Titans of the pharma industry are adjusting their sails to adapt to an increasingly VUCA world where volatility, uncertainty, complexity and ambiguity are the only constants. Daara Patel, Secretary General, IDMA, shares his views on the strategies pharma leaders should adopt to lead and stay relevant in a VUCA world, with Viveka Roychowdhury
What defines leadership in a VUCA pharma scenario?
To understand and accept that change can be sudden, as the recent invalidation of Rs 500 and Rs 1000 currency notes, and the ability to adjust to the change in national interest, is of supreme importance.
The pharma industry in India has been hit by turbulence at a pace that can be best described by the term – VUCA: volatile, uncertain, complex and ambiguous. Not only are the business leaders apprehensive but most new entrants and mid-career pharma professionals are equally apprehensive about their career prospects as well as the growth of the industry.
The pharma industry worldwide is facing severe challenges that it has never faced before. In India, the scenario is even more grim with regulatory, pricing and PR challenges. To name a few:
- En bloc banning of most FDCs
- NPPA crossing its brief by bringing more and more formulations under price control
- NPPA insisting on revised prices being made effective retrospectively.
- Serious regulatory issues with FSSAI
- Proposed amendment to definition of ‘New Drugs’ from four to 10 years.
- Taxation on pharma products to go up by at least three per cent due to implementation of GST. Either industry will absorb the increase which they can ill afford or the government increases prices which the patient can ill afford.
- NGOs targeting and attacking the pharma industry and accusing it of profiteering and acting against the interest of the patients.
- The Damocles sword – Total dependence on China for APIs which is more dangerous than going to war with China
- Lack of support to R&D.
Due to the above reasons there is a lot of uncertainty in the industry and further investments and expansion plans are stalled.
How have pharma leaders and corporations in established markets like the US, EU etc, changed their strategies?
The US, EU pharma industries are facing wide-ranging changes. Above all, the rise of emerging market economies and increasing price pressures on established pharma markets require extensive adjustments to pharma business models.
Despite a generally positive estimation of the current business climate, the global pharma industry faces various challenges that endanger their current and future business development. Nearly all of them consider themselves affected strongly by VUCA challenges.
What learnings do these paradigm shifts have for pharma leaders and corporations in the emerging markets like India APAC regions?
Leaders must provide clarity so that work assignments and goals are not as ambiguous as the environment. Ambiguity doesn’t paralyse workers; it makes them insecure and stirs them up. Competent employees, when faced with ambiguity, will do what they are most comfortable doing in order to feel as if they are contributing something appropriate. Doing something, whether it’s helpful or not, makes us feel good. A leader must provide clear direction and synchronise the efforts of others while continually communicating any adjustments.
Who are the new business icons for the pharma industry and why are they the new role models?
Leading in turbulence demands the ability to utilise all facets of the human mind. Even the most impressive cognitive minds will fall short in the VUCA world – it will take equal parts of cognitive, social, emotional, spiritual and physical intelligence to prevail. To be responsive and resilient, with the ability to ride out turbulent forces that cannot be avoided, and to pivot quickly to seize opportunity when it presents itself. The days of the single ‘great leader’ are gone. In the VUCA world, the best leaders are the ones who harness leadership from everyone.
Apart from other leaders, CEOs of multinationals in the West have a huge challenge in meeting growth targets. They are aware that bulk of their sales will come from countries like India, where prices of multinational companies are not affordable. It would be a real challenge for them to have a differential pricing mechanism in order to ensure that the sales targets are met and patients can also afford the medicines.