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PhRMA’s Choice: A Man for All Reasons?

The Pharmaceutical Research and Manufacturers of America (PhRMA) has announced John Castellani as its new CEO and President. For the past 9 years, he has been the head of the Business Roundtable, a very successful association of corporate CEO’s.

History tells us that the choice of a new PhRMA President will reflect the Board’s view of the state of the industry and its most pressing needs. The new appointment continues that tradition.

At the outset, let me say that Mr. Castellani appears to be eminently qualified. He has roots in corporate America and has spent years steering a powerful association. He knows how to manage CEO’s. Early news coverage has characterized him as a manager, straight-shooter and non-partisan (although he mostly contributes to Republican campaigns).

However, there is more to his appointment. In a column earlier this year (link below), FDA Matters examined the past five Presidents of PhRMA, going back to the 1970’s. It is hard to imagine that the same association could be led by individuals with such different backgrounds. Yet, on examination, each appointment was appropriate for the industry’s needs at the time they were appointed.

Whether the PhRMA search committees have acted intuitively or consciously, their choices have been spot-on to what the industry needed.

In the earlier column, I stated: When his [Tauzin’s] successor is chosen, it will tell us a lot about how the pharmaceutical industry sees itself….and what the big pharmaceutical companies think is their next major challenge. I think there are two such challenges faced by the bio-pharmaceutical industry:

  • Strengthen solidarity with non-pharma industries, and
  • Preserve its status as a major domestic industry, despite the growth and pull of globalization.

CEO’s from other US industries are far more concerned about rising health care costs than the well-being of pharma companies. There have been moments when it seemed possible that broad industry groups might support positions affecting pharmaceutical companies that they would never support for their own companies.

For example, PhRMA would have great difficulty winning fights on re-importation and drug price negotiations if the rest of corporate America took the opposite position. To reduce or eliminate this possibility, who better to choose than the man who has represented the larger corporate community for the last 9 years?

With regard to the second challenge, PhRMA has successfully leveraged its status as a major domestic industry with a positive contribution to the American economy. This has helped soften the politically dangerous perception that American taxpayers, insurers and patients are cross-subsidizing the cost of medicines in other countries.

To sustain that leverage in the face of globalization, PhRMA needs to demonstrate that the US is still the home of the bio-pharmaceutical industry and that the growth of the industry is matched (or exceeded) by the economic benefit to the US. Who better to choose than a nationally-recognized advocate for policies to create domestic job growth and investment?

Some readers may say that these are not reasons enough to drive the choice of Castellani. Or they might argue that these are side-benefits rather than the primary point. I acknowledge that he is a “man for all reasons” and an obvious choice now that it has been announced.

I am intentionally looking at a larger perspective on the appointment, trying to see how it relates to the most important determinants of the long-term success or failure of PhRMA. My conclusion:

If John Castellani can maintain solidarity with corporate America, grow the perceived role of the pharmaceutical industry in the US economy, and manage the staff’s communications and lobbying efforts….then everything should turn out fine for PhRMA.

Let me know what you think?


The press release announcing the appointment is at: http://www.phrma.org/news/news/john_j_castellani_lead_phrma_new_president_ceo.

An interesting profile: http://www.whorunsgov.com/Profiles/John_Castellani.

An interesting analysis: http://www.muckety.com/John-J-Castellani/96246.muckety

My earlier column:

Transition at PhRMA
February 14th, 2010

Former Representative Billy Tauzin tendered his resignation this week, ending a 5 ½ year tenure as President of the Pharmaceutical Research and Manufacturing Association (PhRMA). When his successor is chosen, it will tell us a lot about how the pharmaceutical industry sees itself….and what the big pharmaceutical companies think is their next major challenge. Here is FDA Matters’ analysis. Read the rest of this entry »

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