Pharmaceuticals & life sciences

CEO interview quotes

"So the most important capability for a CEO working in healthcare is to be sure that everything is geared towards advancing patient care globally. The mission of an innovation-based healthcare company is to advance patient care. If you do that, then you will deliver on the bottom line."
"Talent diversity is an important component to the success of a knowledge-based company like Johnson & Johnson. We have a clear idea that diverse teams are more creative, bring more ideas to the table, and make better decisions. We believe that by having diversity of thought, different perspectives, and healthy challenges, the quality of what we do is going to improve."
"When partnering with technology companies, it’s a broader area, including big data, sensors, and computing. Therefore we are beginning to understand how technology companies and healthcare companies like Johnson & Johnson can collaborate and create value. It’s new, it’s different, and it’s not the same path that we take with life science companies."
"The only thing that ensures large bonuses for successful companies is innovation. The more breakthrough innovations it takes to market, the better a company's economic prospects will be."

Pharma & life sciences CEOs are confident of revenue growth, despite being more worried than CEOs in other sectors about disruption to their industry. They are beginning to explore other industries and looking for new ways to compete. They’re focusing on adopting digital technologies, developing diverse and dynamic partnerships and tapping new talent pools to find people with the skills they need.

Moderated optimism

Pharmaceuticals and life sciences (pharma) CEOs broadly agree with their counterparts in other industries about the global economic outlook: 48% think the economy will stay the same in the next 12 months, but 36% believe it will improve (versus 44% & 37%, respectively, of the overall sample). The vast majority of Pharma CEOs are also confident of generating higher revenues in both the short and longer term. They’re looking to the US, China, Germany and Brazil to achieve this growth.  

Disruptive megatrends causing concern

But two-thirds of Pharma CEOs think the constraints on growth have risen in recent years. Over-regulation, pressure from indebted governments trying to curb costs and geopolitical uncertainty are major sources of concern.

Moreover, Pharma CEOs are even more nervous about the disruptive forces reshaping their industry than CEOs in most other sectors. They fear tighter regulation, greater competition from new and old rivals and changes in distribution channels, in particular. They’re less worried about the shifting spending patterns of consumers, since medicines aren’t a discretionary purchase.

New rivals from other industries

More than half of all Pharma CEOs anticipate greater movement between sectors in the next few years, as players in one industry enter another. They expect the competition within their own industry to come primarily from technology, healthcare and retail and wholesale distribution companies.

Nearly half of all Pharma CEOs have also been looking further afield themselves: 26% have already entered a new sector, while 18% have considered doing so. Yet such pioneers are still relatively rare. A full third of the CEOs in our overall sample have already made the leap into other industries, so Pharma CEOs are lagging behind their counterparts in this respect.

Capitalising on the power of digital

Most Pharma CEOs have been investing in digital technologies to create new value in new ways. They believe that mobile technologies for engaging with customers, cybersecurity systems and data analytics offer the greatest potential. They see less value in socially enabled business processes or new manufacturing technologies like 3D printing. But they’re increasingly anxious about the speed at which technology is evolving: 50% expressed concern on this score, up from 32% in our previous survey.

That’s not stopping Pharma CEOs from pressing ahead with the digital transformation of their companies. And they say they’re already reaping significant benefits in terms of digital trust, operational efficiencies and the ability to innovate. But they warn that maximising the value of a company’s digital investments takes considerable effort. Above all, it requires a clear vision of the competitive advantages digital technologies can deliver and a CEO who personally champions their use.

Diverse alliances, different working ways

There’s been a marked increase in the number of Pharma CEOs planning to form a new alliance this year. Most of them want to partner with academia, suppliers, customers or governments, largely to get access to new technologies and customers and to become more innovative.

The number of Pharma CEOs planning to hire more people has also risen sharply. Yet Pharma CEOs worry less than CEOs in other sectors about the availability of key skills, despite the highly specialised nature of their industry. That said, nearly three-quarters of all Pharma CEOs are now casting their nets further and searching for talent in different areas. Nearly two-thirds also have a strategy for promoting talent diversity.

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