995
An overview of current MIT research into new directions in R&D, drug development, manufacturing, sales and marketing, and business strategies, as well as findings which pinpoint emerging trends in productivity, benchmarking, quality, innovation, and the marketplace that will redefine the industry in the 21st century.
New research on the impact that key transformations in research methodologies, new drug developments, and the rise to commercial importance of biotechnology have had on pharmaceutical firm size, entry and exit. How the degree of competition has changed over time. What the impact of the FDA has been over time.
Plus surprising findings about the relationship between high rates of entry and exit and the existence of extensive market power. How recent changes in the capital market have altered the behavior of some firms. Includes and analysis of the development of the industry and its competitive conditions. What role independent drug firms are playing in the market. What kinds of companies are more likely to survive over the next 5 years.
Pressure in the marketplace to reduce costs has many pharmaceutical companies looking at their manufacturing operations and asking:
In this session, you will learn what MIT researchers discovered about opportunities to reduce manufacturing costs by improving efficiency and effectiveness.
You will also learn about benchmarks you can use to compare your own manufacturing practices with those of competitive companies, as a way of measuring performance and catalyzing improvement through performance metrics.
Where the most significant opportunities lie for cost savings in pharmaceutical manufacturing when it comes to:
This research addresses a key set of questions related to drug development, to the flow of capital in the pharmaceutical and biotechnology industry, and to the industry's profitability: What risks and returns have pharmaceutical firms faced and enjoyed by investing in drug development projects? Why is it that the cost of capital to pharmaceutical firms of undertaking manufacturing investments are less than those for R&D?
Despite the widely held belief that pharmaceutical companies are highly profitable, there is no accepted method for determining their true economic payback. In this session you will learn how MIT researchers were able to develop a new financial model which shows the economic profitability of major U.S. drug companies. This model, which can also be used to analyze risks and returns in biotechnology, provides a more accurate way of assessing the costs of drug R&D and of capitalizing and developing new drugs.
Time-to-market is a crucial driver of profitability for pharmaceutical and biotechnology companies, where the process of steering a drug through preclinical and clinical trials is so unpredictable. How can companies employ proven and effective project management techniques to reduce the cost and time of discovering anew chemical entity, generating evidence of its safety and efficacy, and launching it in the marketplace?
Plus, what can be learned from successful project management practices found in other industries? What kinds of authority and responsibility need to be placed in the hands of line managers to make the system work? What kind of project management system improves the company's speed and effectiveness in responding to negative information?
Though rapid technological and scientific change has created enormous problems for much of U.S. industry, the pharmaceutical industry seems to have mastered the ability to innovate continuously in the face of revolutionary scientific change. How has the industry done it? What went right at successful pharmaceutical firms, and what are the implications for the way you structure your research programs? What effect has the transition from "random" to "rational" drug design had on R&D success? What MIT's research on R&D productivity in pharmaceutical companies uncovered about:
This research examines the key marketing and economic issues tied to entering a new pharmaceutical market: How does a firm's order of entry and promotion strategy for a new product affect its success in this rapidly evolving marketplace? Based on a case study of the diffusion of modern anti-ulcer drugs, this session details the economics of marketing modern breakthrough drugs, including:
Findings on new methods to evaluate pharmaceutical cost effectiveness which tie new product efficacy to its favorable impact on workplace performance. Using the costs of mental depression as a case example, MIT researchers explore whether the workplace benefits associated with new drugs can directly affect the ability of a firm to price and sell its products, in both new and existing therapeutic treatments. What are the implications for the ways pharmaceutical and biotechnology companies now price, market and sell therapeutics? Five key questions you'll need to be able to answer in order to take advantage of this approach.
A panel of distinguished experts explores key changes that lie ahead for pharmaceutical and biotechnology companies in R&D, drug development, new technology and profitability, as they prepare for the competitive environment of the 21st century.
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