The Pharmaceutical Research and Manufacturers of America’s (PhRMA) announcement earlier this month that current President and CEO Billy Tauzin will step down at the end of June has raised the question of who will lead the association representing the innovator-drug industry. PhRMA says that it has already begun a search, so what are some of the key issues that the association should consider in finding a new chief policy advocate?

To answer that question, we should first consider the tenure of Tauzin. Tauzin joined PhRMA in 2005. He was formerly chair of the House Energy and Commerce Committee, where he was instrumental in securing passage of the Medicare prescription drug bill. He served in the House of Representatives from 1980 to 2005, first as a Democrat from 1980 to 1995, and later switching to the Republican party in 1995. He left Congress in 2005 to join PhRMA.

Tauzin perhaps will be best known for the position that PhRMA took on healthcare reform, a position that has drawn both praise and criticism depending on one’s policy position. PhRMA was an early supporter of healthcare reform and offered a policy commitment of $80 billion over 10 years to close the so-called “donut hole” or gaps in Medicare prescription drug coverage. Some say that position was well-taken given the once-considered inevitability of passage of healthcare reform. But with the future of healthcare reform now murky, some critics would argue that it was too large a concession for the industry to make. On the opposite side, however, critics of PhRMA would argue that the group’s policy commitment of $80 billion was too small a concession and precluded other possible measures in healthcare reform such as pricing controls and related mechanisms. Notwithstanding healthcare reform, important policy victories from a PhRMA perspective under Tauzin’s tenure include blocking passage of a legislative proposal that would have approved prescription drug re-importation and data exclusivity provisions under biosimilars legislation.

But what should the next head of PhRMA consider? The list undoubtedly includes healthcare reform and the different shape final legislation will take as the House and Senate work to reach consensus on measures and/or perhaps restart the legislative process as well as policies relating to intellectual property, patent reform, and biosimilars. Other important issues include funding for and the future policies of the Food and Drug Administration and other federal agencies such as the National Institutes of Health in supporting pharmaceutical research.

But perhaps more than anything, the new head of PhRMA has to realize that the pharmaceutical industry of 2010 is not the pharmaceutical industry of years past. In fact, even the term, “Big Pharma,” a phrase commonly used to describe the membership of PhRMA, is, itself, becoming anachronistic. The “Big” still applies in terms of the financial strength and revenues of individual companies, but the “big” blockbuster drug model that supported those revenue positions is eroding and is being supplanted by a changing paradigm for drug development that is focused on products for smaller and more targeted patient populations. This shift in focus in product development parallels an intensification of biologic-based drug development.

PhRMA and its member companies now describe themselves collectively and individually as “biopharmaceutical” companies, reflecting the increased importance of biologic-based drugs in their strategies. The defection of Roche from PhRMA to the Biotechnology Industry Organization, which represents biotechnology companies, including small companies, following Roche’s acquisition of Genentech in 2009, reflects the changing nature of the industry. PhRMA’s decision in 2009 to form a committee and broaden its membership to include small biopharmaceutical companies also reflects this focus. The next head of PhRMA has to understand these industry dynamics in developing policy and adapting the association in order to maintain its relevance.

Also, the new head of PhRMA will have to take into consideration trade, tax, and regulatory concerns that will affect the industry’s position internationally, specifically in emerging markets, which are a source of strong growth and a strategic focus for the large drug companies. The new head of PhRMA should not only consider the economic implications of US policy but has to broaden his/her focus to better understand the pharmaceutical industries in emerging markets and better engage and work with the stakeholders—other trade associations, regulatory agencies, scientific and healthcare associations, and companies in those markets—on behalf and with its membership.

So perhaps the question is not who will lead PhRMA, but more importantly what “Big Pharma” wants its next leader to be?