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Pharma Leadership Challenge In Post Covid Paradigm

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Bringing a long cherished relief to many, on September 15, 2022, the World Health Organization said, ‘we can see the Finish Line’ for the COVID-19 pandemic but it’s not over yet’. As I see today, several things are changing pretty fast in this scenario. Such as, not so long ago – on September 27, 2021, the same global health organization predicted differently: ‘World Will Live with COVID for Foreseeable Future.’ It further highlighted “It is dangerous to assume that omicron will be the last variant, or that we are in the endgame. On the contrary, globally the conditions are ideal for more variants to emerge.” The Wall Street Journal also reported on September 18, 2022 that the US President Joe Biden too  feels, ‘Covid-19 pandemic was over’ in the United States.

Be that as it may, I reckon, the world is not going to replicate to the pre-Covid mode of working, any longer. The Covid-19 pandemic has clearly made some impactful changes in the most work scenario, across the world. This has been revealed by several recent studies. With this perspective, in this article, I shall dwell on the challenges that the pharma leadership teams will face or are already facing, as the world shifts towards the post Covid paradigm.

Four critical areas for change:

To illustrate this point, I will focus on just three critical areas for pharma players, as follows:

  1. No going back to the pre-Covid mode of working
  2. Create a more employee focused organization for future success
  3. Determine the right size of digitally savvy field force in the new paradigm 
  4. Increase online share of voice in represented therapy areas and identify pharma’s digital world opinion leaders.

Why no going back to the pre-Covid mode of working:

With the onslaught of the Covid-19 pandemic on people’s lives and livelihoods fast receding, the need for some critical changes in several areas of pharma business, is now being felt by some forward looking astute pharma leadership teams. Recent studies, such as, the Gartner paper of June 16, 2022, among others, vindicate ushering-in some of the following changes in workplaces:

  • Ongoing changes in the way people work have transformed employees’ relationship, and their expectations of work.
  • Hybrid work could be a great opportunity, particularly for diverse talent..

Another article in this regard, published in the Harvard Business Review on January 13, 2022, capture 11 trends that will shape the work, in general, from 2022 and beyond. When I put some of these in the pharma space, it may include the following:

  • Employee turnover will continue to increase, as hybrid and remote work becomes the norm for knowledge workers in pharma companies.
  • Many repeated managerial tasks at various levels, will be automated, creating greater space for them to build more human relationships with their peer group and direct reports.
  • The tools used for working remotely are also being used to measure and improve employee performance on an ongoing basis.
  • The complexity of managing a hybrid workforce may drive some employers to evaluate a ‘return to the office’ with its pitfalls and benefits.

Thus, creating an employee focused organization becomes critical.

Creating an employee focused organization will be critical:

In the current scenario, the importance of being able to afford employees maximum flexibility, adapting and flexing to their individual circumstances and needs, is increasing manifold. This, has also come out very clearly in a number of studies, including one paper of the Healthcare Consulting Group (HCG), as reported on July 25, 2022.

Thus, nurturing employees’ desire for personal and professional growth, besides motivating them with a strong sense of purpose to their work, has become foundational to being an attractive workplace, more than ever before.

Is the pharma industry right-sizing the digitally savvy field force?

One can pick up several signals in this direction from what is happening, as the industry is opening-up with a rapidly declining onslaught of the Covid-19 pandemic. Various studies vindicate the intent of field staff reduction by the pharma industry. Today’s environment requires a digitally savvy field force of optimal size, which may vary from company to company.

For example, the article published in the Reuters Events Pharma on May 5, 2022, in this regard, elucidated “While Reuters Events Pharma’s own recent polling of the industry suggests a moderate reduction in numbers over the next couple of years, others see signs of more dramatic change.”

Many pharma players are now pondering – during Covid pandemic when companies were making so many less face-to-face calls, sales were OK. Now, when the intensity of the pandemic is receding, do they need the previous sales force numbers to make more such calls?

The general feeling appears to be that the old practices aren’t as productive as they were before, in the changing scenario. Thus, the paper underscored: ‘So with the largest players are already thinking about how to do more with fewer boots on the ground, how do they go about it?’ It concluded by saying: ‘No one is saying it is easy then, but the imperative for change is clear.”

