HBA's 2002 Woman of the Year Leads Transformation

As a chemist, a vice-president, and just about everything in between, Sarah Harrison has spent 25 years delivering business excellence and predicting the impact of radical changes in the healthcare environment. Now she leads AstraZeneca in its own multi-faceted transformation.

With rapt attention, a group of public policy, clinical, regulatory, sales, commercial, managed care, and government affairs leaders listens to the woman in charge of helping prepare AstraZeneca for the future. She guides the discussion with intelligence and humor, working to build momentum toward a common goal: integrating the company's business processes with its newly revamped customer strategy. Inherently comfortable as a leader, Sarah Harrison is not yet entirely comfortable in her evolving seven-month-old position; and that's the way she likes it.

A formidable presence in the boardroom, AstraZeneca's vice-president of customer strategy integration has a well recognized softer side. She is a mother of four, a community volunteer active in organizations such as the YWCA and Girls, Inc., and a beloved and admired mentor for dozens of successful employees. Colleagues describe her as "legendary," "an angel," and "a confidante."

AstraZeneca At a Glance

For those things and more, Harrison is also the Healthcare Businesswomen's Association's (HBA) 2002 Woman of the Year.

In an exclusive interview with Pharmaceutical Executive, Harrison describes her move from the technical to the commercial management side of the pharma business more than a decade ago as a harbinger of an industry trend that continues to this day.

She outlines the company's self-proclaimed transformation from its reliance on a handful of blockbuster products on the verge of patent expiry to a business with a robust pipeline of products that target the needs of an aging population.

Sarah Harrison

Harrison's most valuable contribution may be her prophetic leadership in building AstraZeneca's relationships with large, organized customers such as pharmacy benefit managers and retail pharmacy chains, and with third-party payers, including managed care organizations, large employers, and federal and state government agencies. Her experience in numerous functions at Zeneca and its predecessor, Imperial Chemicals Industries (ICI), fueled her vision that those organizations would one day be some of the industry's most important customers. That forecast couldn't be more on target-nor could AstraZeneca's market positioning-poising the company to reap the rewards of Harrison's varied expertise and experience that began 25 years ago in Bayport, Texas and eventually landed her in Wilmington, Delaware.

Harrison works closely with the company's top corporate leaders including David Brennan, president and CEO of AstraZeneca, North America; Tony Zook, senior vice-president of commerical operations; and Alan Milbauer, vice-president of public affairs, to help key departments and employees understand and maximize opportunities stemming from the changes taking place in the industry.

Here, Harrison describes the changing marketplace as another driving force behind AstraZeneca's transformation, her team's efforts to position the company as part of the solution to the challenges facing the US healthcare system, and her perspective on the potential trend toward a government- regulated, or single-payer system, that many in the industry believe has weakened the European healthcare and pharma industries.

Risks for Rewards

Harrison has worked herself out of several jobs during her career, taking a few family-sanctioned risks. With the support and encouragement of a former boss, a plant manager at ICI, she took advantage of opportunities to grow within the agricultural chemicals industry, first as a chemist, then moving quickly through quality assurance, engineering, process design, and regional manufacturing management to ICI national production coordinator.

From that experience, Harrison learned many of the skills necessary for a career in pharma, including contract negotiation, production and supply chain management, customer and market development, marketing, regulatory affairs, and product lifecycle management. In 1989, she was offered-and accepted-a commerical management position in ICI's pharma division.

So Harrison made her move from the technical to the commerical side, a decision that met with skepticism from family, friends, and professional colleagues. But it was the advice and encouragement of another former boss, a director of operations at ICI, who valued her entrepreneurial spirit and reassured her that her skills were transferable.

"It was a big decision to leave the business in which I had established credibility," says Harrison, who was interested in leveraging her newly earned MBA. "I wanted to go into pharmaceuticals because I always regretted not

becoming a medical doctor. Also, my mother had died of breast cancer and I wanted to learn more about medical treatments and new products." She adds that, although her mother was treated with Zeneca's Nolvadex (tamoxifen), she still believes there were additional treatments that might have prolonged or improved her mother's quality of life.

