Press Release
Pharma Executives Bullish on Companies, Industry for 2010: TGaS Advisors 2010 Confidence Index
East Norriton, Penn., March 1, 2010 – Heads of Operations at 20 of the leading large, mid-tier and specialty pharmaceutical companies gave a thumbs-up to prospects for 2010, both for their companies and the pharmaceutical industry. The annual TGaS® Advisors Confidence Index, now in its third year, reported an 18.6 percent rise in their perceptions of the future of the industry, rating them at 70 on a scale of 1-100 compared to 59 last year. Confidence in their own companies grew 10 percent, from 69 in 2009 to 76 this year.
The findings are summarized in a White Paper issued by the benchmark and advisory services firm, “TGaS Advisors Confidence Index: Best Prognosis in Three Years.” The Confidence Index captures senior executives’ assessment of the future of the pharmaceutical industry and their own companies, given a three-year time horizon. It is drawn from TGaS Advisors’ “Annual State of Commercial Operations,” a collaborative peer-set benchmark of 32 large-tier, mid-tier and specialty pharmaceutical companies conducted each year. TGaS Advisors also compared the Confidence Index to stock prices (normalized) of the participating companies. The numbers show that Wall Street isn’t quite on board yet, but at least the numbers are headed upward.
Stephen E. Gerard, Managing Partner, TGaS Advisors, commented on the uptick in confidence: “Some of the fog that engulfed the industry and companies over the last few years has lifted, or at least cleared enough to afford some visibility and ease navigation. A ‘new normal’ is emerging, as pharma adapts to change and becomes more comfortable with it.” In his work with the top pharma organizations over the years, Gerard has seen companies grapple with the challenges and begin to figure out what will work in the coming decade.
Large-tier companies (those with a 3,000+ sales force) show a steady upward trend, from a 2008 low of 58 in their companies and 61 in the industry to this year’s optimistic company rating of 76 with 73 for the industry. Gerard said, “They have been through the ‘shock and awe’ of the last few years, analyzed and streamlined their operations and have come through stronger.”
Mid-tier pharma (500-3,000 in the sales force) experienced some of the deepest swings of confidence, from a 2009 low of 65 for companies and 52 for the industry, rebounding this year to 73 for both company and industry.
Specialty pharma displayed more confidence in their companies’ future than any other sector. Often characterized as the future of pharma, with their focus on niche markets and specialized patient populations, this sector started high in 2008 with 84, dipped to 75 in 2009 and climbed back up to 81 for 2010. Much less sanguine about the industry, specialty pharma ranked it at 65 for 2010. Respondents gave several reasons for their ratings. Primary reasons for optimism included aging of the population, evolution of the science, growth of global markets, new commercial models, the move toward a customer-centric approach, specialty companies’ strong pipeline and market focus and mid-tier companies’ agility. Chief worries of benchmark participants were the uncertainties engendered by healthcare reform; concerns for return on capital; longer approval processes; unknowns in FDA regulations, approvals and importation; larger products going off-patent, and increasing compliance issues that affect day-to-day operations.
Gerard concluded: “We are pleased to see the increase in confidence among all sectors of the pharmaceutical industry. This underscores the importance of strategic planning and direction at the Operations level, enabling companies to shift direction with greater agility than ever before as this transformative year unfolds.”
About TGaS® Advisors
TGaS Advisors, ranked in the top 50 among U.S. Business Products & Services companies by the Inc. 500, is the leader in benchmarking and advisory services to the pharmaceutical and biopharmaceutical industry. The TGaS Advisors roster includes the top 10 and the majority of the top 50 pharmaceutical companies with operations in the U.S. market. The firm’s benchmarking and advisory services suite of solutions, PharmaStance®, provides clients with a way to measure where they stand with respect to their organizations and answers the question, “How do other pharmaceutical companies do ‘it’?”® TGaS Advisors is based in East Norriton, Pennsylvania.