Pharma customers’ online engagement is increasing with a low share of voice of companies:

This is yet another critical area of change where drug industry needs to strengthen its online voice. Several studies indicate that even a tiny part of most pharma companies’ online conversation about their represented disease and therapy areas doesn’t get captured in Google search. For example, yet another recent paper on this subject, published in the Reuters Events Pharma on July 05, 2022, confirms this point.

The article highlights: ‘Around 80% of patients Google for a recommended or newly prescribed medication. And doctors routinely use search engines too – to stay up to date, to verify assumptions and so on. Indeed, it may be no exaggeration to say that the answers found online are possibly the biggest influence on patients and HCPs today. Understanding their real-world digital information experience is, therefore, critical to identifying the content influencing their behavior.’

In today’s world, what these customers see and hear via search engines may shock many, the author emphasized. The study also reveals, despite many pharma companies’ investment in evidence-based, balanced, and accessible content designed for HCPs and patients, this is often buried far out of reach from the billion-plus health-related questions being asked of Google each day. ‘Pharma’s online voice often simply isn’t cutting through,’ it concluded.

What needs to be addressed soon in this area:

Each pharma marketer may wish to ascertain through data-based studies, which voices are dominating these conversations. And also, the nature and quality of the company’s own digital conversation and its share of voice. This is, besides getting to know who the digital opinion leaders are. Then, the task will be to find out ways to work with these people and share the company releases with them, requesting for their inputs, if any.

Conclusion:

The experience of the Covid pandemic and lockdowns has changed work patterns in many industries from what those were in the pre-Covid days. The drug industry is no exception. According to recent studies, two out of every five workers have either switched jobs or are actively looking for another that will fit into their working needs better, and with some remote work. This trend, being a common expectation, is gaining ground.

Thus, making an employee centric organization is now more important than ever before. Bringing together the best of remote working and office locations, as centers of excellence for team building, learning and innovation, is emerging as a central part of the pharma leadership challenge, as an HCG study, reportedly, also points out. It is generally believed that employees ‘who feel connected to purpose at work are more productive and more likely to stay.’ In tandem, pharma leadership teams also would require leaving a lasting impact on everyone’s work, which will be more tangible to them.

Alongside, as several contemporary studies indicate, and I also wrote in this blog on April 29, 2019 – ‘Adopt A Hybrid Business Model For Better Sales – Not A large Field Force,’ each company’s field force number also require a fresh look now with a focus on digitally savvy individuals. Another reason being pharma customers’ online engagement is increasing fast where most companies have a very low share of voice, as the search engine reveals. Consequently, identifying, partnering and in-depthunderstanding of key digital opinion leaders has become critical in creating a digital content that will influence the customer behavior. As reported on September 26, 2022, pharma major Sanofi, apparently has taken a major step in this direction.

From this perspective, it appears that the pharma leadership teams have a task cut out for them to effectively respond to the challenges of change in the post Covid paradigm – in search of pharma business excellence.

By: Tapan J. Ray     

Disclaimer: The views/opinions expressed in this article are entirely my own, written in my individual and personal capacity. I do not represent any other person or organization for this opinion.

Fostering EQ For Pharma’s Excellence In The New Normal

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On February 25, 2021, one of the top Indian business daily flashed a headline – “It will be working from home, post-pandemic too at many top companies.” It wrote, companies like, Tata Steel, Philips, Infosys and Maruti Suzuki are evaluating job roles to permanently enable employees working from home, or remotely – even after the pandemic. This is just one example, out of many unique outcomes of last year’s disruptive business turbulence, causing a potential mental or emotional impact on many employees.

Virtually across industries, many such significant changes have taken place in several facets of businesses including traditional operational processes. As has been widely witnessed, many desk-bound office jobs – temporarily, partly or fully – shifted to remote working – almost overnight, as it were. Such a shift is being contemplated in several work-areas by a number of drug companies, as well.

For understandable reasons, another concurrent and instant demand surfaced for a critical hard skill – involving applications digital tools and platforms. This was mostly to ensure that key business communications and customer engagements, at least, keep ticking during the crisis, despite unprecedented initial headwinds.

