Cross-functional R&D strategy and design

Cross-functional R&D strategy and design

Many global pharmaceutical firms are reconsidering their business models. Myriad concerns that pharmaceutical companies face include a broad range of obstacles.  There is constant pressure from payors to reduce costs, in part given strangled government healthcare budgets, yet there is a need for innovations – to understand and adopt new technologies – which often comes at a supplemental / incremental cost.   Firms are also exposed to challenges to traditional pricing mechanisms by empowered stakeholders, both patients and payors.  Meanwhile, the regulatory maze in many parts of the world – with the European Union being a glaring example – is tough to navigate, with unique rules and varied outcomes depending on national policies, issues, and bureaucratic processes.

Compounding these obstacles is the internal culture of most pharma companies. This is an industry that has long operated through disparate components — silos that separated R&D, commercial, production, and supply chain. And, in turn, the “Chinese Walls” – the metaphorical and seemingly insurmountable barriers that constrain the effective passage of information and communication across the organization – are disconnected from external-facing functions responsible for managing relationships with regulators, policymakers, the medical community, and the rest of the industry.  These silos can obstruct patient access and breed inefficiency and waste. They affect drug approval time and pricing, influence support for specific drugs by the medical community, and seriously hinder financial performance.

One solution is for pharmaceutical companies to restructure their operating models in a way that brings all these interdependent functions together. To accomplish this goal, they could (and should) build the organization differently, organized not by function but by goals. These teams would be directly responsible for gathering information, developing insights, and drawing up strategic plans around business functions that are often overlooked: regulatory affairs, pricing and market access, government affairs, and medical affairs. These four categories form the sub teams of a pharma company’s goal-oriented team.

Rather than having knowledge buried in other pharmaceutical functions — an inefficient and ultimately unsatisfactory approach — the goal-oriented team would be independent but cross-functional, working closely with R&D and pharmacovigilance; sales, marketing, and key account management; and supply chain.  A primary task of the critical team would be to make sure that each function is aware of what the others are doing and benefits from the knowledge of the team.

As a concept, the ideal of goal-oriented teams is not new; most pharmaceutical companies already rely on experts in external healthcare industry activities for ad hoc strategic advice and direction. But that does not go far enough; it fails to apply the structure as a bridge across key functions. Thus, the ability of the team to effectively advance the needs of the entire organization is significantly diminished.

Firms need to look through the lens of goal-oriented activity, allowing management to reflect on how connected and effective the company’s current critical team is and how the organization can improve its capabilities by fully leveraging its team.

If your R&D function struggles with siloes, and you think you could benefit from goal-oriented teams, we could help.

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