The Future of the Pharmaceutical Sector Post-Pandemic
STORY INLINE POST
There is hardly any industry that has not been affected by COVID-19.TThe pharmaceutical sector is no exception, having experienced both difficulties and threats as well as challenges on its way.
Overall, pharma companies to date have largely focused on the immediate crisis, ensuring that the delivery of high-quality patient care is ongoing, and the supply of critical drugs is shored up to avert potential drug shortages in the future. Their actions have concentrated on facilitating access to medicine; supporting the HCP community, institutions, and patient needs in new ways; safeguarding employees and enabling them to operate in a new environment; and handling new government restrictions; all while teaming up to collaborate in the development of vaccines and therapeutics.
Beyond all this activity, which has had the industry on its toes for the last nine months, this pandemic and its havoc will test pharma’s economic model. Not only because the results of drug development and trials will have an impact on pricing and reimbursement, but its traditional model of promoting mega sales force visits and its institution-centric strategy may not be sustainable in light of deep customer and market changes that will not go back to what they were prior to this pandemic.
It is becoming clear that the post-COVID-19 recovery will be a time of real change and, potentially, challenging for pharma companies’ commercial organizations. It will be critical for each company to build new ways to interact with physicians and key stakeholders in deep and meaningful ways. For some, that imperative will serve as a catalyst to make changes that they have been looking to make for years, such as a shift toward customer centricity, digital interactions, and new ways of working.
Overall, the COVID-19 crisis has been a massive shock to the healthcare system in at least three areas – utilization, adoption of new behaviors, and pharma engagement – with a series of changes and variations across specialties and geographies. Today, fewer patients are seeing physicians; thus, fewer prescriptions are being filled for most disease areas. Moreover, patients have not been able to receive timely care for new or existing conditions. While there has been a rising use of telemedicine and remote tools, they still do not offset the loss of in-person interactions. Remote-working tools for patient care, administrative needs, and education are being embraced in diverse ways; a trend that will endure postcrisis, although I do not foresee it becoming the norm.
Furthermore, there has been a significant decline in pharma interactions. Most pharma companies have partially or completely pulled their reps out of the field. Remote interactions with pharma, on average, are reportedly two times more frequent, but they are only partially offsetting the overall decline. Physician sentiment on addressing the immediate crisis appears to be part of the reason. Pharma leaders will need to carefully consider how and when to “reenter” and in what “right” way. I do expect that remote engagement with pharma reps will be a more prominent part of the interaction mix after the crisis.
Clearly these new market trends are a catalyst for companies to finally commit to a customer-centric commercial model – it is time to start thinking about the crisis recovery. Considering how to steer the organizations through a highly uneven recovery that will demand real commitment to a customer-centric commercial model will be a key success factor. In some ways, the crisis could be a wake-up call for the industry. Historically, many have had a vision for how to transform the customer-interaction model but have suffered from “pilot paralysis” or unwillingness to risk near-term sales disruptions to make a change with long-term benefits. Now, for many, the disruption has happened, taking advantage of this crisis is paramount.
Companies that are willing to take steps today to rethink their commercial models aimed at meeting the new needs and expectations of customers – and to do so in timely and collaborative ways – will be best-positioned to adapt successfully through the crisis recovery and the normal that follows.
Nevertheless, rethinking a business model should also comprise envisioning the future of health and how it will significantly change in the next decades to come – it will be a world apart from what we know today. Given emerging technology, which was being developed before COVID-19 and has been drastically accelerating as a result, we can be reasonably certain that digital transformation, enabled by radically interoperable data, AI, and open, secure platforms, will drive much more change. Unlike today, care will be organized around the consumer, rather than around the institutions that drive our existing healthcare systems. Health is likely to revolve around preventing some diseases from happening and curing others. Shifts in how diseases are identified, prevented (including faster development of vaccines and improvements in wellness), treated (earlier detection), or cured may lead to fundamentally different business models for traditional biopharma companies and new entrants. Prevention and early detection, curative therapies, custom treatments and personalized medicine, digital therapeutics, and precision intervention are all trends of change that will dramatically reshape the future of medicine and even re-size the market, hence upend the current pharma business model.
The existing model of selling therapies that treat symptoms or mitigate the progression of chronic diseases comes into question, and I suspect could no longer be viable in the coming years. Sales volumes for drugs across disease areas are likely to be impacted due to more effective prevention, greater stratification of disease, better tailoring of drug regimens for patients, an increase in curative therapies, behavioral intervention, and advanced medical procedures. As a result, what has historically been in-bounds for the pharma sector – treatment of chronic diseases – could significantly erode.
Biopharma companies will need to consider the potential for disruption and impact by these market trends as they redefine the types of products and solutions they will offer, where they will compete, and the new capabilities they will require.
Reimagining their service and value proposition for healthcare systems will be critical. Health systems globally are experiencing the full set of challenges associated with COVID-19. Given the breadth and complexity of the services provided, the local nature of the crisis recovery, and each health system’s individuality, even before the crisis, one can expect an even greater variability in their needs and expectations coming out of the crisis. Pharma companies that engage and are highly sensitive to health systems’ or institutions’ situations and grounded in problems they are actively trying to solve – for example, care-delivery adaptation, patient-support enhancement, and supply/inventory-management – could become a reliable, caring partner of choice as the next normal is established after the crisis.
While reinventing their value proposition, companies will also need to consider the potential for disruptions to the workforce as changes in design and operating models will drive redistribution of talent and new skill sets. Furthermore, as the adoption of digital and analytics tools and automation increases, organizations may have a greater need for talent that can program, operate, and interpret data from these new innovative technologies. This will require significant up-skilling and capability-building efforts alongside ongoing strategic planning.
Undeniably, companies are now more focused on operational resilience and accelerating initiatives that enable more agility, including workforce agility as workforces become more remote and distributed, and transparency through greater deployment of digital and analytics tools and automation. Nonetheless, this workforce agility will in turn enable leaner, more flexible, and well-distributed organizations.
In the end, pharma needs to reshape the industry and also let it evolve in the coming times. Companies that are able to reimagine their traditional business model may be most likely to succeed in a future built around prevention, early detection, and personalized therapies. Additionally, in the midst of unprecedented uncertainty and change across the healthcare industry, stakeholders are also looking for new ways to transform the journey of care. There’s immense scope for the companies to collaborate and contribute to society and add value to patients’ lives. It is a challenging but exciting time for the industry.