However, sans a catalytic soft skill that helps address several current-environment specific several organizational needs, even applications of digital skills are unlikely to be able to leverage the full potential of digitalization. While navigating through today’s uncharted frontiers, where there are no footsteps to follow, the organization will need flexibility and resilience among leadership, ensuring employee adaptability to change, and creating a new climate of fostering creativity with digital technology.

Interestingly, this soft skill – ‘Emotional Intelligence’ – often referred as ‘Emotional Quotient’ or EQ, wasn’t discussed, as much, for various reasons. In this article, I shall deliberate, why this much-known soft skill is indispensable for business excellence in the new normal – from the pharma industry perspective.

EI/EQ in business isn’t a new idea, but more important now than ever before:

Peter Salovey and John D. Mayer coined the term ‘Emotional Intelligence (EI)’ in 1990 describing it as “a form of social intelligence that involves the ability to monitor one’s own and others’ feelings and emotions, to discriminate among them, and to use this information to guide one’s thinking and action”.

In 1995, Daniel Goleman in his book ‘Emotional Intelligence’ defined EI as the ability to:

  • Recognize, understand and manage our own emotions and,
  • Recognize, understand and influence the emotions of others.

In other words, ‘this means being aware that emotions can drive our behavior and impact people (positively and negatively) and learning how to manage those emotions – both our own and others.’The ability to manage emotions is measured through Emotional Quotient (EQ).

EQ – a cutting edge of excellence, especially in the new normal:

Much before the pandemic, in 2018, McKinsey & Company had projected that between 2016 and 2030, demand for people with high EQ would grow across all industries. Again, in May 2021, the Company reiterated: ‘To meet this challenge, companies should craft a talent strategy that develops employees’ critical digital and cognitive capabilities, their social and emotional skills, and their adaptability and resilience.’

However, with unprecedented changes in pharma business dynamics, the process has been further accelerated. EQ is now expected to be a cutting edge for performance excellence – in any organization. Hence, digital savviness may not be just enough in the new order for organizational turnaround aspirants. Sans people with high EQ, among both – the leadership and staff members, digital transformation alone may not be enough for commercial success.

Long ago, Daniel Goleman epitomized it in his article - ‘What Makes a Leader?’ This was published in the Harvard Business Review (HBR) in January 2004, where he wrote: ‘IQ and technical skills are important, but emotional intelligence is the sine qua non of leadership.’ This old advice assumes even greater importance, in the new normal. 

With emotions prevailing in workplaces, high EQ improves performance:

COVID pandemic has demonstrated to all, including highly tradition bound and slow to change – the pharma industry that the name of the game of survival, particularly when a crisis strikes as a bolt from blue, is quickly adapting to changes. A time came as ‘national lockdown’ started – when a sense of losing control and confusion, virtually engulfed the work environment, which is so necessary for livelihood. A key example of these changes include, a sudden shift from remote working, related to remaining engaged with customers.

Alongside, home life and work life got merged for many. New ways of remaining in touch with customers, sometimes gave rise to a sense of seclusion or alienation, causing mental or emotional stress. Many employees’ keen desire and expectation of the return of the old normal – in the same form, are causing more emotional complications with them.

A study by EQ training provider TalentSmart also found that emotional intelligence is responsible for 58% of one’s job performance. Thus, any pharma company’s ability to be in sync with all employees, at the emotional level, is one the key requirements to boost performance. It will determine the effectiveness of digital tools given to employees to deliver the deliverables. Further, as other studies established, ‘the ability to connect with people on an emotional level – is crucial to maintaining strong and resilient teams.’

Some telltale signs of low EQ in an organization:

Some common telltale signs of low EQ in an organization, were well captured in an article with Covid pandemic in the backdrop. This was published in Inside HR on September 01, 2020. The manifestations of low EQ include, when employees:

  • Don’t want to take responsibility for their own feelings, but blame others for those,
  • Let things build up and then blow up,
  • Often overreact to life’s minor events while struggling to remain in emotional control.
  • Lack empathy and compassion,
  • Tend not to consider others’ feelings before acting,
  • Lack self-awareness of their own emotions and the emotions of others around them.

