Managing NPD Process R D Management Conference

This Paper is intended to share the experience of an academic-industry liaison to facilitate the process of managing the Research and Development endeavour in the new product development process (NPD) for a major pharmaceutical company, say ABC Ltd. Prof. Ajay Parasrampuria1, Prof. Anil B. Kulkarni2 and Asok Kumar Kar3

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All at the S.P. Jain Institute of Management and Research, Munshi Nagar, Dadabhai Road, Andheri (W), Mumbai-400058. India

[New Product Development (NPD) in the Pharmaceutical industry is a key driver for growth. ABC Ltd.(original name changed) engaged Center for Project Management for developing competency in managing NPD projects. An exploratory study was conducted to assess the situation. Criticality in terms of time to market and managing uncertainties in the NPD process remain a challenge for ABC Ltd.  A series of educational intervention were designed keeping in mind business objective across all levels. The scenario was quantified from the perspective of bridging the R&D strategy and operation processes involved in NPD.A select group of middle level mangers across functional areas followed by senior mangers were trained in knowledge and skills in the discipline of project management and portfolio management. The objective was to facilitate the process of transformation in the organization to improve execution capability by using not only just project and portfolio management techniques, but also the Management by projects paradigm.

The initial result after the educational intervention shows that the organization experiences more coherence in teamwork, role clarity and assigned responsibility, better co-ordination between functional units, enhanced control and more realistic assumptions in the NPD process. Competency building through snowballing effect can percolate down to all the levels across the organization.]

1. Introduction
This paper is intended to share the experience of an academic-industry liaison to facilitate the process of managing the Research and Development endeavour in the new product development process (NPD) for a major pharmaceutical company, say ABC Ltd (original name changed). The pharmaceutical industry in India is in the front rank of India’s science based industries with wide ranging capabilities in the complex field of drug manufacture and technology. The Indian pharmaceutical market, which consists of almost 20,000 manufacturers, was valued in 2000 at US $ 3.8 billion, or only 1.1 percent of the global market. It grew by 10.4 percent over 1999. Although India accounts for 16 percent of the world population, the sale of pharmaceuticals is just 1 percent in terms of value and 8 percent in terms of volume. However considering the R&D scenario the proportionate expenditure on R&D is minute when compared internationally.

With a growth rate of above 10 percent annually for the last ten years, which is well above the industrial growth rate of India, this industry is a net foreign exchange earner for the country. India exports both bulk drugs and formulations. Initially bulk drug exports were greater in value terms than the exports of formulations but since 1995 the exports of finished formulations have overtaken the exports of active bulk ingredients.


The major players in the industry have constantly shifted towards competing in regulated markets in order to expand their market size. At the same time the completion in term of first-to-market or rather first to file with the regulatory authorities has became a key to success.  Managing risk and time to file is critical in this industry.

In March 1999, the government formed a Pharmaceutical R&D Committee to recommend the measures necessary to strengthen the R& D capabilities in the pharmaceutical sector and determine the support needed for domestic R&D initiatives. The report of the committee says that:
“The pharmaceutical industry is intensely knowledge driven. Its intellectual assets are the key determinants to its competitiveness. A higher level of innovation and IPR (Intellectual property rights) management coupled with strategic manufacturing and aggressive marketing will determine Indian Pharma Industry’s future.”

In this changing scenario the healthcare market is undergoing rapid transformation. The traditional delivery of health care is being challenged, as is the procurement, dispensing, and utilization of pharmaceutical products. The emergence of third-party financiers of pharmaceutical products has created new decision makers with different needs.

This led to many Indian Pharma organizations to develop their capabilities to expand business in regulated markets like United States and Europe.
3.    Identifying the challenges at ABC Ltd.
ABC Ltd. engaged the Center for Project Management, an initiative of a premier management and research institute of India for development of competency in managing the NPD projects more effectively. The basic reason for selecting NPD was the organization’s needs to generate a strong international presence.

In the first phase of a five-month association with the ABC Ltd., an exploratory study was made to identify the focus areas based on strategic business objectives of the organization.

The study revealed that coordinating multiple functional units, lack of process ownerships in the conventional line sequential process framework resulted in delays, lack of role clarity, team-work issues and cost over runs. In some instances, this ultimately resulted in loosing the opportunity of first to file. ( To register the generic drug development and formulations with appropriate regulatory bodies for the purpose of marketing the product.)