Written by Dr Brian D. Smith

I’m researching a new book about what our industry will look like once the great forces of globalization, biotechnology and market maturation have reshaped the pharma sector. One of the things that emerges is that the current industry landscape is itself the result of powerful political, economic, technical and social forces that strategic management geeks like me call the remote market environment. 


As an industry, we didn’t spring ready-formed from nothing. Rather, we’re a species that evolved out of the dyestuffs sector in the late 19th century. And the evolution metaphor goes further than that. Evolution is driven by changes in the environment and the late Victorian era was a remarkable example of such a change. New communications methods, closer political union, new science and sociological change all characterized that period, just as they do the early 21st century. The differences — telephone vs the internet, German unification vs globalization, for example — are ones of detail, not substance. Later, two world wars allowed the emergence of the US and UK pharmaceutical industries and technological revolutions and social development drove both supply and demand sides of the market. This story is captured very well in Alfred Chandler’s book, Shaping the Industrial Century,1 which I recommend to you. 



In a decade or so from now, I expect to be writing of some present-day Big Pharma firms in the past tense, about how their cultural inertia led to their demise.

But what relevance does this have for the pharmaceutical executive trying to understand and manage in today’s market? Well, as someone once said, history may not repeat itself but it does seem to rhyme quite a lot. It seems undeniable that remote environment factors will shape the future of pharma. How we create and deliver value in the next couple of decades will differ from how we have done it in the past. This will mean some firms changing to fit the new environment and others failing to do so. In a decade or so from now, I expect to be writing of some present-day Big Pharma firms in the past tense, about how their cultural inertia led to their demise. And I expect to be writing about other firms, perhaps names we don’t know at present, which have risen to bestride the industry like the legendary colossus. That seems to be the inevitable lesson to draw from the history of the industry. 


What we’d all really like to know, of course, is how to be one of the survivors and avoid being a footnote in the next edition of Chandler’s book. This is where the rhymes of history matter. The successes and failures of our industry ancestors tell us a lot about the general rules of being a survivor. Added to that, libraries full of management research tell us more specific stories about the way firms survive change, or don’t. And of course, I’m hoping that very industry-specific ideas will come “from the horse’s mouth” as I complete the interviews with industry leaders that I’m doing for this new book. Out of all that, I’m hoping some insight into the future of pharma will arise. I’ll let you know when it does.


Reference

1. A.D. Chandler, Shaping the Industrial Century: The Remarkable Story of the Modern Chemical and Pharmaceutical Industries, 1st Edition (Harvard University Press, 2005).



Dr Brian D. Smith runs Pragmedic, a specialist strategy consultancy.