30 January 2009 00:31 [Source: ICIS news]
SAN FRANCISCO (ICIS news)--Cost cutting is becoming more important to pharmaceutical companies as the industry can no longer rely on large returns from blockbuster drugs or negligible competition, a US consultant said at the InformexUSA conference, which continued through Thursday.
Such changes are typical as a new industry matures, said Chris Driscoll, a principal at Tunnell Consulting.
As the pharmaceutical industry matures, cost reduction is gaining prominence, he said.
Many cost-cutting programmes concentrate on production and business processes while overlooking its employees, Driscoll said. In particular, companies need to make sure their managers will adopt the firms’ new emphasis on cost reduction.
"Managers trump companies," Driscoll said. If the management believes that the cost-cutting programme is merely a nuisance, then the initiative will fail, he said.
In addition, some managers are technically oriented, and they are not necessarily good at leading change, Driscoll said. In fact, they can often heap on additional costs.
Such managers often adopt "gold-plated" compliance, which allows the company to comply with standards and regulations, regardless of cost, he said.
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