Are drugmakers all talk and little action? That's what Ernst & Young suggests in a new report. Big Pharma has been promising big changes in strategy, but there's little evidence they've actually, you know, shifted strategy. Most companies haven't even made the organizational changes prerequisite to their strategic overhauls.
The good news? The report also concludes that pharma is more focused on getting new products to market quickly and on jump-starting R&D than they are on simply cutting costs. That shows some future-focused thinking.
Apparently not enough for E&Y, though, which took drugmakers to task for relying on relatively small changes. Focusing on emerging markets, for one thing. Cutting sales forces, for another. Outsourcing admin functions as a third.
"Many of them have not ventured very far down the path of what their (stated) new business model is going to be, and some are still struggling to choose a direction," Mark Hassenplug, global pharmaceutical sector market leader at Ernst & Young, told the San Diego Union-Tribune.
That slow progress makes investors question whether pharmaceutical companies can pull it off, analyst Steve Brozak of WBB Securities said: "The people that got them in this position are the same people that are going to have to lead them out of this." And echoing some pharma execs as well as the E&Y report, Brozak also pointed out that the Big Pharma biz model is not only broken but can't be resurrected. Ouch.