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Was going through some old materials on my desk and came across an article in SCRIP (No. 2559 21/7/00) discussing a report by INSEAD (the French business school) regarding the competitive fitness of firms. I though some of you might find this interesting.

INSEAD's survey covered 290 US and European firms, of which 29 (10%) were in the pharmaceutical or healthcare arenas. The report measured 12 capabilities to come up with an Overall Market Effectiveness Capability (OMEC) index. The 12 capabilities were:

Mission & Vision
Customer Orientation
Organisation & Systems
Human Resources
Corporate Culture
Planning & Intelligence
Technical Resources
Market Strategy
Marketing Operations

Before you ask, the article doesn't go into how those catagegories were defined or measured. (If you really want to know, you'll have to get the original report, which SCRIP says is available for the Pearson Education Distribution Centre, Slaidburn Crescent, Flyde Road, Southport, PR9 9YF, UK Tel: +44 1704 508080, Fax: +44 1704 506685.)

A score of over 65 was considered to indicate "world class" companies. The pharmaceutical industry average was 63, lower than "world class," and lower than the sectoral averages for automobiles, computers & electronics, consumer goods, and financial services.

The top score across the entire study was a tie, at 79, between Unilever and Schering-Plough. Schering-Plough outperformed the pharm/health sector in all 12 categories. The only other sector company in the combined top ten was Pfizer, with a score of 74.

The top 12 Pharma/Health sector rankings in the report were:

1. Schering-Plough: 79
2. Pfizer: 74
3. Johnson & Johnson: 73
4. Novartis: 72
5. Warner-Lambert: 72 (now part of Pfizer)
6. Fresenius: 70
7. Eli Lilly: 69
8. Novo Nordisk: 69
9. Glaxo Wellcome: 68
10. Bristol-Myers Squibb: 67
11. SmithKline Beecham: 67
12. Pharmacia: 65

Thought some of you might find this interesting as you mull over what to purchase, stockwise. All of these companies, while technically 'large pharma,' are major players in the biotech sector, both through partnerships, ownership of subsidiaries, and through in-house R&D.

BTW, as an aside, we mostly talk about biotechs with 1 to 5 products in the pipeline. In 1999 (I don't have numbers for this year) Schering-Plough had 73 products in its pipeline, Pfizer had about 127 (when you add in Agouron and Warner-Lambert's products), J&J had 76, Novartis had 90, Lilly had 66, Novo Nordisk had 26, Glaxo had 115, Bristol-Meyers Squibb had 73, SmithKline Beecham had 106, and Pharmacia had 66 (prior to absorbing Monsanto). That's a lot of stuff, ain't it?


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