As biopharma corporate leaders from around the world gather at the annual J.P. Morgan Healthcare Conference in San Francisco, they face a number of forces that will make 2016 a telltale year for many firms, according to a paper just released by biopharma executive search firm Catalyst Advisors.

“In the wake of last year’s market correction, investors will be taking a harder look at boards, CEOs and management teams,” said John Archer, Catalyst Advisors’ Founder and Partner. “Good companies with great stories will continue to get the support they need. But those with less-than-convincing performance need to brace themselves for greater scrutiny. Investors are going to start raising the bar.”

The report, “The 2016 Review and Outlook: What Got You Here May Not Get You There,” speculates that this more critical environment may lead to a spike in CEO turnover, further tightening the competition for top-level talent. It also notes that boards may begin reexamining their current composition and recruit from outside their usual networks in order to bring in new perspectives. “Many biopharma boards are very tightly knit,” observes Archer. “This can bring benefits such as a shared vision and quick consensus, but it can also undercut a board’s ability to ask tough questions, and that’s becoming increasingly essential.”

The report names pricing strategy as the top C-suite agenda item for 2016. With biopharma therapies now able to benefit millions—as shown with treatments for HCV and the development of PCSK9 inhibitors—the traditional pricing model that automatically granted a sizable premium for breakthroughs becomes much less viable. Public confusion between truly innovative specialty therapeutics firms on the one hand and specialty pharma companies that manage products at the end of their life cycle on the other is also changing how companies address the pricing issue. “Pricing isn’t just a matter for the chief commercial officer any more. It’s a puzzle to be solved by the entire executive committee,” said Christos Richards, a Partner in Catalyst Advisors’ Los Angeles office.

In addition to greater scrutiny of boards and CEOs and the importance of pricing, the report highlighted the following issues as being top-of-mind for the new year:

Diversity becomes an industry-wide imperative: As diversity becomes the societal norm, there is a greater awareness throughout the biopharma industry of the importance of having management teams and boards that reflect the composition of the larger employee base. “Larger companies are in the public eye on this issue, and smaller and midsized firms can no longer count on getting a pass,” said Stephen J. Williams, Ph.D., a Partner in Catalyst Advisors’ Los Angeles office. “Building leadership teams with diverse backgrounds and perspectives is not only good business sense, but it sends a strong message about company values at a time when company values play an increasing role in employee retention.”

Succession is the ultimate human-capital issue: The competitiveness of the talent market means that most biopharma companies find it a hard enough challenge to fill all their senior vacancies. But the fact is that attention must also be paid to building internal leadership pipelines. Those pipelines, however, are prime targets for continuing waves of new companies built around the latest academic discoveries.

A greater emphasis on stakeholder management: Biopharma firms focused on cutting-edge research and development historically have been insulated from some external constituencies, but in the current environment, smaller and midsized firms are expected to strengthen their government affairs function to ensure they are part of the public conversation, and to strengthen their medical affairs leadership to proactively minimize any future obstacles their products might have in reaching the market.

The complete report is available here or by visiting the Catalyst Advisors website at www.catalystadvisorslp.com.

About Catalyst Advisors

Catalyst Advisors is a premier executive search firm devoted to finding transformative board directors, chief executive officers and senior executives for innovative biopharma companies ranging from established global enterprises to start-ups backed by leading venture funds. The firm is headquartered in New York with offices in London and Los Angeles. For more information, visit www.catalystadvisorslp.com.