4 Step Roadmap for Pharma Companies to Get in the Game
In the past century, advances in medicine belonged mainly to the R&D departments of pharma companies. However, companies in the pharmaceutical industry are currently experiencing a wave of challenges, resulting from what is called the new health economy. They comprise of factors such as consolidation among providers, the changing demands and expectations of patients, increasing […]
In the past century, advances in medicine belonged mainly to the R&D departments of pharma companies. However, companies in the pharmaceutical industry are currently experiencing a wave of challenges, resulting from what is called the new health economy. They comprise of factors such as consolidation among providers, the changing demands and expectations of patients, increasing cost pressures from payors leading to calls for pricing reform, and the declining autonomy of the individual physician as rule-based, protocol-driven care becomes ascendant. Pharma companies have always interacted with consumers by marketing directly to them and involving patients in clinical trials. In this new era, it is imperative for pharma companies to become more proactive with large communities of patients and go beyond lip service in meeting the needs of a wide swath of consumers. Though the sale of products will always be a priority, in the new health economy, companies in the pharmaceutical industry will also have to concentrate on delivering positive outcomes: health, well-being, and optimal management of illness among targeted populations. Pharma companies can achieve this by deploying and adhering to these four steps:
Redesign organizational structure based on patient outcome
Traditionally, pharma companies are structured to produce drugs. However, there is a fundamental shift in the way people relate to products and brands. The companies in the pharmaceutical industry that are more likely to make it to the top are not those who focus on merely selling a product, but those that seek to address a customer’s need. This shift is commonly termed as customer 4.0. Earlier, pharma companies tried to entice customers to buy a product and invest in their brand. But the evolution of technology demands companies to fit into the customer’s universe and cater to their needs, and not vice versa.
Pharma companies often engage in activities that do not add value to their core competencies. Although in a rapidly changing sector, it is easy to allow the sense of urgency to pull pharma companies away from their primary direction. Having a clear vision and understanding of the company’s goals and purpose will enable companies in the pharmaceutical industry to be more agile, quickly making decisions in line with their core strategic goals and competencies. Abbott, one of the most innovative biotech companies, is a great example of how pharma companies can streamline innovation. In 2013, the company found itself pulled in two directions: medical device development and drug discovery. To cater to these competing interests, Abbott split its business into two: a medical device company (retaining the Abbott name) and a pharmaceutical company (AbbVie). Doing so, Abbott streamlined its resources toward innovative medical devices and allowed AbbVie to focus on drug development.
Promote a culture of innovation
Developing an innovation culture is a highly complex process. It requires building flat, diverse teams with empowering leaders. While there is no perfect formula for innovation and change management, the best teams often have strong leaders who create room for experimentation so that their employees can be creative and innovative without the fear of failure. These teams focus less on controlling their direct reports and give more emphasis on inspiring them through a clear mission. Pharma companies have a proven record of being good at creating this openness. According to a recent survey, 91% leaders in the pharmaceutical industry say they are good at rewarding employees for innovation even if the project fails.
Cultivate networks of innovation
Pharma companies also need to invest in their networks and source innovation from outside. Recent research also suggests that a good majority of innovation leaders are successful when sourcing innovation from outside. For instance, Johnson and Johnson introduceD JLABS, which provides lab space and J&J mentorship to early-stage life science entrepreneurs at a reasonable price. JLABS teams inspire greater innovation amongst J&J employees and continue to produce a large number of new J&J collaborations. This program highlights the rising importance of developing authentic relationships and inter-organizational trust building.