When it comes to financial planning in the pharmaceutical industry there are five common mistakes that must absolutely be avoided. To understand how to remedy these mistakes, it helps to realize that one is an overarching problem in pharma financial planning, and the other four are contributing problems to this. They are:
Failure to implement systems to enforce accountability and timeliness
The first item is the overarching problem. By attending to items 2 through 5 you will go far toward remedying the problem of sticking to stagnant financial strategies. It’s important to have a flexible and responsive method of creating your annual financial plan because there are many changes to the industry that will affect you each year. Health fads, environmental hazards and responses to them, and people’s behaviors are all subject to change. Further, new research may emerge affecting the medication prescribed by the physician. These are just a few of the reasons that you must take a careful look at your annual budget and resist the temptation to recycle the same plan year after year.
Hopefully, earnings goals can reasonably be aimed higher this year than last year. It will be necessary to take a close look at the market and discover where trends are leading, who is investing in what, and what innovations the research community has delivered. A degree of prescience may be required, but if you know the market, you’ll have it.
Guessing is off the table. There is a host of analytic tools available for use today- and there are many services out there who specialize in pharmaceutical market analytics. It’s been said by specialists that there is no such thing as perfect guidance. But when your team is shooting in the dark, some guidance is better than none.
Accountability and Timeliness Systems
Assign specific tasks to specific team members with guidance according to actions and time constraints. Every complex project can be simplified by breaking it down and handling it in bits. So, it is wise to assign different parts of the financial plan to different members of your team. This will help to reevaluate accountability and scheduling in reviews.
Whether it’s fear or a lack of imagination that keep so many organizations from breaking away from previous financial plans, the truth is that the problem has reached epidemic proportions. That’s good news for those who manage to break the spell, as they will easily stand out from the rest- but bad news for those who fail to break away from worn out and overused financial planning patterns.