Zeneca's focus on breast cancer research and treatment not only cemented Harrison's decision to break into pharma, its early involvement in founding and supporting National Breast Cancer Awareness Month (NBCAM) gave her the idea to enhance the company's position with large customers, especially managed care organizations (See "Ahead of Her Time," Linked to this article).

"We helped them learn to use NBCAM to offer more value to patients and to other members of their organization," she says. "That was our first entràinto sharing a service that we had with customers and other employers and helping them to develop customized turnkey kits to bring communities together in their awareness of breast cancer initiatives."

A long list of Fortune 500 companies, government agencies, and non-profits followed Zeneca's lead, offering employees, retirees, and sometimes even their communities onsite mammography screening and early detection educational programs. According to Karen Miller, director of ally development who coordinates NBCAM activities at AstraZeneca, the company has spent millions of dollars on those activities, even though they aren't directly tied to brand marketing activities for its line of oncology products.

Harrison's accomplishments continued to propel her upward within Zeneca, taking her from manager of bids and contracts through a series of promotions focused on managed care to traditional product management and back to managed care, this time as vice-president responsible for national account sales, marketing, and contract operations.

Then in 1999, Harrison found new opportunity in the merger of Zeneca plc and Astra AB. She was selected to be a member of the US AstraZeneca leadership team and also to be vice-president of the company's pain, anesthesia, and infection franchise. In that new role, she shared global leadership responsibility for pipeline development and licensing activities and aided AstraZeneca's transformation into a pure pharma company by recommending and leading the successful divestment of several non-core businesses.

"During the merger, Sarah and her team were challenged to integrate a portfolio from our respective organizations," says Zook. One of the most important decisions she and her team took was to divest a series of products, which allowed us to focus our resources on other areas," says Zook. "I was impressed with her objectivity in looking at the business and moving it forward, without concern for the impact on her own domain."

Harrison played a critical leadership role throughout the merger, and continues to work with human resources to help the global organization transform its culture into one that emphasizes management planning, leadership development, diversity, and the work/life balance.

Products Define Structure, Growth

At the time of the merger, Nolvadex was one of the key oncology products, along with Casodex (bicalutamide), Zoladex (goserelin), and Arimidex (anastrozole), that formed Zeneca's oncology franchise. Today, product lines shape AstraZeneca's organizational structure, integrating research, development, and all commercial functions under the umbrellas of five therapeutic area business units: oncology, gastrointestinal, central nervous system/pain/infection, cardiovascular, and respiratory.

"Instead of saying 'I'm in regulatory affairs' or 'I'm in marketing' or 'I'm in clinical affairs,'" says Brennan, "the goal was for people to say, 'I'm in the GI therapeutic area,' or 'I'm part of CNS, pain and infection.' The idea was to bring skill sets to different therapeutic areas, to enable global strategic alignment through fully integrated teams."

Key Product Sales by Therapeutic Area

The company hopes that integrated structure will ensure efficient teamwork within R&D, commercial, and other key functions through every phase of its products' lifecycles, and that the diverse perspectives within those strategic units will drive the successful commercialization of products.

The approach appears to be working, with AstraZeneca showing significant growth in several categories, including oncology, which had global sales of more than $2.1 billion in 2001-a 16 percent growth from 2000. The company's CNS business increased an impressive 48 percent, with its antipsychotic Seroquel (quetiapine) and anti-migraine therapy Zomig (zolmitriptan) growing 67 percent and 20 percent, respectively. The recent addition of Symbicort (budesonide/formoterol), which is not marketed in the United States, added $83 million in sales to the respiratory group's overall 17 percent growth rate last year, largely because of the 25 percent increase in sales of Rhinocort (budesonide) allergy nasal spray.

"The area in which we're not growing as quickly is the GI business, and that's because we're going through a transition from the reliance we had on Prilosec to the establishment of Nexium," says Brennan. "The [March 2001] launch of Nexium was extremely successful. It will probably be recorded as one of the most successful launches of a major primary care product in the last several years. But because Prilosec is coming down at the same time, our overall GI growth rate is nowhere near what it was just a couple of years ago."

