To state this more bluntly, it can be said that the people who set such strategies are, or have become, complacent, intellectually ossified, incompetent, or a combination thereof.
It is also true that leadership starts at the top. In terms of setting such strategies, I believe the management mysticism that says anyone with an MBA and some experience running a company of some kind or other can run a pharma is a fool's recipe for disaster. And an investor's nightmare, unless the person, politics, and leadership structure including the Board is very, very good. Of course, if the Board itself is compromised with people whose biomedical backgrounds are nil, then all bets are off.
It should be noted that if articles such as this one reflect reality ("Why Most Published Research Findings Are False", John P. A. Ioannidis, PLoS Medicine, 10.1371/journal.pmed.0020124 ), then pharma is really in trouble.
Big Pharma needs to overhaul risk assessment
Investing in the pharmaceuticals industry carries 50 per cent more risks than in the overall S&P 500, because Big Pharma's management of operational risks has lagged behind dramatic business and reputational shifts, a new report says.
Drugmakers' comparative riskiness, influenced by factors such as price controls, litigation, sales practices, restructuring and product safety, underscore investor concern that the pharmaceutical sector is no longer a defensive investment. For decades, investment in drugs companies was considered safe in all economic climates, because people always fall ill.
The report by KPMG, the consultancy, to be released later this week, says drugmakers must change their risk management processes quickly. It argues that the industry has become too intellectually rigid in assessing risks, thinking in terms of compliance instead of risk prevention ... "Positive and negative events in this industry are extraordinarily pronounced, with a dramatic effect on shareholder value and reputation," the report says. "The challenge now for the industry is that the upside seems harder to achieve, while on the downside there are a growing number of risks and potentially greater impact."
... Two recent problems highlight the industry's challenge. The biggest is Merck's withdrawal of Vioxx a year ago after finding increased heart attack risk, forgoing $2bn in annual sales and potentially attracting billions of dollars in liability. The company faces questions over its actions to market the drug since its launch in 1999. The other is Bristol-Myers Squibb's restatement of $2.5bn in revenues after inflating wholesaler inventories to meet profit targets a few years ago, ending with a settlement to avoid federal criminal charges.
KPMG's report says the industry must move to a more comprehensive risk strategy, to foresee problems that could emerge anywhere in a company.
For it would mean that new discovery techniques such as bioinformatics, where multiple groups are seeking low pretest-probability low relative-risk data/clinical relationships under situations of intense financial and other forms of pressure that can cause bias, are - to put it bluntly once again - basically an expensive fraud.