Maverick moves
We noted with great interest yesterday news in /The Star-Ledger/ in New Jersey that Hoffman-La Roche plans to drop its membership in the Pharmaceutical Research and Manufacturers Association (PhRMA), the leading US industry association lobbying for pharma interests in Washington and beyond.
By on Jun 30, 2009We noted with great interest yesterday news in The Star-Ledger in New Jersey that Hoffman-La Roche plans to drop its membership in the Pharmaceutical Research and Manufacturers Association (PhRMA), the leading US industry association lobbying for pharma interests in Washington and beyond.
Likewise, the Financial Times is reporting the company also has plans to drop its membership in the Association of the British Pharmaceutical Industry (ABPI).
Instead, as part of its take-over of Genentech, Roche says in the US it will join the Biotech Industry Organization (BIO).
Genentech and Roche believe BIOs purpose is closely aligned with the direction of the new company and, therefore, can represent the companys interest in Washington, spokeswoman Darian Wilson said in a company statement released last week.
The Star-Ledger quite rightly painted the move as an effort by Roche to sever its ties to Big Pharma.
It is a defection whose importance is made clear by the efforts put forth by PhRMA to keep Roche onboard. Billy Tauzin, president and CEO of PhRMA, told the Star-Ledger that the group sent its chairman, AstraZeneca CEO David Brennan, to Roches headquarters in Basel to make a personal appeal to Severin Schwan, Roches chief. But in the end, Tauzin says, the Genentech forces, who feel they are different, won out.
But attempting to be different than the rest of Big Pharma may make sense if youre Roche or any other company looking to survive and thrive in the reality that is todays pharma marketplace. Lets face it, the industrys not terribly popular (deserved or not) with consumers, governments, activists groups and the list goes on.
I liken Roches move to the strategies Southwest Airlines has employed over the years to set itself apart from the rest of the US airline industry. Southwest, arguably the most successful US airline now or ever, has built its business on being different, bucking the group think, stick-together-as-we-push-ourselves-over-a-cliff mentality embraced by all the other airlines.
When everyone else in the US airline industry rushes to raise fares and tries to one-up each other on who can charge more, Southwest lowers theirs. When the industry suddenly decided that charging exorbitant fees for carrying checked passenger baggage somehow made for smart strategy, Southwest said not us. They fly out of alternate airports, run local shuttle type flights and do a whole host of other things the rest of the US airline industry would tell you amount to flirting with certain death.
But Southwest remains the most profitable, stable and highly respected airline in the country precisely because they are not like the others.
Roches move to distance itself from the Big Pharma pack is, in this industry watchers opinion, is an incredibly smart one if they leverage it well. Its a unique opportunity for Roche to paint its newly merged company as a different breed of pharma, with different priorities and commitments to its stakeholders. Its the ultimate opportunity to pull a Southwest and break free from the lemming mentality that so often seems to rule pharma.
Lets see