Replacing Blockbusters

A large part of AstraZeneca's transformation will come through its pipeline, ready to fill the voids left by the important, mature brands potentially losing patent exclusivity this year-Prilosec (omeprazole), Zestril (lisinopril), Plendil (felodipine), and Nolvadex.

Although the news and financial media have relentlessly covered AstraZeneca's court battles to stave off Prilosec's competition from Andrx and other generics manufacturers, few stories have captured the significance of that loss to the internal business processes within the "purple pill" company.

"We've gone through an awful lot already to get people focused on the products that represent the future of our company," says Brennan, referring to the promising line-up of products awaiting FDA approval. Those include oncology treatments Iressa (ZD1839) and Faslodex (fulvestrant) injection, the thrombin inhibitor Exanta (melagatran), and cholesterol-reducer Crestor (rosuvastatin), the company's first entry into the frenzied statin market.

So far, Nexium's numbers look good: As of 31 December 2001, global sales of the proton pump inhibitor hit $580 million with $456 million in the United States alone. Brennan is confident that AstraZeneca will reclaim a significant share of the GI market, despite the decline of Prilosec.

In the Pipeline

Not only does the pipeline lend itself well to the aging demographics of the US population, it dovetails with Harrison's focus on healthcare reform. "Our pipeline and the population it targets are a good fit with the Medicare drug benefit debate, because in large part it's the over-65 group, not the uninsured population, pushing that legislation," says Harrison. "A large part of the debate focuses on the uninsured and underinsured, but the larger challenge is addressing the needs of Medicare beneficiaries who don't have adequate prescription coverage. Expanding access to products for that over-65 age group will expand utilization, which is good for pharma and good for our business because we have a pipeline that specifically addresses the medical needs of that group."

Shaping Public Policy

Although the aging population is an important target audience for many of AstraZeneca's products, Harrison's top priority is working with large government customers other than managed care companies. Most of her energy-and that of government affairs, managed care, and the customer strategy integration (CSI) team-is focused on developing solid business relationships with the largest of the large employers: state and federal government.

In the process, or maybe at its end, AstraZeneca will have positioned itself as an integral part of the solution to the problems people within the US healthcare system face in accessing necessary medicines. Although that US focus might appear to skirt the rest of the industry's rush to globalization, it is actually the most ambitious part of the company's transformation. And it makes sense. In 2001, $8.7 billion in US sales accounted for 53 percent of the company's total sales. Europe, with $5.2 billion, generated 32 percent. (See "Sales by Geographic Area,")

Sales by Geographic Area

Brennan says Harrison is uniquely suited to lead the company's CSI effort after decades of helping AstraZeneca change at the same pace as the market.

"She has a strong understanding of the products, having worked in marketing and sales management," he explains. "As a therapeutic area vice-president, she's had profit-and-loss responsibility for a $1 billion franchise that included our pain, anesthesia, and infection business. So she understands the process involved in bringing products to market. She grasps their commercial impact and what it takes to differentiate them and make them successful."

Harrison works with Richard Fante, VP of marketing operations on AZ's customer strategy integration team to develop solid business relationships with state and federal government.

She also has her work cut out for her. The CSI team has taken on industry challenges that would wither the confidence of seasoned legal departments, boards of directors, and pharma company CEOs: threats to intellectual property, scrutiny of current sales and marketing practices, pricing and reimportation pressures, and the trend toward a national single-payer healthcare system.

"As an industry, if we allow the current trends in the external environment to continue, we will probably face a US healthcare delivery system that is very different from the one we have today," Harrison says. "We have to decide as an industry and a business-and I know we're not there yet-what role we will play as part of the solution."

She predicts that a collaboration to enhance patients' access to medical treatment would have to include Big Pharma, state and federal government, organizations representing large employers, providers, physicians, patient groups, and insurers.

David Brennan, president and CEO of AstraZeneca, North America (left) and Alan Milbauer, vice-president of public affairs, work with Harrison to bring global strategic alignment through fully, integrated teams.

"The only way we're going to change the game and move the government's focus away from the cost of pharmaceuticals to providing access to quality healthcare for everyone," she says, "is if we, as an industry, objectively join the debate, demonstrate our value, and help drive healthcare solutions to increase access and affordability. The ultimate solution must balance short-term budget relief and long-term access to medical innovation."

