STORY INLINE POST
As with many other sectors, healthcare saw the COVID-19 pandemic amplify long-standing industry issues as well as create new ones, thus driving the need for accelerated innovation and technology. As a result, the pharma/healthcare e-commerce space experienced massive pandemic-induced growth. The ease of operation, convenience, added digitalization, improved security, lower cost implications, and, of course, an increase in the number of patients are all drivers contributing to the expansion. The increase in the adoption of telehealth solutions, uptick in remote care, surge of online script filling and rise in mail-order services, clearly reveals that patients, physicians, and institutions are ready – or were forced to be ready – and are now willing to move a significant part of medical care to digital channels.
With the global healthcare e-commerce market estimated to reach $435.8 billion in revenue by 2025, it is clear that there is both a want and a need for online health products and services among businesses and the general consumer population. This boom is poised to develop even further and align with the ever-changing patient and provider needs in this increasingly digital world and has in turn propelled the rise of innovative medical applications, such as telemedicine, online pharmacies (aka e-pharmacies), and remote medical consultation, among others to come.
In the last decade, the application of e‐commerce has been evolving from a technology-driven to a more user driven-model, where e‐commerce has become synonymous with communication, strategy, and business practices. Therefore, using e‐commerce as an aid to exchange information and execute transactions among businesses and individuals will not be enough anymore. Supplementary traits, such as automation, personalization, customization, and customer experience, will be key success factors to gain a competitive edge.
The integration of telemedicine with digital commerce, for example, is enhancing the patient experience considerably, thus resulting in improved clinical and business outcomes. As competition for patients increases, patients may choose among providers based not only on clinical outcomes but also on their overall satisfaction and experience. Satisfaction can be affected by many factors, such as convenience, integrative product and health services portfolio(s), customer service, user friendliness, turnaround times, transparency, relational follow-through, feeling understood and cared for and how effectively they feel their provider communicates with them. E-commerce in the pharmaceutical industry has started a new age, both in terms of its uses and its applications, hence, carving out a differentiated place in the digital ecosystem will be vital for every pharma/healthcare company.
It will be crucial, for pharma companies as well as healthcare providers, to prepare and collaborate by building strong partnerships and alliances that will enable them to keep up with, and successfully compete in, this fast-growing market which offers astounding opportunities, as witnessed by the increase of emerging markets and target audiences, the number of strategic alliances, new nontraditional incumbents, and the rising investment for the development of advanced technologies. Whether for branded or off-patent drugs, telehealth solutions, or remote care, building an end-to-end platform that puts the patient at the center presents a huge opportunity for companies that execute and partner effectively.
In both, a business-to-business (B2B) and business-to-consumer (B2C) context, e-commerce can enable easy, efficient, and transparent prescription drug buying and other essential services, such as telehealth, inevitably leading to higher demand for such offerings across the board. However, despite the clear patient and physician appetite for and adoption of digital platforms outside of limited specialized offerings that mainly offer generic drugs, full end-to-end experiences are limited.
Today, most current solutions in pharma/healthcare are piecemeal: prescription services, telemedicine providers, e-commerce platforms, and pharmacies are all separate entities, leading to an inefficient process and a subpar patient experience. Moreover, companies are leaving money on the table when they could bring the value chain together while offering their full value proposition and brand(s). There remains a significant opportunity to bring the entire value chain together for the benefit of the patient – and their own – partnering and aligning each element of the telehealth service, for example, to create an end-to-end e-commerce experience.
With full e-commerce integration, corporations can offer patients and providers an easy, efficient way to search for remote consultation and purchase the drugs they need, as a start. In a B2C context, this means patients can get diagnosed, purchase and receive their prescription drugs from the comfort of their own homes, avoiding hassle and additional costs. In a B2B context, comprehensive pharmaceutical e-commerce platforms can allow providers to compare all the different, constantly fluctuating factors involved in drug purchasing or in procuring medical services and solutions (i.e., preclinical) — including current availability and prices — to enable informed spending.
While few instances, the more successful e-commerce attempts have indeed created all-encompassing platforms – a one-stop-shop approach. One example of a marketplace in the industry is AstraZeneca’s AIM (AstraZeneca Innovation Marketplace). The B2B platform has simplified buying preclinical services from external partners. AIM operates a research concierge that enables the company to choose suppliers that meet the prerequisites set by the company. AIM provides price quotes along with technical information. It is the primary route for AstraZeneca to do business with preclinical research suppliers.
