According to the Hay Group in a story published in Fierce Biotech, you get what you pay for. That shouldn't come as a big surprise to anyone. When Hay looked at pharma's compensation policies for its top executives, it found that 88% were aimed at short term financial goals and only 12% were aimed at drug development and commercialization. Patent cliff anyone?
By contrast, biotech companies do a much better job a focusing incentives based on whether their drugs are approved and do a better job of highlighting R&D and pipeline measures. The Hay Group argues that Big Pharma should re-evaluate its compensation incentives for top executives to focus more long term, especially for an industry with very long development and commercialization cycles. This is particularly true in a period where the competitive environment has intensified dramatically and on a global basis.
Posted by Bruce Lehr March 21st 2011
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