Such signals, if not addressed promptly, can lead to a number of adverse business outcomes. Especially when, quick adaptation to fundamental changes in the business environment, business operations and key customer behavior, is the name of the game. People’s EQ in an organization, could often stand between business success and failure – in the new normal, more than ever before.

Conclusion:

As pharma industry has started navigating through the new normal with wide-scale application of digital technology, employees also need to keep pace with these changes, and come on board. In such a ‘never before’ situation, emotional needs of both internal and external customers are to be properly understood, and effectively addressed, just as the need for digitalization within the organization.

Notably, low or high EQ are not genetic, neither are these pre-implanted in the brain by God. EQ comes as one learns through ongoing experience in life, and also from the advices of elderly, interaction with peers, superiors and training by professionals. This is a lifelong process of learning, which is continuously honed through practice in real life situations. It’s not bizarre, at all, if EQ of an individual has changed before, during and after the pandemic. What really matters is fathoming, how is the employee EQ today, monitor it continuously, and help the individual as and when required – to help the organization.

Several studies have established high employee EQ as a stronger predictor of success, that helps strengthen hard skills like digitalization by helping to think more creatively while using the tech tools and platforms. Thus, amid unparalleled changes in business operations, customer behavior and the need for quick adaptation to digital technology, fostering employee EQ to encourage them committing to the corporate shared goal, is an imperative for pharma’s performance excellence - more than ever before.

By: Tapan J. Ray      

Disclaimer: The views/opinions expressed in this article are entirely my own, written in my individual and personal capacity. I do not represent any other person or organization for this opinion.

 

Is Pharma Industry A Late Learner, Always?

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Several upcoming concepts in the pharmaceutical industry are becoming buzzwords today. But, most of these were recommended by stalwarts several decades ago. Interestingly, the prevailing scenario is no different, even related to wide-scale adoption of a number of cutting-edge technologies, to squarely face the ongoing challenge of changing market dynamics. Various studies point out that other industries are making transformative use of these – to be on the same page with their customers, much faster.

Pharma is considered to be a late entrant in the digital space, too. It’s still not quite clear to many, the extent by which ‘Digitalization’ is transforming the way pharma industry functions – aiming at unleashing huge opportunities for value creation – from supply chain to manufacturing – right up to creating a unique customer experience. As this subject was well deliberated in the August 2016 article on McKinsey Digital, I am not going to delve into that area today.

Therefore, the question that comes up: Is pharma industry, in general, a late learner – always, to be in sync with its contemporary customers? For exploring this point, I shall focus mainly on four areas of current hypes in the pharma business, namely - ‘patient empowerment’, ‘patient-centricity’, ‘customer experience’ and ‘E-Patients’.

In this article, I shall dwell on this subject, ferreting out some critical recent findings on the relevance of these not so recent concepts in today’s perspective. Let me start by diving deep into the time capsule.

How old are these concepts?

Industry watchers may know that these are not new concepts, in any way. The relevance of ‘patient empowerment’, ‘patient-centricity’, ‘customer experience’ and ‘E-Patients’ in the drug industry has not unfolded today, neither are these new ideas. The American medical doctor - Thomas William ”Tom” Ferguson (July 8, 1943 – April 14, 2006) was an early advocate for ‘patient empowerment’.

Since 1975: “He urged patients to educate themselves and share knowledge with one another and urged doctors to collaborate with patients rather than command them. Predicting the Internet’s potential for disseminating medical information long before it became a familiar conduit, he was an early proponent of its use, terming laymen who did so – ‘E-Patients‘.”  

Technology follows a concept and not vice versa:

With ‘E-Patient’ terminology, Dr. Thomas Ferguson talked about empowered, engaged, equipped and enabled patients. I reckon, even after close to 45 years, most of the drug industry, is still not quite there – ‘Digitalization’ initiatives notwithstanding. This is because, technology follows a concept and not vice versa.

Why it’s so?

I reckon, this is primarily because, many stakeholders often don’t pay much importance to a critical fact, which is: ‘Patient expectations and needs can differ considerably from the aims and objectives of health care providers, at both the policy and delivery levels,’ and also by many drug companies. Still, most of these entities are yet to lap up this concept.

Is reviving focus on ‘Patient Centricity’ a realistic proposition today?

