Optimizing Government Affairs & Public Policy Groups’ Structures & Operations
Public Policy and Government Affairs functions within the pharmaceutical industry have become increasingly critical during this period of political, economic, and social turbulence. With both functions involved in essential areas such as legislative affairs, reimbursement, and regulatory, it’s important for organizations to have not only appropriate staffing and budget levels for the groups, but also an alignment of services and responsibilities that enables the groups to function effectively and efficiently.
New market pressures and lifecycle events compel structures to evolve. Understanding how to create, structure, and maintain an effective Government Affairs group is a challenge that many organizations struggle with. From our benchmarking research, we found the following key trends in structuring these functions:
- Government Affairs’ Headquarters: Most benchmarked companies wisely don’t place their Government Affairs and/or Public Policy functions headquarters in Washington, D.C. The headquarters of these functions should be close to an organization’s C-suite to ensure its strategic and tactical compass stays true to the company’s short and long-term business plans.
- Prioritization Driven by Economics, Strategy & Stakeholder Impact: Business economics emerge as the top and most frequent driver of service prioritization. Economic impact of the issue and economic impact of the operations were two top prioritization drivers identified by benchmark partners. Issue impact and stakeholder level asked ranked close behind. In short, service priorities seem to reflect how much ($$), what (issue), and who (officer level).
- Outsourcing is an Emerging Tactic in the U.S. Market: Outsourcing Government Affairs staff is a viable staffing strategy in the U.S. marketplace but is less utilized outside U.S. markets. The maximum outsourced Government Affairs staff in the U.S. reached 51% at one benchmark company. Despite this, many others still don’t outsource. The average mix is about 70% in-sourced and 30% outsourced in the U.S.
Leaders in the biopharmaceutical industry are attempting to align their structure, resources, and activities with corporate goals and internal customers’ needs. Identifying these critical elements is key when creating and maintaining an effective & efficient Government Affairs group.