You've no doubt seen the press: "Big Pharma Faces Grim Prognosis;" "Big Pharma's Tough Medicine;" "Pharma Forecast Calls For More Of The Same;" "Health Care Industry Braces For '08."

Different headlines, different articles… same story. Everywhere you look, the media — and many in the industry — are singing the same song: "It's a grim future for Big Pharma."

On the surface, certain facts appear to be undeniable:

• Generic competition will wipe $67B from the annual sales of the top pharma companies between now and 2012. (Wall Street Journal).
• During the five years between 2002 and 2006, our industry brought to market 43% fewer new chemical-based drugs than it did from 1995–1999. (Wall Street Journal).
• In 2007 alone, drug companies eliminated more than 30,000 jobs. (Fortune).

None of this is a matter of debate. We know which patents on which drugs will expire when. We know what's in the pipeline now. We know the NME approval process and we know the acceptance ratios. Put it all together, and it's a simple matter to calculate the economic impact to the industry that these and other truths will deliver.

I'm not trying to sit here and deny that there are challenges. But a death blow to our industry? Not so fast. Take several steps back for a moment and you'll see that even more undeniable than the bad news of the daily grind are the counterbalancing effects of the coming megatrends.

Megatrends that will lift our industry further and faster than ever before. Consider:

• The global pharma market is projected to grow to $1.3 trillion by 2030. That's more than double today's value. (PharmaVoice)
• In the US, total healthcare spending is currently $2 trillion, and expected to double to $4 trillion by 2016. In the process, healthcare's share of GDP will increase from 16% to 20%. (Boston Globe)
• Spending for chronic conditions — cancer, heart disease, hypertension, mental disorders, diabetes, pulmonary conditions, etc. — is currently $1 trillion annually. That's expected to grow to $6 trillion by 2050, and doesn't even include the number one chronic disease: arthritis (currently affecting 46 million adults). (Milken Institute)
• The E7 countries will grow to more than 1/5th of the total pharmaceutical market by 2020, reflecting in part the increased health care spending that goes hand-in-hand with increased prosperity. (PharmaVoice)
• And on top of everything, throw in a growing, aging and more prosperous global population, and the demand for the kinds of therapeutic interventions offered by the pharma industry becomes apparent.

Take a longer term view, and suddenly many of today's top pharma trading values look like a bargain. The fact is, and despite the field day that the media and Wall Street have had of late with our industry, much of the strategy being deployed appears to be sound, when viewed with a long term perspective.

Writing in the Harvard Business Review, Christian Stadler, an assistant professor at the Innsbruck University School of Management, identifies "Four Principles of Enduring Success;" principles which he says "separate great companies from the merely good."

Although not specific to healthcare, the four principles that Professor Stadler highlights are already being applied by many in our industry:

1. Exploit before you explore. The great companies emphasize exploiting existing assets and capabilities before exploring for new ones. This doesn't mean being against R&D, but it does mean getting every last nickel out of your existing assets. So while pharma is constantly criticized for its proportion of S&M spending, maybe it's not such a bad strategy after all.
2. Diversify your business portfolio. Great companies know when to diversify by carefully stitching together a varied group of suppliers, partners and acquisitions. On this point, we see serious attempts by pharma companies to license product development, promote authorized generics, make strategic acquisitions, and invest in generics, diagnostics, and a variety of healthcare practitioner, consumer, and payor activities.
3. Remember your mistakes. Great companies focus on mistakes as well as triumphs, and in doing so, use their own histories as training tools. Bill Belichick, coach of this year's undefeated New England Patriot's football team, is famous for finding and highlighting his own team's mistakes, within even its most spectacular victories.

   Pharma performance on this principle is difficult to assess; the perception is that mistakes continue to be repeated throughout the product lifecycle. One can only hope that systematic, continuous improvement processes are in place in conjunction with a culture that encourages self-evaluation.

4. Be conservative about change. Everyone seems to be looking for radical change in Pharma, and there's no shortage of criticism for what's often characterized as the industry's "glacial pace." As Stadler points out, however, great companies seldom make radical changes, and when they do, they take great care in their planning and implementation. Pharma's tendency to move cautiously is characteristic of companies with enduring success.

And finally, I'd add one of my own recommendations to Stadler's list: Develop and communicate a clearly articulated vision for where the company is going and what it will look like in the next five to ten years. Without such a vision, management and others below the C-Suite lack the context and urgency to make the necessary transformations over time. Organization-wide change — even if implemented conservatively — require context and clarity if there's any hope for successful implementation at all levels.

In summary, and as we head full-throttle into 2008, I think we'd all benefit from taking a long term perspective of our industry and its future. When we commit to capitalizing on the opportunities that the upcoming megatrends present, as opposed to simply managing against the downside risk of today's short term headaches, we will all see that the Pharma glass is, at a minimum, half full. As for me, I'm still buying.

For the treating physician, a thorough and clear understanding of the reasons behind a given patient's noncompliant behavior is enormously valuable. Is it because of side effects? Does the patient not have enough money to fill the prescription? Is the patient just too lazy/forgetful to stay on regimen?

Each of these underlying causes — along with the countless others which may lurk beneath noncompliant behavior — requires a different approach to correct. By placing all of these occurrences into a single, nonspecific category called "noncompliance," we have done little to solve the problem at hand.

"Is the patient noncompliant?," is only a triage question. It's like asking someone, "Are you thirsty?" For most people, there would be appropriate follow-up questions, so that the questioner can know whether to bring Coke, or tea, or vodka.

Bear in mind, however, that the follow-up is appropriately done by the treating physician… not a third party. We never want to get in-between the doctor-patient relationship by attempting to uncover the specifics of noncompliance; the survey-giver's role is to go back and communicate that the patient is "thirsty."

In practice, a patient coming into a doctor's office may not volunteer his or her noncompliance. When the doctor has a report in hand, however, it's much easier to engage the patient on the subject. From there, appropriate, physician-guided steps can be taken to return the patient to a treatment regimen.

InfoMedics Vice President of Analytics, Paul LeVine, will speak at the Direct to Docs Conference in Tampa, Florida, on Tuesday, February 12th.

Paul's topic, "The Only Message That Really Matters: How Does This Medication Work for My Patients?," addresses the importance of patient feedback.

Specifically, Paul will make the case for why providing structured responses to key questions about patients' experiences with a given medication is the only way physicians can confidently prescribe.