Several studies in this area have concluded, to be accepted by patients, the patient experience should be the key driver for the development of solutions.’ These include, medicines, devices, information, support programs and even digital apps. Among many others, one such study was published on March 28, 2017, in the SAGE Journals, titled, ‘Patient Centricity and Pharmaceutical Companies: Is It Feasible?’

The basic question of its feasibility would prompt: ‘Would this approach help pharma players to make enough profit with the drugs?’ While addressing this query, the researchers put across the following points that need to be seriously reflected on:

  • Profit is necessary. But, how drug companies make and use business ‘profit’ is more important for long-term business sustainability.
  • It requires a clear vision at the top of creating and delivering ‘customer value’ as patients will perceive, followed by a robust assertion of ‘Patient Centricity’ across the business domains.
  • This will help break out of the cycle of “recover costs of R&D – make a profit – invest in new drugs – make more profit.” The new ball game will be – profit through customer satisfaction – invest in new drugs for greater ‘customer value and more customer satisfaction’
  • Such commitments, in turn, will help generate not just reasonable profit, but credibility with external stakeholders – such as, patients, regulators, media, etc. – creating an invaluable reputation for the organization, as a future growth booster.

Since old practices have continued for very long, virtually unchanged, a legacy factor has now crept into the system, mostly as a retarding force.

A legacy issue to overcome:

As the above research article underscores: ‘Historically, the pharmaceutical industry’s role has been to develop the science and medicines for prevention or treatment of disease.’ Whereas, ‘Patient Centricity’ involves patients as stakeholders in this scientific process. It calls for an innovative mindset, whereby ‘the industry is challenged to engage and collaborate with patients when deciding the best course of action.’ This need is now palpable within the industry, at the long last. 

Palpable needs for a new focus on designing ‘healthcare solutions’:

With the shift in the environment around the industry and its stakeholders, including patients, are feeling the need to ferret out some old classic concepts for a new focus in designing various ‘healthcare solutions.’ For this purpose, as the above research article reiterated, a better understanding of ‘patient experience’ at critical points, in the course of the diagnosis and treatment of the disease, would help designing more effective ‘health care solutions’ for better patient outcomes.

The commercial necessity for better patient outcomes, merits ‘Patient Centricity’ at the core of the pharma business model, which, in turn, calls for a shift in the cultural mindset within the pharmaceutical industry. Such a shift would involve, among others:

  • Redefining the core strategy, organizational structure, processes and capabilities to focus on transparency and value creation for the patient.
  • A change from a disease-centered to a patient-centered strategy, and from a product-led to a patient-led development process.
  • Listening to and partnering with patients, and understanding the patient perspective, rather than simply inserting patient views into the established process.

Therefore, ‘patient-centric’ initiatives of any company should begin with the basic question: how can the company make a difference for patients?

The new realization: Compete better to win, neutralizing healthcare consumerism:

To better compete and win even in the midst of evolving healthcare consumerism, instead of adding fuel to it around the world, including India, a new book – ‘Making the Healthcare Shift: The Transformation to Consumer-Centricity,’ brings some contemporary ideas where, again, many old ideas seems to have been tested with a new perspective.

Interestingly, the content of this book is based on over 60 executive interviews with the biggest names in healthcare and a quantitative research study. Some of these names include leading academic institutions, such as, the Mayo Clinic, USCF Medical Center; big drug companies like Pfizer, Lilly and Novartis. The book reveals, while healthcare organizations have recognized the need to change to ‘Patient Centricity, they often don’t know where or how to begin.

To help healthcare organizations reinvent how even traditional pharma players engage with consumers in the new paradigm, the authors identify five shifts that pharma players can make to better compete and win in this evolving landscape of healthcare consumerism. 

Need to ‘reinvent the wheel’, is more than ever before!

