You are on page 1of 5

Scenarios in Practice: A consulting futurist

offers insights on how

Futuring in the a key foresight tool,

the Impact/Probability
Pharmaceutical Matrix, enabled
decision makers in the
Industry pharmaceutical industry
to see how certain
trends could change
By Eric Garland how they do business.


©2005 World Future Society • 7910 Woodmont Avenue, Suite 450, Bethesda, MD 20814, U.S.A. • All rights reserved.

30 THE FUTURIST January-February 2006

uture scenarios are useful tools Much of the mundane work of the petitive threats and opportunities
to stimulate strategic thinking primary-care physician is outsourced that are over the horizon.
because they produce detailed using the Internet, although tough
stories about what the future could cases are still referred to American Using Future Scenarios
look like. When a decision maker specialists. In Real-Life Situations
understands where we might be Just as there are numerous ways to
heading, he or she can decide where This brief scenario tells a story— tell stories—film, kabuki, standup
to lead the organization. one that should give health-care ex- comedy—there are a number of
Scenario building is like journal- ecutives something to think about. ways to develop and present
ism, except in reverse. Instead of col- Though it may not come true exactly scenarios to a group that is thinking
lecting rigorous data about the past like that, the implications of that about a problem.
to write a story, in the scenario we story as it develops will change how One effective tool for scenario de-
make projections based on trend the executive thinks about the com- velopment is the Impact/Probability
data that indicate the future. Based ing competitive pressures on the in- Matrix (Figure 1, page 32). The ma-
on rigorous trend data, futurists can dustry. This scenario asks important trix presents four potential scenarios
draw pictures of the kinds of world questions: comparing each one’s potential im-
that the trends could lead to. • Is globalization going to impact pact and its probability of occurring.
Trends alone are not enough for the American hospital? Impact is the estimation of whether a
the decision maker. They trend could be mildly dis-
are the abstract forces that ruptive (requiring a few
will act on us and our com- new practices) or disturb-
petitors. They show a
sliver of the future, but
“The tools of the futurist ing (requiring perhaps a
complete change of busi-
they are not complete
enough to deliver a picture
help to expose our assump- ness strategy). Probability is
a measurement of how
of the market in which we
will be competing.
tions and our blind spots. likely a scenario is and
what events would need to
Take these disparate transpire in order to bring
trends, for example: They serve to show us . . . it about.
• The cost of health care The Impact/Probability
is increasing. some of the things of which Matrix is useful for several
• The baby boomers will reasons. It is a quick way to
be the largest group of we are ignorant.” develop four individual
people over the age of 65 in scenarios with different im-
American history. plications for the organiza-
• The Indian middle tion. Four is a good num-
class is growing in number. • Is the U.S. health-care industry ber to work with because it gives a
• Businesses outsourcing work investing enough in cutting-edge in- range of possibilities without over-
overseas is increasing as a strategy to formation technologies? What about whelming the decision maker with
keep costs low. other countries? complexity. Offering two scenarios
• Diagnostics equipment is falling • Will foreign medical students only would introduce a football-
in price and increasing in connectiv- who come to America stay, or will match mentality—our side or their
ity to the Internet. they return to their home countries side. Three lets people choose a mid-
These are interesting observations, to practice? dle ground, an often falsely moder-
but the information by itself is so ab- • How much pressure is the baby ate position to take. And five or
stract that it isn’t useful as a strategic boomers’ aging going to put on more scenarios get difficult to un-
tool all alone. But when the trends health-care practices? Can organiza- derstand. With four scenarios, the
are crafted into a scenario, a story tions minimize the discomfort by Impact/Probability Matrix offers
jumps out: planning ahead? views of distinctly different out-
Realistically, we cannot plan today comes:
Scenario for the Year 2016 all the way out to 2016. Too much • Flash in the pan—low probabil-
America, fiscally burdened by the will change between now and then. ity, low impact. This scenario shows
cost of its massive retired population, But the tools of the futurist help to how events could turn out to be less
begins to outsource some health-care expose our assumptions and our of a disruption, and thus any over-
duties to doctors in India. blind spots. They serve to show us reaction on our part would be
Telemedicine becomes more wide- not only what we assume to be true wasted energy. This scenario often
spread, involving the use of remote about how the future will play out, surmises that the coming change
diagnostic machines, located in Amer- but also some of the things of which will not really be a big deal, or will
ican clinics, to take readings and doc- we are ignorant. blow over quickly.
ument a patient’s symptoms and vital These insights are useful in busi- • Business as usual—high proba-
signs. ness because they help point to com- bility, low impact. A change is com-

