If it ain’t broke don’t fix it!
But what do you do if it is broke? And what do you do if the “it” is healthcare and the “you” is the pharmaceutical industry?
The health landscape as we knew it has changed forever and the genie cannot be put back in the bottle. Industry has to adapt or die.
Industry leaders need to “fix” their sales model in response to the biggest threat the industry has faced since its inception. That threat is commoditization. On every side and in every country there is pressure to reduce prices, especially from governments who face increasing health costs from an aging population, higher expectations and improvements in technologies.
Pharmaceutical company success, like any other business, depends on its ability to acquire and retain customers. Prescribing decisions are consolidating, there are more competitors, generics and ever-increasing regulations to contend with. Change although difficult, is necessary.
The redesign of pharmaceutical field operations is probably one of the most strategically important and difficult tasks of senior executives.
In the late nineties two technology giants Xerox and IBM were facing similar structural market problems to the pharmaceutical industry. Both companies were producers of great technologies and manufactured market leading high tech products. Both had established and enormous manufacturing facilities and both companies were reliant on a huge and gifted sales force to create pull through for their products. Both companies were faced with the same problem. Market entrants were selling similar products far cheaper, customer needs were changing as a result of the digital age and costs of production were too high.
Both companies took a similar view. They had to try and prevent the erosion of their sales base by adding more value to their customers and thus retain premium pricing. To do this both companies sought to move from selling product to selling “solutions”. This new model required dramatic and far reaching cultural changes to the company’s structure and strategies. Solution selling is not the same as product selling. Features and benefits are not part of selling a solution. A solution is a much broader concept it involves bringing together a combination of elements to solve a problem for the customer. In the solution world the term partnership has real meaning.
The Pharmaceutical Industry has to take the same route by providing more value to their customer. And there lies the problem. Industry is no longer able to focus its attention solely on the Clinician. It is now the payers who call the tune and their motivations are very different from clinicians.
What do the payers want? Although the interest of the patient still lies at the core of their intent payers have twin objectives, the first, to implement government health policy and, the second, to ensure the availability of care within budgetary limits.
Payers are making demands within a changing industry, and in order to benefit from the shifting landscape, pharmaceutical companies must shift away from the traditional payer relationship and in its place, concentrate on how to add value to payers and managed care organizations.
As part of payer-centric strategy, companies need to develop their value propositions. Payers need to see a clear statement of the tangible results they will get from using your products or services. At present, payers are unhappy with the information and models provided to them by life science companies. They are looking for more detailed information about the clinical studies conducted beyond safety and efficacy. The provision of outcomes data and specific data showing the advantages of your products and service offering is needed.
Strong value propositions should offer tangible results such as
• Decreased costs (admissions, tests, consultations etc)
• Improved operational efficiency
• Reduced patient interventions
• Reduction in key health issues (obesity, smoking, cholesterol, alcohol consumption)
Together with a team of world class experts in Health Outcomes, SRxA partners with pharmaceutical companies to enhance their value proposition. SRxA can assist with brainstorming, market, customer and clinical research and pharmacoeconomics. The collated results form the basis for the prototype value proposition which is then rigorously tested. In this way a robust story can be developed for the sales teams, to give to the various “customer groups.”
Contact us today and you will have taken the first step to establishing your company as a marker leader in the new healthcare environment.