Life Sciences and Healthcare Services

The withdrawal of several high-profile pharmaceuticals from the market and some well-publicized problems with a number of medical devices have greatly magnified public concerns about the safety and efficacy of therapeutic products. The new administration in Washington is pushing for government-funded comparative effectiveness studies. CMS and private payors are more reluctant than ever to offer reimbursement for “me-too” products. Non-inferiority isn’t good enough anymore.

The FDA has grown more cautious and, as drugs increasingly target intractable diseases and medical devices become more complex, clinical trials have lengthened, slowing all-important time-to-market. Consequently, post-release monitoring is increasing markedly, requiring companies to be able to respond to concerns more quickly.

In this demanding environment with the well-being of patients and hundreds of millions of dollars at stake, developing outstanding regulatory leaders has never been more important – or more difficult. With demand for capable, committed regulatory leaders now outstripping supply, companies face a new regulatory dilemma: finding and building the talent to lead one of their most critical functions.

Why the Shortage?

The factors underlying the shortage lie in the nature of the role, the characteristics of the people who gravitate to the regulatory function, and conditions in the external market for regulatory talent. Those factors include:

The tendency of regulatory executives to stay put
In our experience, many of the people in regulatory enter the function early in their careers and tend to stay there. A scan of regulatory leadership at the largest pharmaceutical and medical device companies reinforces the point – only one person in the top 20 companies has held a non-regulatory position in the last 10 years. That is partly by choice. Of necessity, regulatory executives tend to be risk-averse, an admirable quality that nevertheless might be seen as inhibiting their effectiveness in other areas of the business and therefore limits their opportunities outside of regulatory. Their mobility within the company is further limited by the fact that the experiences they have gained with the FDA and with a technology are often much more valuable in regulatory than in any other part of the business. Despite this staff stability, succession planning is usually far more difficult in regulatory than in other areas. Many of these executives are attracted by the technological side of the function, rather than the opportunity to manage and lead large groups of people. As one of our senior placements put it, “Regulatory people develop an affinity for a particular product space and technology and tend to not want to leave that space.” Therefore, they often don’t aspire to lead the function or see the need to develop deeper leadership capabilities.

In our experience conducting external searches for life sciences companies, we’ve also found that risk aversion often makes regulatory talent reluctant to move from one company to another even if the new job would offer expanded scope and responsibility. And in the cases in which regulatory executives do leave their companies, it is often for consulting firms where they can receive comparatively high levels of compensation while continuing to work at the technical level.

A career path that is perceived as limited
Observing the relative stasis of careers in regulatory affairs, ambitious, high-potential people outside the function often do not regard it as a promising path to the top. Again, as we look at the top business leaders of pharmaceutical and medical device companies, almost none of them have had direct experience in the regulatory function.

The difficulty of the role
The mix of skills required to lead the regulatory function is extremely difficult to find. On the one hand, successful working relationships with the FDA are most often built on a reserved style, factual knowledge, and very open and direct communications. The perception that a person is trying to “sell” an idea to the FDA generally is not well-received. On the other hand, selling is what they often must do inside their companies – fearlessly delivering bad news, building support of top leaders, saying no, and making it stick. Such a range of personal styles and influencing skills is rare in any field.

The Attributes of a Good Regulatory Leader

Based on our experience working with top management teams across industries and on more than 25,000 management appraisals conducted during the past five years, we have developed a comprehensive competency model of leadership. Like any leader, the top regulatory executive should rate highly on those competencies. But because the role of regulatory leader is so difficult – and sometimes misunderstood by other executives – it’s imperative that life sciences companies also understand clearly the more fine-grained characteristics specific to regulatory leaders. Those characteristics include:

Respect for FDA processes and expertise
A good regulatory leader understands that the FDA is not an enemy to be bullied into submission or “sold” on a product. In general, the agency is composed of scientifically astute, well-intentioned people who take their responsibility very seriously. In any given therapeutic area, they have seen many products and submissions and are likely to understand issues better than any one company. While the agency cannot share competitive information, their questions and commentary are usually based on insights about other products. Through well-timed collaboration with the agency, an outstanding leader is not only likely to make more progress down the regulatory path but may also leverage the agency’s sometimes superior knowledge to avoid major stumbles. There will always be differences of opinion as the interpretation of clinical outcomes is not as black and white as we all would like, but great leaders don’t turn those differences of opinion into battles of wills.

Attention to detail
This seems obvious, but as we’ve talked to former FDA staffers it is surprising how many companies get things wrong. Company data on important numbers in regulatory submissions are frequently inconsistent within their own documentation. If there is any area where a regulatory leader needs to be ruthless, it is in attention to the numbers and their proper documentation.