THE FUTURIST January-February 2006 31

ing, but we can adjust to it without GlaxoSmithKline was recently sued For the industry decision makers,
suffering big growing pains. We by New York Attorney General Eliot we used an Impact/Probability Ma-
need to observe the forces at play to Spitzer for fraudulently withholding trix to explore how much disclosure
see if some things will change information on trials of the use of the might be mandated and how such
around us, but our business will antidepressant Paxil in children. As mandates would change strategies at
remain fundamentally unchanged. part of its settlement, the company is pharmaceutical companies. Figure 2
• The brewing storm—high prob- disclosing all trials, regardless of shows how the scenarios played out.
ability, high impact. This
is often what executives Scenario 1: False
focus most on, a scenario Alarm—Low Probability,
that would mean a real Low Impact
problem. You can see the “Lots of people will downplay American business has
path to this “brewing a short attention span,
storm,” and the explo- the effects of a wild card. . . . and there are sometimes
ration of this future will fads and short-lived ob-
point to signs we need to But wild-card scenarios play sessions that quickly dis-
watch for. appear. In the False Alarm
• Wild card—low out in reality all the time, scenario, the news cycle
probability, high impact. churns on and the media
Wi l d c a rd s a re t h o s e
scenarios that are un-
especially in response to get tired of discussing
something as arcane as
likely but could arrive if
a couple of events come
catastrophic events.” clinical trial design and
disclosure. Political inter-
in rapid succession and est, too, moves on when
change everything. It’s the election year is over.
the “We never saw it coming” outcome, on a public database. This The whole thing goes away in a few
scenario—something on our blind has spurred many stakeholders, months.
side that would result in severe con- from medical journal editors to Con- In this scenario, the politicians
sequences due to our lack of prepa- gress, to consider a permanent, have scored their victories and
ration. industry-wide, mandatory database moved on to reform industries other
Lots of people will downplay the for all trials so that companies are no than pharmaceuticals. The election
effects of a wild card. Sometimes, if longer able to hide unflattering data. year passes, and no political points
you propose one of these scenarios Proponents argue that this would are left to win. The news media find
out of context, people will think you improve the access that doctors and that the only details of the story left
are an overreacting alarmist. But patients have to information about to debate are so specialized and
wild-card scenarios play out in drugs. complicated that only pharmaceuti-
reality all the time, especially in re-
sponse to catastrophic events. PHOTOS.COM

The Impact/Probability Matrix in Figure 1: Impact/Probability Matrix

Action: Clinical Trial Disclosure
Let’s see how the Impact/Proba-
bility Matrix works in real-life situa- High
tions where nobody knows the out- Impact
come of trends and potential
disruptions that will affect an entire
industry. Wild Card Brewing Storm
The matrix was put to use recently
for a group of pharmaceutical indus-
try decision makers concerned about Low High
a potential shift involving clinical Probability Probability
trials and their disclosure to the
public. In the past, drug companies
have been able to conduct clinical Flash in the Pan Business as Usual
trials to learn about drugs they are
developing or marketing, but they
have been under no obligation to Low
publish their findings. Impact
Recently, several events have led
government agencies to call for
mandatory disclosure of trial data.

32 THE FUTURIST January-February 2006


industry that government agencies

might move to demand full registra-
Figure 2: Scenarios for Clinical Trial Disclosure tion of all research activities, from
preclinical to Phase III and IV trials,
irrespective of the market potential
of the drugs.
All participation would be manda-
tory. Other drug company activities
would likely be monitored as well,
including whatever the sales repre-
Total Disclosure sentatives tell prospective customers
and how much doctors are paid to
provide clinical information.

