While historically pharmaceutical industry growth has been driven by the successful launch and introduction of blockbuster drugs, recent headlines have been splattered with pharmaceutical stock woes stemming from late clinical-stage product withdrawals, failures of promising compounds and poor performance of new product introductions. As a result, many industry observers believe the traditional blockbuster-driven model will no longer provide the double-digit revenue growth experienced in previous decades.
Instead, pharmaceutical companies will need to innovate more and launch products more frequently, and more successfully, while still doing it quickly and managing the overall cost. They will have to look outside their core molecule-based products and expand their portfolios - not just with more and probably smaller revenue products, but also with drug-device combinations, biological and genetic-based products.
With many pharmaceutical companies having optimized their drug discovery and clinical development processes in the 1990s, the ability to maintain a competitive advantage in the coming years may stem on the capability to consistently deliver successful new products to the market. With so much riding on the success of future, more complex product launches, the launch management process is becoming even more important than in the past and selecting the right leadership for the "next" launch could become the most important strategic decision for the company.
For decades, many pharmaceutical companies have taken a traditional approach to the management of their product launches. The project leadership has come from functional background with functional accountability. This has meant that R&D would lead the early stages of the launch, transition it to the marketing/commercial operations in the later launch stages, and ultimately transition it to the brand team at launch or soon thereafter. The approach ensures that the launches are led by managers who are very competent on product development and launch methodologies. Unfortunately, this does not ensure the managers are very skilled at managing complex projects and ensuring the appropriate collaboration, communication and prioritization across all of the key functions needed for successful execution of a launch.
Launches led by functional heads tend to have a very strong focus on "technical content" rather than on meeting critical milestones, understanding interdependencies and managing the overall risks to optimize not only the launch, but also product's lifecycle profitability. In today's environment, failure to manage these aspects can result in regulatory challenges, launch delays, excess time being spent in managing stakeholder relationships, significantly higher costs and ultimately lower returns on new products.
With increasing complexity of the launches, more and more companies have introduced the concept of Program Management Offices (PMOs) to the management of their launch teams. The PMO concept has its roots in construction and engineering, large-scale business transformations, and more recently in major IT project deployments. Each of these share common traits that can be seen in today's and tomorrow's product launches - multiple stakeholder groups, increasing involvement of third party providers, multi-functional and interdependent work streams, and the company's reliance on consistent, effective and efficient delivery.
The benefit of introducing a PMO is that there will be a strong focus on the plan-do-review process. The PMO function can ensure that every function involved participates in regular update meetings where progress is reported and actions plans installed to address unexpected issues. However, not all PMOs are created equally. Spending time upfront to understand the dynamics of the product launch and organization will enable you to tailor the PMO function to the company's specific needs.
The overall objective of the PMO is to drive launch teams towards successful milestone completion, integrate work streams, mitigate risks, and coordinate communication across the stakeholder groups. The PMO should be based on a core concept of providing senior management with the ability to direct and manage a complete product launch in a changing, multi-dimensional environment.
The scope of the PMO's role will vary for each product launch and should be influenced by the complexity of the launch and the strengths and weaknesses of the organization. In most situations, a global launch lead will be installed to set strategic direction and retain accountability for the decision making process. In these situations, the PMO will have a more supportive role responsible for the execution of the plan. In other cases, the PMO will take a more active role in leading the launch, such as having responsibility for the day-to-day management of the launch. In these situations, the PMO will be actively driving the progress reporting, setting certain corrective actions, and maintaining accountability for components of the launch management framework. As rule of thumb, the more complex the launch (which can be defined as the deviation of the product and market strategy from the company's experience, such as entering a new therapeutic area, managing a sequence of multiple indications or entering a new geography) and/or the less rigorous the organization is on communicating and resolving cross-functional issues, the greater the role of the PMO.
|PMO Role||Description Of Role||Factors Increasing Importance Of Role|
|Organization & Governance||
|Communication & Change||
|Planning & Monitoring||
|Issue & Risk Management||
It is very difficult to have a PMO that is accountable for the launch since the PMO is highly process (as opposed to content) focused. The accountability for the launch is often retained by the product director. It is the level of support provided to the product director that will vary.
The PMO lead, and support staff, can be resourced internally, from an external party, or a combination of both. There are benefits and concerns with each approach. The decision typically rests on whether the resources with the necessary expertise and skill sets are available within the organization. However, there can be cases where companies seek external support to supplement internal expertise. For example, in a situation where the launch involves a new product category (e.g. drug-device combinations), requires an entirely new go-to-market strategy, or where high turnover has resulted in a loss of critical resources, companies will leverage resources and expertise from third parties.
Since the success of the PMO hinges on the combined knowledge and competencies of its members in three areas (content knowledge, corporate culture/organizational knowledge, and program management capabilities), the staffing decision should consider each of these factors. A base competency is required in each area; however, the optimal mix of required competencies depends on the specifics of the product launch and the organization.
The PMO role should comprise of resources who are first and foremost project management experts, preferably having participated in or led prior product launches. A detailed understanding of the product launch process is required in order for the PMO to coordinate the activities and have the ability to identify the interdependencies that exist. This becomes extremely important when the product and/ or the go-to-market strategy vary drastically from the company's previous experience. In these instances, functional experts will rely on the PMO to coordinate launch decisions, identify interdependencies, and coordinate communications. The PMO will generally not be experts in all of the content areas. As such, the PMO will rely on the specialists within the areas for the specific functional expertise needed to execute the launch.
As an example, on a recent launch, a pharmaceutical company's marketing function was unaware of the impact their decision on product return policies could have on the customer service function and the sales force. Fortunately, the company had installed an experienced launch PMO lead who identified the interdependency. As a result, he ensured the right functional representatives were involved in making the decision and developing follow-up action plans.
The success of the PMO lies in their ability to foster collaboration among key functional leaders in the planning and monitoring process and ensuring issues are raised in the PMO launch forum instead of functional silos. This enables the launch team to respond to threats more efficiently and ensure risk mitigation and action plans are coordinated across functions.
Since the PMO is an extension of the existing organizational structure, it lacks the authority provided by direct reporting lines. Often functional leads will show antipathy for a PMO's role in monitoring and challenging their progress against a launch plan. Therefore, knowledge of the corporate culture and the ability to access informal organizational networks can play a key role. The importance depends heavily on the culture that exists within the organization.
Typically, strong functional silos and organizations that struggle with cross-functional projects are situations where the knowledge of the corporate culture and the ability to tap into informal networks will play a key in the success of the PMO model and launch. In these cases, the PMO staff should include individuals that are well regarded in the organization and/or have a strong informal network. Their ability to engage stakeholders outside formal reporting lines will be a valuable resource throughout the launch process.
Program management is at the heart of the PMO leadership model, and as a result fundamental program management capabilities are paramount for members of the PMO staff. Many capability frameworks have been published that outline the correct mix of interpersonal, leadership and technical skills required to be a successful program manager. These frameworks often include components of strong communication, time management, and facilitation skills.
Pharma executives realize that business performance and growth will be increasingly correlated to their ability to bring superior products and services to market in a time-efficient and cost- effective manner. In the post-blockbuster era, gaining competitive advantage will increasingly depend on establishing the capabilities to consistently deliver successful product launches. More and more pharma companies are learning from industries that experience similar pressures (e.g. construction and engineering and IT project deployments) and introducing the concept of Program Management Offices (PMO) to their product launch teams. Leveraging the knowledge, tools, and experience from both internal experts and external providers to build and expand launch leadership capabilities will better position them to meet the challenges of today's and tomorrow's pharmaceutical industry.