To ascertain the above point, I shall paraphrase just a few – ‘Patient-Centric’ and ‘Customer Experience’ related areas of the book along with my own views to help you to come to your own logical conclusion:

  • To provide a holistic disease treatment solution, keeping the patients engaged along the entire journey in the disease treatment process, pharma players should bring ‘consumer experience’ at the core of the business model. As I also deliberated in this blog that: ‘Enhancing End-To-End Customer Experience’ is, therefore, considered by many astute pharma marketers, as a vital ingredient of pharma brand building exercise. In that article, I articulated, such initiatives should cover, all the ‘’touchpoints’ and ‘episodes.’ Where ‘touchpoints’ are spots of contact or interaction and ‘episodes’ focus on end-to-end design of a specific customer-need for an organization. Aligning management and the front line around the customer experience, is critical.
  • As things stand today, the entire journey through the disease diagnosis and treatment process, in the current healthcare ecosystem, remains fragmented. Mostly because, it involves many ‘touchpoints’ and ‘episodes,’ comprising of different health care entities. Providers’ inefficiencies, of various types, encountered by patients at different points of this journey often lead to their frustration, causing an unpleasant ‘customer experience.’ To achieve this objective, by effectively addressing the aforesaid common denominator for all – ‘Patient-Centricity,’ is of paramount importance. This entails, as stated before, integrated measures for listening to and partnering with patients, alongside, placing patients’ well-being at the core of all healthcare business initiatives. From this perspective, ‘patient-centricity’ based on customer insights,represents a holistic approach to provide the disease management solutions.
  • With rapid advancement in medical science, culminating into several breakthrough innovations, the world has stepped into a new era of disease treatment solution. Increasingly, ‘one size fits all’ type of population-centric treatment, is giving away a sizeable space for a new ‘patient-centric’ variety of the same. Moving towards this direction would necessitate pharma players, along with all health care organizations to acquire a deep insight on patients. The acquired insights must be based on in-depth analysis of a robust and contemporary sets of data, including demography, attitude towards health, treatment needs and preferred options available to the targeted audience.

This brings me back to where I started from. Dr. Thomas William ”Tom” Ferguson and maybe several others, as well, had recommended similar approaches over four and a half decade ago. We did not learn it then. But, while fighting against all odds, as the industry has been facing over some time, some companies are feeling the need of learning it now. Better late than never!

Conclusion:

It has been universally accepted that market dynamics keep changing in all industries, may be faster in some than others. Looking back, one can sense similar ongoing changes both within the pharma industry and the business and social and cultural environments outside, especially related to its stakeholders. When faster, proactive changes take place within the industry than outside, it delights the customers. Similarly, faster changes in the outside environment that industry fails to keep pace with – deliberately or otherwise, will invite strong headwind impeding growth of the business and even denting its reputation. Although, the former one is desirable, the latter prevails in most areas of pharma business. A Working Paper of the Harvard Business School wanted to understand ‘How do organizations learn?’ It found, among others:

  • Performance outcomes can be augmented, if one deliberately focuses on learning from experience accumulated in the past.
  • The competitive advantage of firms critically depends on the skills of individual contributors. Hence, the centrality of individual and organizational learning is a critical factor for competitiveness of any organization.

This brings us to the question, what is a learning organization. From many similar definitions of the same, let me quote the following one, as it is apt, simple and old enough for all to have learned: “A Learning Organization is the term given to a company that facilitates the learning of its members and continuously transforms itself.” (M. Pedler, J. Burgoyne and T. Boydell, 1997)

Keeping today’s deliberation in perspective, one may possibly conclude, quick individual learners, including the organizations, can offer better performance outcomes than late learners. As the pharma business is encountering a strong headwind for quite some time, it is up to the readers making out, what type of learner the industry, in general, is, and more importantly, why it is so?

By: Tapan J. Ray   

Disclaimer: The views/opinions expressed in this article are entirely my own, written in my individual and personal capacity. I do not represent any other person or organization for this opinion.

While Pharma Leadership Change This Atypical Skill Counts

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Effective September 01, 2019, the global pharma major Sanofi will have a new CEO, as the present CEO retires attaining his retirement age of 65 years. This appears to be a mandatory announcement from the company, as is required during the top leadership change in any large and listed organization.

However, there is something novel, as well, in this announcement, especially when specific qualities, skills and experience of the new CEO were highlighted by the company’s Board of Directors. According to Sanofi Press Release, the new CEO – Paul Hudson “has proven his strategic vision, his strong leadership and his ability to achieve the greatest challenges, particularly in terms of innovation and digital transformation.”