Low Probability High Probability Business Implications of Clinical

Trial Scenarios
The Impact/Probability Matrix has
False Alarm Self-Regulation delineated a range of scenarios, all
with varying degrees of disclosure
imposed on the pharmaceutical in-
dustry. There are scenarios in which
business won’t change much, and
others where pharmaceutical compa-
nies must operate with unprece-
dented transparency.
The next step is to look at the po-
tential impacts of these scenarios.
cal company executives, physicians, pany’s future.
Here are a few:
and FDA regulators are willing to
• Silence might win. If the move-
tune in. Scenario 3: Government
ment toward more disclosure of
This scenario is unlikely, as aging Regulation—High Probability,
drug-trial results is only a flash in
Americans, Medicare budget battles, High Impact
the pan, then the smart companies
and rising drug costs keep pressure
The scenario with the greatest like- are followers, not leaders. If GSK
on all aspects of the pharmaceutical
lihood and impact for the industry is and Eli Lilly put forth a clinical trial
business. The public probably won’t
one of federal regulations mandating database with full disclosure, they
simply turn away at this point.
the disclosure of clinical trials. will be stuck with it, while other
In this scenario, legal actions con- companies still have options.
Scenario 2: Self-Regulation—
tinue to pile up, along with contin- • Disclosure becomes a way of
High Probability, Low Impact
ued pressure on the health-care in- life. The pharmaceutical industry is
If no additional major events oc- dustry in general. The voluntary certainly regulated, but we could see
cur, and pharmaceutical companies database PhRMA (Pharmaceutical a new era of government oversight.
step to the plate to increase their Research and Manufacturers of There may be new regulatory boards
own disclosure, the government may America) fails to become a useful added to government agencies, and
allow the industry to police itself re- tool because of a lack of voluntary companies will need to augment
garding its disclosure of information participation. Public and govern- their government relations depart-
to the public. This is the low-govern- ment discontent continues to grow. ments, because the regulations are
ment-intervention scenario, Self-Reg- To avoid further legal actions, now mandatory.
ulation. drug companies agree to a govern- • First to market not always
In this scenario, pharmaceutical ment-run database disclosing data preferable; fast followers gain new
companies all agree to post the re- on all Phase III and IV trials, regard- advantage. The new era of disclo-
sults of completed Phase III trials less of their results. There would be sure will change how companies
that are material to understanding penalties for a lack of disclosure. come first to market. It is conven-
marketed drugs. Phase II and III tional wisdom that the first to mar-
trials of compounds not yet on the Scenario 4: Total Disclosure— ket gets increased brand recognition.
market will be conducted without Low Probability, High Impact Now there is a trade-off. Later en-
any requirement for disclosure, (Wild Card) tries into markets may be able to
though often the investment commu- If there are more scandals involv- structure Phase III programs more
nity will learn of these so as to un- ing drug safety or obfuscation of cheaply because companies will
derstand the impacts of R&D and trial data, the public could become learn from their competitors about
products in the pipeline on a com- so distrustful of the pharmaceutical blind alleys not to go down.

THE FUTURIST January-February 2006 33

• Learn from every lab in the showed the superiority of Pfizer ’s school, a community, or even a fam-
world. There will be a loss of secrecy, Lipitor. Pharmaceutical companies ily—and how it will change. In busi-
as competitors can observe trial de- may adopt a more targeted approach. ness, these tools get leaders a step
sign, patient populations, endpoints, • More-successful studies. Even closer to anticipating how their mar-
and eventually results. Drug compa- well-designed trials may result in ket will be different in the future.
nies will be able to reap greater effi- unfavorable results due to poor en- They can thus become better equipped
ciencies as companies learn from rollment, uncertain methodology, or to handle the competitor of tomorrow.
other labs in all other drug compa- endpoints of disease that are not uni- Competitive intelligence is all
nies. The total costs of drug develop- versally accepted. Learning the pit- about the future, whether 10 years or
ment could be reduced as competing falls of other laboratories could help 10 weeks from now. Learning what
laboratories avoid duplicating each companies avoid them. may be around the corner is essen-
other’s mistakes and improve the de- tial to strategy, and the tools of the
sign of their clinical trials. futurist are ideal for improving other
Futuring for Decision Makers
• Fewer studies. Companies may models of competitive assessment. ■
potentially limit studies if all trials This is only a partial list of impli-
must be registered and all results cations. Once the decision makers
disclosed. A faulty or even ex- are engaged in developing these About the Author
Eric Garland is the principal
ploratory trial design could result in futures tools and analyzing the
of Competitive Futures
immediate exposure to criticism by scenarios, their open discussion
Inc., a futures consultancy,
one’s competitors. Post-marketing about possible implications leads;
studies are typically more open, but them to consider potential impacts e-mail egarland@competitive
head-to-head trials will instantly sig- they could have been denying.
nal to a competitor of an attack on its For these reasons, futures tools are This article draws from his
market share. Head-to-head studies useful not because they are some forthcoming book, Fast Forward Thinking.
may become riskier, as it will be less sort of crystal ball, but because they
possible to conduct trials such as the inspire people to consider what they
FEEDBACK: Send your comments
PROVE IT statin study by Bristol- already know about their world— about this article to
Myers Squibb, which inadvertently whether it’s a business, an agency, a

Call for Papers

WorldFuture 2006 Conference Volume
The World Future Society is seeking fresh, insightful essays to include in a volume to be distributed
to all attendees as well as to Institutional and Comprehensive Professional members of the Society.
Papers focusing on the conference theme, “Creating Global Strategies for Humanity’s
Future,” are especially desirable, as well as essays that address other significant issue areas, such as
education, technology, the economy, the environment, public policy, societal values, and futures
methodologies and best practices.
Previous contributors to the Society’s highly regarded conference volumes have included scientists,
scholars, futures researchers, professional futurist consultants, educators, executives, philosophers,
and many others.
Guidelines for submitting an essay for possible publication may be found online at For more information, contact Susan Echard, vice presi-
dent for membership and conference operations, at
Deadline: Essays must be received by March 6, 2006.

34 THE FUTURIST January-February 2006

You might also like