"We are interested in strategies that take waste out of the system; improve components of care that enhance the value of each dollar spent; help patients to better understand and manage their diseases and properly use medications to avoid costly hospitalizations, emergency room visits, and unnecessary medical services. But until the states get some short-term relief, many will probably not accept those strategies as the first efforts to satisfy their needs, and definitely not if they're the only efforts."

Business Leader, Mentor, Public Servant

Harrison and the AstraZeneca government affairs team are busy deciphering the intricacies of state government relative to managing costs and the implications of their actions for the industry. She says states are beginning to behave like regional managed care organizations, implementing tactics that include preferred prescription drug lists and formulary restrictions. Part of the work requires her to look within the company to determine if its resources, processes, and capabilities are sufficient to compete and succeed in that burgeoning market.

Doing Business a Different Way

Approximately 20 people make up the CSI leadership team, although as many as 100 are working on the initiative. The ultimate goal is to leverage everything Harrison and the CSI team have learned about their new customers, use that to develop new strategies and tactics that align with business plans, and integrate it all back into the company's general business process. Harrison says that, within the next few months, just to keep up with changes in the states, the team will complete the transition of the company's state customer strategies into the existing business model.

On a much broader scale, Harrison is also involved, as part of AstraZeneca's senior leadership, in defining and overseeing strategies for other transformational initiatives crucial to operational excellence, talent management, enhancing customer and consumer strategies, and innovation.

To truly integrate AstraZeneca's business processes, customer strategies, and public policy objectives, Harrison, in leading the CSI initiative, has her hands in just about every aspect of the company's operations. Many pharma professionals would be intimidated by the sheer magnitude of her goals. But for her, the challenge is nothing new. For the first time, she says, she feels a bit uneasy in her job because of the complexity, uncertainty, and dynamic nature of the healthcare environment. Luckily for the company, that's just the way she likes it.

Harrison: Like everyone else in the traditional marketing and selling mode, we were marketing to physicians and somewhat to pharmacies, but we had important new customers emerging. I developed a compelling argument for senior staff to endorse a strategy to build relationships with large organized customers such as Kaiser Permanente, CIGNA, Harvard Community Healthplan, Prudential, and others.

Harrison works with Adele Gulfo, AZ’s vice-president, US cardiovascular therapeutic area, and others to develop strategies for working with pharmacy benefit managers and mail service companies.

The pharmacy benefit managers were not on the horizon until the '90s. But we began early on to develop the infrastructure necessary to monitor developments in that area. We had only five or six people on our account management team at the time, so we expanded it and boosted the effectiveness of our contracting operations team and created marketing capabilities. We built trusting relationships with those customers so that they felt comfortable sharing strategies and long-term plans with us. We quickly understood the cost control mechanisms they planned to implement. At that point, you either decided you wanted to play or you didn't. Many pharma companies didn't play early on; they fought that new emerging entity. I knew we had to play to win.

At that time, we had very few products. So instead of fighting the change, we decided to work with the managed care companies to grow revenue and profits for everyone involved. It wasn't a case of growing revenue at the expense of profits. We actually doubled Zestril sales very quickly. Then we continued to work to get it to be the number one ace inhibitor by cultivating mail service companies, which we hadn't worked with before 1992. We were surprised to find that their needs and the way they made money were different from other managed care companies. The tactics and strategies we put in place with other MCOs would not motivate mail service companies to partner with us.

So again, it's important to sit down with customers and really understand their needs. It's different from traditional product marketing, in which you build features and benefits around a product and a brand and put together programs to present a compelling case to physicians. The mail service companies had different needs. They said, "Look: Here's what we need for our patients and our community. This is how we make money and survive. If we can't bring those together, it's going to be difficult for us to work together."

The relationships we built in that segment of the market turned out to be very successful. By working with Medco-which was at the time, and still is, the largest mail service company-and Caremark, we were able to take our products to a significant level. In the mid to late '90s, we began to establish a similar type of partnership with retail pharmacies that helped catapult Zestril and Zestoretic (lisinopril/hydrochlorothiazide) to class leadership. The current AstraZeneca managed c