Among the stated experience and skills, the one that appeared atypical to me, is the experience of digital transformation, particularly in the position of the CEO of a global pharma major. I In this article, I shall, therefore, explore, why knowledge and experience in this atypical skill is gradually becoming critically important for pharma leadership positions, at all levels.

Why is the need for digital transformation of pharma business?

According to the Internet Trends Report 2019 by Mary Meeker, at 3.8 billion internet users, more than half the world’s population is now online and it is growing. This number would obviously include patients.

As we know, the core purpose of pharma business is to offer a unique patient experience during any disease treatment process. And, the expectations of which from Internet-savvy individuals will be significantly more for various related reasons.

To achieve this objective, drug players would always require to be in sync with customers’ perceptions, expectations and aspirations, among others. Moreover, it’s also not ‘one size fits all’ type of a solution. These will significantly vary for different patient groups, so are the processes of engagement with them – based virtually on real-time information.

Interestingly, the core purpose of digital transformation is also to facilitate this process, with a great amount of precision. The entire process of creating a unique patient experience, involves generation of a massive amount of customized data, customize analysis of which is done through sophisticated analytics, and thereafter, translating and using them as key strategic business inputs, on an ongoing basis. Traditional organizational methods, systems and processes are incapable to deliver the same. Hence arises the crucial need of digital transformation of the organization, across the board.

The transformation is not just about software, hardware and data: 

That said, it is also essential to realize that digital transformation is not just about software, high-tech hardware, mobile apps and sophisticated wearables and data. These are, of course, some of the vital tools – used while transforming a company into battle readiness to create and provide a unique customer experience.

Such unique experience for each customer should cover all touchpoints, spanning across – before, during and after treatment with the company’s medication. This, in turn, helps generate an increasing number of prescriptions from doctors, which otherwise would not have been possible, following the conventional means.

Why this atypical skill is in demand today?

Like any other transformation process within an organization, digital transformation should necessarily be driven by the company CEO, having adequate experience in this area. Even the Board of Directors of many pharma players believes that such a CEO can facilitate the process faster and more effectively. Hence, the demand for this atypical skill is increasing, also for a pharma CEO position, besides leaders in various functional areas, as it is being considered as pivotal to achieve the core purpose of a pharma business, in the digital world.

Thus, if a CEO doesn’t properly understand, how the digital world operates with increasing number of visitors in the cyberspace and convinced about its relevance for business excellence, the organization would ultimately lose its competitive edge. One may, therefore, question, did the need for this atypical skill also arise during the selection of the new CEO of Sanofi?

Is this atypical skill for a new CEO more important now?

The answer, I reckon, could be both, ‘probably yes’ and also ‘no’.

‘Probably yes’, mostly because, being an uncommon skill for a pharma CEO, so far, it arrested the attention of many while reading ‘Sanofi Press Release’, for the appointment of their new CEO. Nevertheless, Sanofi is not the first pharma company placing so much of importance on digital transformation, especially for the key leadership positions. In an interview with the Wall Street Journal (WSJ) of February 18, 2018, the CEO of Novartis said: “We need to become a focused medicines company that’s powered by data science and digital technologies.”

Why it is so important for a pharma CEO?

The AT Kearney paper titled, “New Medicine for a New World – Time for Pharma to Dive into Digital,” also captured that an increasing number of pharma customers are now getting engaged and have started interacting in the digital space, more than ever before. This trend is fast going north – becoming an ‘in-thing’ of the industry, as it were. But more probably to be seen as trendy or display that they are also in it, by ‘dipping a toe in the digital waters.’ Whereas, ‘it’s time to take the plunge,’ as the paper cautions them.

‘Plunging into the digital water,’ doesn’t mean sending people to some external training program – with the word ‘digital’ prominently featuring as the course objective. It means bringing out ‘digital transformation’ of the entire organization, spearheaded by the CEO. The leadership of each functional area would then implement from the same playbook, with a structured and custom-made plan designed specifically to achieve the vision, mission, goals and values of the company.

