GPhA Reorganization Starts With Sales Pitch At CEO Summit

Board of directors approves transition plan, but search for a new head of the association will await a better estimate of revenue.

The Generic Pharmaceutical Association will officially restructure itself at the beginning of 2011 - cutting its board of directors in half and moving many members to associate status. But even before then, GPhA wants to display its new streamlined approach at a CEO summit in mid-November.

In contrast to past CEO summits, "we've changed the structure of it a little bit" this year, GPhA's Chairman, Watson CEO Paul Bisaro, said in an Sept. 29 interview. "It's really now going to be more about showcasing what the GPhA does for its members, what the GPhA has outlined for itself and its objectives for 2011 and taking input on that."

Bisaro said that "in the past it was really sort of the other way around. ...The CEOs were providing what the objectives were going to be, and then ... the GPhA was responding. We're changing it to be more proactive from the GPhA's perspective." The association is also trying to expand the number of CEOs participating, Bisaro said.

The effort at inclusion comes as GPhA redefines what kind of firms can join the association, limiting full membership to developers and sponsors of ANDAs or biosimilars, and moving other types of firms, such as suppliers or distributors, to associate status. The association's membership approved the changes earlier in the summer (Also see "ANDA User Fee Negotiations: A Big-Firm Coalition Tackles The Big Backlog" - Pink Sheet, 13 Sep, 2010.), and the board finalized the transition plan, including the revamped CEO summit, at its Sept. 28 meeting.

A Changed Association For A Changed Industry

In many ways, the change in membership structure reflects the transformations that the generics industry has undergone recently, as many large generic firms have expanded their geographic reach and product offerings, and they now have concerns that often resemble those of the their Big Pharma dueling partners more that those of their API-producing compatriots in GPhA.

Restructuring the association to reflect those new focuses and worries makes sense, but it comes after many of the generic industry's largest players, most notably Teva, have left the group.

However, "the purpose of this wasn't to go get companies back," Bisaro said. "That wasn't the objective. The objective here was to create the appropriate trade association for the time. ...It was 10 years ago when this trade association was formed through the conglomeration of three different, disparate trade associations. And it was a time to refresh the bylaws and the membership and how we define things to reflect that new reality."

The restructuring will provide a clarity of purpose, Bisaro said. "When you have a broad, disparate group of regular members, sometimes you can't take positions and do things that you would necessarily like to do because you have conflicting constituencies. And to the extent that there were conflicting constituencies, that's now been resolved. And so I think the organization will be much more targeted in its approach to matters."

The new structure will be tested quickly, as GPhA will need to negotiate new user fee programs with FDA on ANDAs and biosimilars and respond to pending pieces of legislation that would empower FDA to better securing the manufacturing supply chain and empower FTC to block a range of patent settlements with brand firms.

The Dues Are Alright

The transition has not been without its hardships. After Teva left and CEO Kathleen Jaeger resigned, the association laid off staff and cancelled its policy conference. (The Fall Technical Conference, co-sponsored with FDA, will still take place Oct. 19-21.)

With the revised membership, however, Bisaro seems confident that GPhA will have adequate resources. "We've changed the dues structure so some people will actually pay more, some people will pay less," he said. "It depends on where you fall in total dollars."

Associate members all pay the same fee, which has gone up "slightly," Bisaro said. "So some associate members who weren't associate members before are going to have to pay more, but some people who were members before and now associate members will actually pay less. But overall we believe the organizational dues structure is more sustainable and will provide ultimately more revenue for the trade association to do its work."

"Holding Pattern" On New CEO For GPhA

Despite those efforts, revenue projections are still uncertain, and that makes it difficult to conduct a full-fledged search for a new head of the association.

"We're sort of a little in a holding pattern right now, because while we're in transition we're collecting names and collecting ideas about the kind of leader we're looking for," Bisaro said.

An active search, which will be directed by the board's executive committee, will "not really occur until we have a better idea of how many members we'll have," and what the interim revenue will be for 2011. The association "won't know that until the end of the year," Bisaro said, "and we'll probably move more aggressively on that front come the first of the year."

-M. Nielsen Hobbs ([email protected])

[Editor's note: This article has been revised to correct the date of the CEO Summit.]