Good technical and clinical acumen
The FDA expects a regulatory leader to know the answers to their questions. If the executive appears to be merely a middleman between the agency and the company, the regulators may lose respect for the company and have a harder time accepting its claims. Just as importantly, technical and clinical expertise also enables the leader to ask the right questions of the FDA and of the company’s personnel. In an industry where time-to-market is critical, companies cannot afford the luxury of a long learning curve for the regulatory leader.

Communication skills
As we’ve already noted, the regulatory leader must have a chameleon-like ability to work collaboratively with the FDA and speak up forcefully within the company. Further, because technologies are increasingly complex, writing skill is at a premium. The ability to describe things simply and concisely is extremely helpful in working with the FDA as well as inside the company.

Collaboration and Influencing
As with other functions involved in product development, the more connected the regulatory function is, and the more that all functions are working from the same set of information, the faster the product gets to market and the more successful it is. Great regulatory leaders have an ability to demonstrate their value, build bridges to other functions, and influence decisions at an early stage.

Taking Appropriate Action

Given the nature of the regulatory talent shortage and the characteristics that successful regulatory leaders need, the answer to the challenge clearly lies in internal talent development. With few exceptions, companies will nurture the next generation of regulatory leaders in-house, rather than seek them elsewhere. They can begin by adopting the following best practices, which a number of leading companies have already undertaken:

Give the leader a seat at the table
Too many companies still treat regulatory affairs as an administrative or service function. This is not a sustainable assumption; instead, the commercialization strategy for taking a product from development to market should be tightly integrated with regulatory strategy. With so much at stake, it’s a mistake not to include the regulatory leader on the top strategic team.

Make the position more attractive
In addition to visibly bringing the regulatory leader into the top leadership teams of the organization, life sciences companies can make the position more enticing by making it part of management development rotations early in the careers of high-potentials, keeping in mind of course that some – but certainly not all – regulatory roles require detailed technical knowledge. For example, advertising and promotion is an area where rotations would be more consistent with developing people along existing career paths while giving them exposure to the broader regulatory environment. As more future leaders gain direct experience in the function, stronger connections to the broader organization will grow and the ability to use regulatory to best business advantage will advance. Further, compensation should be commensurate with the importance of the position – and make jumps to consulting less attractive.

Establish a leadership competency model for the role
Every business leader should demonstrate capability in four competencies: strategic orientation, team leadership, results orientation, and collaboration and influencing skills. Regulatory leaders are no different but they must also be strong in people and organizational development skills, and of course specific functional expertise. It is essential that life sciences companies codify these leadership competencies into specific, observable behaviors that can drive continued development and the ability to identify people who are a potential fit.

Look across the organization
Once a valid and function-specific competency model is in place, it is then possible to look across the organization for people who could be a good fit. And if the position has truly been made more attractive, people who potentially fit will also be more easily steered in that direction. Companies will need to explicitly build this into their discussions about talent development and succession planning.

Create a structured development plan
Given the many complexities of the role, development planning is even more critical in regulatory than other functions. Good development starts with good assessment. First, use the best resources available to assess talent and identify strengths and weaknesses. Without a solid starting point, the rest is useless. Second, build on strengths instead of trying to fix every weakness. Great leaders maximize their strengths while finding ways to compensate or minimize their weaknesses. Too often though, development is solely focused on weaknesses. Third, think in a structured way about the nature of the development challenge and the available levers. Gaps in knowledge or experience are most easily addressed through self-directed learning, training, or on the job activities. As the issues get to more personal traits (e.g., “I don’t think of myself as a leader”) or issues of motivation (e.g., “I don’t enjoy having development discussions with people”) the activities have to shift to more direct one-on-one coaching and mentoring.

Experience is also critically important in regulatory, so companies must maximize their available shared knowledge. There must be structures to systematically disseminate information across the regulatory organization so that everyone can benefit from the experience. Keeping a retrospective on key lessons learned for each submission will pay dividends many years into the future.

Because global market presence is more important than ever, the development plan should include rotations to regions outside the US. Just as experience running global businesses is increasingly demanded of general managers, so should it be in regulatory leaders. Direct, in-market experience should become the norm, as opposed to the responsibility from a distance that exists today. We are already seeing some of the most forward-thinking companies adopt this approach.

Conclusion

It may seem counterintuitive that one of the world’s largest and most global executive search firms would advocate internal talent development, but that is exactly what we’re saying. The regulatory challenge will not be solved through executive search and the challenges are growing by the day. The life sciences industry absolutely must get this right – right now – in order to continue delivering value to customers and shareholders.

It is time to rethink regulatory.

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