Reputation, Business Model Redesign and Patient Centricity.
EyeforPharma recently conducted an online survey – a Health Check of the industry, and the results highlighted a couple of interesting challenges for me.
Let’s begin with the good news. And, as usual with industry specific surveys of this nature, what comes through loud and clear is that there is a lot of confidence in the future of the industry. And that is as it should be; one would expect employees to be optimistic about the future of the industry and company they work for.
Counting the top 2 boxes: 80% and 70% see their company increasing revenues and profits in 2016. 50% believe the industry knows what it needs to do to improve it reputation. Nearly 60% are driven by making a genuine difference to patient lives, with 40% seeing an improvement of the industry’s reputation with physicians and slightly less 29% with consumers. 55% sees their organization as excellent or good in their approach to patient centricity.
All relatively positive. But it identifies huge gaps, and highlights incredible opportunities for those few companies that choose to grab hold of the nettle and really addresses some of the issues that we seem to know quite well but that continue to hold the industry back.
The overall reputation of the industry and the individual companies in it remains poor, yet just over 50% of survey respondents confirm that the industry knows what to do to improve its standing. And while we can discuss at length if this is a fair overall picture it highlights the issue that, obviously, for pharma at least, it is very different ‘knowing what to do’ compared to ‘actually doing it’.
We all know at a high level, what businesses need to do to build trust and enhance their reputations and it seems amazing that most don’t actually seem to be doing much about it. Of course, the challenge, as always, is in execution and for pharma this is particularly difficult.
One of the biggest challenges is that no one in the company has the responsibility to oversee trust and reputation (except perhaps the CEO). Who is responsible in your company at a very senior level to challenge behaviors, initiatives and strategic planning to ensure that everything it does improves its reputation and builds trust. Who challenges a pricing decision for a new product for example when it could negatively impact reputation? I doubt anyone seriously challenged some of the recent price increases and new product prices because of the negative impact on reputation. Pfizer’s recent decision to merge with Allergan is yet another example and has been called a disgrace by many and a ‘cynical move designed to boost its stock price’ with Pfizer itself described as a ‘greedy tax exile’. Profits seem to always trump these ‘soft and fluffy’ concepts within pharma.
Closely linked to reputation are the topics of new business models and patient centricity.
There is strong support for significant change to the pharma business model. More than 67% agree that pharma’s biggest competition will come from outside the industry and 52% believe the model will change quickly even as it continues to deliver good results.
Even with the clear threat of outside industry players threatening to further disrupt healthcare pharma’s response seems remarkably relaxed and lacking both seriousness and urgency.
Business model redesign has been high on pharma’s agenda’s for more than 10 years. This is not anything new at all, but the traditional model continues to be the mainstay of the industry. What is it going to take before this change actually takes root?
Perhaps patient centricity will be a catalyst for change, although more than 54% of respondents believe their company is good or excellent at positioning patients at the centre right now.
If the majority believes they are already pretty good at this, then there seems to be little impetus to drive the change even more.
The majority of respondents commented that they are driven to make a genuine difference to patient’s lives, which is no surprise, as this has always been a strong point for the industry. What should be a surprise is that it is only 57% of respondents and not much more. It does raise the question; what drives the other 43% of respondents if it is not about patients?
Taking the pulse of the industry has highlighted that it remains healthy today but that there are some very worrying underlying issues that could well negatively impact the business in the very near future unless seriously addressed today.
For more information check out www.eyeforpharma.com.