Report from 'Partnerships'
April 16, 2008
Some industries simply move jobs to India. Simple. Done.
In pharma, the situation is more complex. John Balian, senior VP of global pharmacovigilance and epidemiology at Bristol-Myers Squibb (BMS) told the huge 2008 “Partnerships With CROs” conference in Las Vegas this week that his company has also had a more nuanced vision for outsourcing. Yes, ship the jobs. But retain significant amount of in-house expertise and control over the process in the home office.
That’s not the only thing that has changed about drug safety, Balian says. Drug safety is a huge, ongoing story—a potential black eye that awaits any company in the industry. “The image is very difficult to clear up once it happens,” says Balian.
The predicament of the industry is familiar, with key stakeholders in the public, political world and regulatory community having lofty expectations. Balian summarized it adroitly. “We don’t know everything about a product when it comes to market. But those stakeholders have the expectation that we do. Hence the ire when things go awry.”
Safety Not A Sacred Cow
When BMS took a long, hard look at pharmacovigilance, it realized opportunities and efficiencies could be harvested abroad. One of the key advantages was operational excellence.
In the U.S., the safety effort at BMS (and elsewhere) was frequently the subject of regulatory inspections and general anxiety. “The number of audit and inspections are increasing. The breadth of the inspections is pushing at the limits. More items are getting inspected, and more items in detail,” says Balian. “I don’t know that any company has escaped a scathing report.” Since globalizing, he reports, the company has had glowing audits and inspections.
In such a climate, one approach might be to slowly and carefully fix one element of the process at a time, carefully refining it over time. That is the industry’s usual way. “That is not necessarily a recipe for success in this environment,” Balian said. Something more rapid, even radical, was necessary. “In Bristol-Myers Squibb, we challenged that culture and decided on a dynamic and direct approach. We decided we are going to innovate and create value.”
Getting It Done
After going through the usual vendor-selection exercise, BMS picked Accenture and Chennai, India. The results have been beyond expectations, Balian said. “We have no backlog. Our cycle times, which used to be in the 12-day range, are in the 2-3 day range. Globalization was a catalyst for change. It gave us access to global talent in knowledge management. We have tripled productivity.”
In short, Balian suggested, going to India is not just about finding lower costs. It’s about reconfiguring a process (even one as sensitive as pharmacovigilance) and building a sufficiently large, skilled team to raise productivity a quantum level, something that didn’t seem possible in the U.S.
In response to a question from the audience, Balian said there had been no wholesale transfer of key expertise to Accenture or India. “We didn’t do 100 percent outsourcing,” he said. “We blended our headquarters resources with the remote site. We’ve kept the core competency and the skilled resource we had in headquarters. There is no loss of knowledge of the compounds we have, of the process we have. That was a prerequisite for us.”
So Accenture finds the people and hires them, but BMS takes over their training. Indeed, in human, emotional respects, Balian insists the folks in India are treated as BMS employees and even think of themselves as such. “For all intents and purposes, they are an extension of us,” Balian says. “When we go and visit the staff, we treat them as BMS pharmacovigilance employees.”
It sounds like a new aspect of the Accenture-BMS relationship is brewing. He had hoped to announce the news in Las Vegas, but Balian told the audience to expect another announcement in May, 2008.
Balian made one point emphatically. He believes BMS does enjoy a short-term competitive advantage from faster insights into drug safety. That lead will fade, he said, not only because other companies will also elevate their performance and use outsourcing. But the determinant of a long-term edge for BMS will be found in the ability to truly collaborate across borders, not just move work around the globe. “In the future,” Balian says, “competitive advantage will not be in globalization. It will be in transparency and collaboration.”