The Top 40: Harrison & Star Business Group

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Harrison & Star chairman and CEO Larry Star says 2005 was the agency's best year ever. Its 20% revenue increase is deceptive because the agency lost about 25% of its business last year when Taxotere, a chemotherapy drug from Aventis, was reassigned after Sanofi acquired Aventis.
“We started 2005 in a huge hole,” Star says. “We made up a quarter and then grew 20%. The agency really rallied, and nobody panicked.”

Abbott proved helpful in the climb out of the hole. Its arthritis drug Humira is undergoing clinical development for a number of other indications, and Star says its potential for broad clinical utility helped make it big. Abbott also awarded Harrison and Star US and global work for HIV drug Kaletra. Other assignments came from The Medicines Company, a specialty pharma company developing cardiovascular compounds; Organon's anesthesia portfolio; and client Genentech's portfolio of lytic products. Business is also expanding around Genentech's oncology drug Avastin (first indicated for colorectal cancer and currently awaiting FDA approval for lung and breast cancers).

Increasing use of digital tools in medical is a trend Star is glad to see. And while he notes that the full implications of Medicare Part D are yet unknown, Star observes it already impacting business. “We see it changing the business environment for physicians, and that's already happening in some specialty areas, [such as] oncology,” he says.

“How physicians get reimbursed for treating cancer patients has changed radically. In the past it was very profitable for physicians to administer chemotherapies in their suites. Many are saying, ‘I can't make money this way anymore,' and [those] who don't know how to adapt are going out of business. Sending patients to hospitals to get chemotherapies affects how pharma markets brands. If decision-making is shifting or might shift to a more hospital-based contracting model, then the whole purchasing system shifts.”

Among last year's highlights were the acquisition of an autonomously operated medical education firm, and replacing the Aventis loss without layoffs. In fact, 64 employees have been added over the last year and a half. Headcount stands at 220, although Star expects to hit 250 by year's end. The hunt for talent is a continual challenge, and he believes investment and retention are critical.
The agency will offer a training initiative with a core curriculum designed by in-house people and outside experts. It enlisted a Six Sigma black belt last year to improve processes. For the last nine months, Harrison & Star has endured the “painful but important” task of breaking down and analyzing its processes. In July, education efforts will begin to retrain staff.

“A lot of teams [were] here night after night because processes were slowing them down,” Star says. “We have to create an environment where people want to stick, which was one of the main strategic imperatives. It was not about [increasing profitability], it was about how we can be more effective, have more quality control and have a better work-life balance for our people.” 

Internal evolutions will almost certainly help the agency to more effectively meet the challenges of the marketplace. “The marketplace is evolving, and we're going to have to come up with different plans and strategies,” Star says.

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