Life sciences must reinvent the commercial model to keep pace with scientific progress

The past five years have witnessed extraordinary progress in life sciences, marked by unprecedented innovation and achievements. From life-saving cell and gene therapies to more precise oncology treatments, the field has experienced a nearly 40% increase in new molecular entity approvals compared to the previous five years.

However, while research and development (R&D) have advanced significantly, the commercial model for life sciences has lagged. Although some progress has been made in recent years, particularly in streamlining the marketing model and re-orienting around HCP and patient experience, true reinvention of commercial models is necessary to build the life sciences industry of the future.

Our industry faces greater pressure than ever before, including pricing and access challenges, fluctuating global economic conditions, and societal forces such as health equity and sustainability. In this context, the advancement of commercial models has fallen behind. Accenture research reveals that more than a third of launches significantly underperform analyst forecasts, indicating that the industry's commercial model may not be performing optimally and is leaving significant value untapped.

To capitalise on scientific innovation, a transformation of the commercial operations of life sciences businesses is crucial. The most successful companies will focus on building long-term sustainable business models that prioritise patient and societal well-being, operational sustainability, and the cultivation of a skilled, loyal, and motivated workforce.

Emphasis on health equity

There is a growing demand for businesses to address institutional and structural biases within the healthcare and life sciences industry. Ignoring this imperative is no longer an option for companies that seek to operate and succeed in today's society. Genuine changes must be made to commercial structures to prioritise equitable solutions for all patients.

This includes promoting diversity and representation in commercial operations, such as market research and marketing. It also entails designing customer targeting and footprints with underserved communities in mind. Companies need to develop strategies to incorporate health equity considerations into their commercial operations, both internally and externally.

Success in this endeavour relies on collecting valuable data to assess the impact of these strategies. Businesses should expect to be held accountable for this data, just as they are for financial performance metrics.

The next generation of talent

The focus on health equity and fulfilling societal obligations can also help pharmaceutical companies tackle one of the biggest challenges facing modern businesses: the war for talent. Like other industries, the life sciences sector faces intense competition for talent from a wide range of businesses and, in order to succeed, strong differentiation will be required around the employee value proposition.

Historically, helping patients has resulted in high retention rates within the industry. Over the past five years, 90% of the commercial workforce has chosen to remain in the industry. As society increasingly prioritises "doing good", companies that make strides in embedding environmental, social, and governance (ESG) principles and equity within their organisations will find it easier to attract and retain the next generation of talent.

Building sustainable commercial models

Scientific advancement and progress towards health equity must be accompanied by a focus on driving operational efficiency in life sciences businesses. The industry cannot rely solely on scientific innovation to address the challenges posed by increasingly complex supply chains, net pricing pressures due to policies and the private sector, and growing business investments.

Life sciences businesses must ensure that they do not neglect the fundamentals of running a business. Efficiency and commercial success depend on cost control, commercial capability expansion, and effective supply chain management. Thoughtful decision-making regarding back-office functions and corporate business practices will be critical for navigating the challenging macroeconomic environment.

This may involve integrating previously siloed teams, streamlining core processes like marketing, or building new capabilities around data, analytics, and insight. It also requires exploring opportunities presented by cutting-edge technologies such as generative AI to transform corporate activities and create a more cost-efficient operating model.

Keeping up with the science

Although the life sciences industry may have been traditionally considered resilient in the face of financial downturns and crises, our sector is not exempt from commercial challenges. Global headwinds affecting the healthcare ecosystem, driven in part by an aging population and improved diagnostics as well as macro-economic challenges, are placing increasing financial pressures on the global pharmaceutical and healthcare sectors.

In response to these challenges, innovation in R&D must be accompanied by innovation in commercial models. Businesses cannot assume that scientific advancement alone will ensure success in this challenging new environment. Life sciences companies must confront these challenges head-on by deliberately strategising commercial model reinvention with a strong digital core, thereby creating sustainable value and driving growth.