It is clear, however, that with transparent purchasing capabilities, companies may be forced to become more competitive in their pricing. Knowing what everyone else is bidding, asking, and trading helps determine the true supply and demand for a drug or service – that is, its true value. When this information is spotty or unavailable, the market is less efficient. Therefore, enabling price transparency among individual pharma/healthcare organizations will encourage competition. Open e-commerce platforms can give these organizations an idea of current market pricing and provide them with more bargaining power when it comes to securing drugs or healthcare services at lower costs. Online drug purchasing should help hospitals and healthcare systems with securing the drugs they need at the best possible prices at a given time, potentially leading to significant organizational cost savings. Real-time price monitoring and spend tracking should create an easier, more efficient experience overall.
Over the past year, the pharma digital boom has attracted e-commerce giants, such as Amazon and Alibaba. They both have announced major investments in their e-pharmacy businesses, creating a new marketplace. Both faceless behemoths are entering the healthcare arena and bypassing pharma giants, strategically and financially. These companies certainly will not stop there and will not be the last to enter the health e-commerce field, so pharma companies must act fast, and now, to be able to reap the rewards of this rapidly expanding industry. They need to be constantly looking for new leads to expand their market and increase sales. The increased adoption of telemedicine solutions combined with warming consumer sentiment toward online channels and perhaps a more sympathetic regulatory climate has presented a big opportunity for pharma/healthcare companies willing to take a new look at how they sell their products and services. End-to-end e-commerce solutions are a promising possibility in a world where consumers increasingly expect to be able to get what they need online.
Nonetheless, the pharmaceutical industry has usually shown itself to be customarily protectionist and conservative about expanding into new business models, such as e-commerce. The complexity of the industry means it has been heavily regulated, which is, undoubtedly a contributing factor to the fact that the progress and the growth of pharmaceutical e-commerce can only be described as low to moderate, especially in comparison to nonregulated sectors, such as consumer, food, fashion, beauty, or travel. Furthermore, the fact that the pharmaceutical industry has not embraced the potential of the internet and of e-commerce to alter the status quo of the market has, therefore, led them to experience a far slower growth than that seen in a consumer product industry. Notwithstanding, the current growth in the use of e-commerce in the pharmaceutical industry, while slower than other industries, cannot be disregarded. It has made huge leaps, considering where it has come from but, then again, the opportunity is still immense.
Not surprisingly, pharmaceutical e-commerce has faced numerous challenges, which have and will continue to encourage alliances and collaborations throughout the whole chain. Such factors will need to be addressed as the application of online sales and service-delivery platforms become popularized in the industry. Otherwise, their impact, if not dealt with, could be detrimental:
- Regulatory factors have played a part in slowing progress. Regulators and companies will have to ensure that patient data is handled correctly, professional practice standards are set and enforced, consumer protection concerns are addressed, and healthcare fraud and abuse issues are curtailed.
- Privacy and protective security measures, of all the users as well as professionals, should be established and enforced more than ever. The usual practice of the pharmaceutical industry is to target healthcare professionals as the end-consumer; however, in the e-commerce arena, there is a shift in communication with the patient as the end-consumer in many instances, so safeguarding measures should be put in place.
- Risk of self-medication – while the availability of e-Rxs is convenient, it could encourage instances that could have more grave personal consequences without a sound diagnosis or indication of the proper dosage intake by a doctor or a licensed pharmacist.
- Inefficient storage – the appropriate storage of pharmaceuticals cannot be correctly accounted for during transportation and storage. Especially with drugs that rely on a cold chain, the correct temperature is of the utmost importance to ensure the medication retains its correct potency.
- Potential rogue players working illegally and providing illegitimate and dangerous drugs to consumers, or even diversion of the drugs that are being delivered, need to be prosecuted. We need to find new ways to verify and validate prescription orders and medicines being delivered.
- Legal issues in e-commerce are relatively new concepts which, of course, are directly derived from general instituted legal codes and laid out according to the need of the users. The major legal issues in e-commerce are security, authentication, liability through regulation of on-line sales, services provided, and Rx drugs delivered, privacy, encryption of on-line therapies and electronic contracting between the partners.
In short, traditional models within the healthcare industry are being disrupted with the advent of digital commerce, so pharma and healthcare providers must quickly understand the implications of this shift to drive innovation and better patient care, before nontraditional players do. As the healthcare industry continues to evolve to meet the needs of today's providers and patients, so too will B2B and B2C pharmaceutical/healthcare e-commerce offerings and platforms.
Pharma corporations can grow their business by incorporating e-commerce strategies into their marketing mix. Given the statistics and the amount of money flowing into e-commerce solutions, they probably should be doing so now. In my opinion, optimizing their business model by offering e-commerce options, in this digital era, is simply smart business.