But that's not the only way P&G expects its new $280 million, 1.3million-square-foot research center, officially opened July 19, to get its healthcare research and development on the fast lane. By bringing marketers and medical researchers together in a facility designed to foster interaction, P&G expects to bring more over-the-counter and prescription pharmaceuticals to market faster.
Chairman-CEO John Pepper said the new Healthcare Research Center will help P&G double its OTC and prescription drug business-now $3 billion a year-by the end of the decade and double it again by the year 2010. Within the next 10 years, Mr. Pepper said, he expects healthcare to grow from 10% of P&G's sales to between 15% and 20%.
"Healthcare, and by that I'm talking about both prescription pharmaceuticals and OTC, represents one of the most important growth areas for this company as we look ahead over 20, 30 or 50 years," Mr. Pepper said in his first public appearance as CEO. "As beauty care has played such a major role in this company over the last 20 years, I'm expecting healthcare to play a prominent role in the future growth."
P&G is spending 35% of its $1.1 billion annual R&D budget on healthcare, more than any other part of its business, said Gordon F. Brunner, senior VP-research and development.
Besides the OTC drugs, such as Aleve and Pepto-Bismol that P&G is better known for, the research is also concentrating on a host of new prescription drugs, said Thomas A. Moore, president-healthcare products. Those include a new "cure for ulcers" for which P&G announced a new drug application with the Food & Drug Administration.
The new hub of P&G's healthcare R&D efforts, which will house more than 1,000 employees initially and up to 2,500 by the year 2000, includes offices for most of P&G's U.S. healthcare marketing and sales staff. Besides laboratories, the center includes facilities for one-on-one and consumer panel concept and product testing.
The research center should produce efficiency gains of 20% to 30% over existing P&G facilities, in large part by bringing marketing and medical research staff under one roof and encouraging them to talk, said J. Paul Jones, VP-research and development, OTC healthcare products.
Productivity will come from reducing dead time caused by delays in communications and decisions, and conflicts late in the development cycle, Mr. Jones said. He cited the importance of having marketing employees involved before clinical trials so the tests will back a case with the FDA for marketing claims.
`Bringing together the clinicians, the regulatory experts, the commercial folks who do the advertising and marketing, and the professional sales people who have to go call on the doctors and hospitals together early in the process will greatly affect the ultimate success of the project," Mr. Jones said.
P&G designed the three-story structure with wider corridors and escalators rather than elevators, Mr. Jones said, based on studies that employees gather more readily for informal discussions in wider hallways and talk more freely in escalators than elevators or stairways.