Far beyond the pill: the future of pharma
Pharma can learn from other sectors about how to really meet its customers’ needs in the 21st century.
The pharmaceutical industry stands at a fork in the road. In one direction, the route points in a direction where more and more products become freely interchangeable ‘no-name commodities’. In the other direction lie escalating clashes with US and European politicians over prices and value. Just consider Hillary Clinton’s recent broadsides, saying “It’s wrong when drug companies put profits ahead of patients” – and it becomes clear that the industry’s current business model is under threat.
New business models: agile creativity
The pharmaceutical industry is facing battles on many fronts: little or no trust in it from the public, more losses of exclusivity, politically-enforced rebates – even for novel and unique drugs, mandatory licences, rejection from ‘essential drugs lists’, plus the clear outlook that biosimilars will soon be a lot cheaper than today.
The industry as a whole appears dogged by bad luck. The business model of the past evidently no longer works: it looks past its sell-by date.
There is no doubt that the pharmaceutical industry has contributed so much to rising life expectancy across the globe, and millions of patients know about, and value, pharma’s contribution to health and individual quality of life.
Yet pharma is now expected to contribute more than pills to healthcare. There is plenty of talk about going ‘beyond the pill’, but there is much still constraining the industry’s creativity and innovation in this regard: unending questions about ROI at every step, earmarked budgets and, in some cases, a overestimation of the regulatory wind chill factor.
Innovative services and co-operation: automotive example
Thanks to digitalisation, convergence between different industries is becoming more and more evident. This is why the automotive industry could rightfully serve as example for pharma.
This industry demonstrates a rich track record of (lucrative) services ‘beyond the car’. In its constant efforts to make a difference, the automotive industry has developed comprehensive mobility services, over and above simply selling cars. Cars have become simple and interchangeable products. Their latest offers reach from car-sharing models to global co-operation with Uber. Car-sharing, offered and promoted by the car industry, instead of selling? What would be the equivalent in pharma?
Even better: car buyers of any kind need financial services. This is why automotive manufacturers today all are fully licensed banks, offering all leasing, financing and any other service as one package to the customer. You could say that customers don’t buy cars any more, but ‘mobility solutions’. Imagine, therefore, if pharma could offer ‘high-end outcome treatment of patients’, perhaps, instead of pillboxes?
Differentiating solutions instead of ‘me-too’
Together with the old business model, expressions like ‘one size fits all’ or ‘best practice’ will become extinct.
No longer can it be that ‘in pharma everyone does what everyone else does’. That will not generate any value in the future. Differentiation in markets, trusted brands and caring people will guide future-proof pharmaceutical companies. Each one will identify and walk the talk on its individual pathway, with a constant commitment to getting closer to patients and understanding their needs. Increasingly, pharma businesses will join forces and cooperate with Google’s Verily, IBM’s Watson or other ‘digital disruptors’. It will be ‘far beyond the pill’ and the first movers are around already.
Effectiveness and efficiency
The common denominator among lawmakers and governments around the globe is that they want more for their investments in healthcare. Meanwhile, managerial questions like ‘Are we doing the right thing?’ or ‘Are we doing things right?’ are common in pharma. To bridge this gap, pharma could share its internal workings, knowledge, and SOPs with healthcare professionals and patients. The knowledge that is abundantly available in pharma needs to be shared with other stakeholders, and could provide a perfect playground for new business models.
The industry must open up its treasury of wisdom, which is currently lying dormant in research and medical departments.
Imagine being able to introduce quality-assured and certified procedures from your area of expertise into the delivery of care. Clinical pathways, patient engagement and therapy adherence are all known, exercised, tested and readily available in your ‘clinical research’ department.
Refreshed company objectives, combined with a genuine drive to build trust and patient wellbeing, could help the industry avoid that nightmare scenario of growing conflict with politicians and payers.
The number of pharmaceutical companies is rapidly reducing and industry Darwinism’ is already taking its toll.
To really start walking the talk about building trust, pharma needs to be bold and unlock its creativity and innovation for the good of patients.
About the author:
Hanno Wolfram is the founder and owner of www.Innov8.de, a Germany-based firm offering consultancy for pharmaceutical companies. He is the author of ‘KAM in Pharma 3.0’, an international textbook about Key Account Management in pharma.
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