We have recent examples of, at least, two top global pharma majors taking a plunge in the digital water to make the digital transformation of the organization a reality. The key purpose of the same, is to create a unique customer experience, being on the same page with them, in more effective ways, for business excellence. To move in this direction, the organization must imbibe the non-negotiable principle – ‘digital first,’ across the organization.

Only the CEO can decide ‘digital first’ as guiding organizational principle:

None other than the CEO of a drug company, can decide that ‘digital first’ will be the guiding principle of the company, across all the functional areas of the business. As the above paper articulates, it ‘should be explicitly incorporated into core business processes.’ It further says: ‘Top management must challenge any parts of the business that have not explicitly considered the opportunities from digital in their plans.’

Functional leaders to be in sync with digital transformation: 

All in the pharma organization, across all functions, must work for the end consumer of any pharma business – the patients. Every single employee in the company should strive delighting them with the company’s products and services, at every touchpoints, during their quest for relief from illnesses. As I said before, this is the single most important factor that determines not just the pace of growth of a drug company, but help enhance its reputation, too. It goes without saying, its ultimately the patients who are playing a catalytic role in the digital transformation of an organization.

It is essential for the CEO to make sure that entire corporate, functional and even departmental leadership teams are in tune with the need of digital transformation of the organization. Despite the detail explanation, if some remain unconvinced about the rationale behind the transformation of the core business process, the right leader should assume the responsibility.

This is because, even with one loose knot at the leadership level in this area, the entire objective can seriously get thwarted – down the line. Such changes, as, if and when required, can be achieved in various different ways, not through attrition alone. For example, by encouraging them to work with members of his peer group who can set good examples to emulate.

Brand promotion to physicians will still remain as important:

In tandem, no company should lose sight of the fact that their face-to-face interaction with physicians, will continue to play an important role in brand promotion. Primarily because, doctors and hospitals help patients to get desired solace from ill-health by prescribing recommended medicines, and consequently, will keep prevailing as an integral part of the pharma marketing process, supported directly or indirectly by every employee in the company.

The key challenge in digital transformation:

The key challenge in the digital transformation of a pharma company is broadly possible inflexible or a rigid mindset of some of its leaders. This is generally fueled by the fear of moving out of their respective comfort zones – rather than resources and expertise required to make the technology put to use. A well-running-business with a grand idea for the future, will generally be able to garner necessary resources and other wherewithal, without much problem.

All pharma leaders should always consider themselves as an important solution for the future success of the organization, Otherwise, he or she may be construed as a part of the problem and a hindrance in achieving the corporate goal and should make way for the capable ones, in this area. Hence, selecting leaders with the right spirit to make digital transformation effective, is so critical for the CEO.

To commence this journey, the leaders may either be willing to acquire the experience of a disruptive digital transformation, guided by the domain experts or may be recruited from outside having the necessary experience. Collective and well-coordinated steps towards this transformation can neither be tentative, nor should it commence without having the right leader at the right place with required will and experience.

Digital players entering into health space with game changing ideas:

Pharma players should also note, how the big technology companies, such as, Apple, Google, Microsoft and Amazon, besides many startups, are trying to create space for themselves in the health care arena. Several of them are also trying to reinvent health care with zest, much beyond what traditional drug companies could even envisage, till recently.

The digital transformation of the organization would help drug players to align the company’s business model with the tech companies in those specific areas to reap a rich harvest. More opportunities will also unfold – either to collaborate with them for targeted projects or moving into the tech space with well-calibrated measures, for business synergy. Without digital transformation of business, either facing such competition or benefitting from the available opportunities, will be challenging for drug companies.

Conclusion:

In the digital world, while patients are emerging as a key driver of change in the health care space, traditional pharma operational systems, including sales and marketing are likely to give a diminishing return on investment. Although, many drug companies can sense this ongoing metamorphosis, several of them are still wondering how to go about it. Moreover, to test the ‘digital water’, some of them have started converting several traditional operational methods, systems and processes in the digital format, as well. Yet, are unable to fathom, why such efforts are not clicking – leading to a quantum increase in the operational efficiency – in pursuit of excellence.

The good news is, global pharma organizations, such as, Sanofi and Novartis, besides several others, have realized that incremental performance improvements with small tweaking here or there, across the organization, aren’t just enough. The corporation needs to move towards a holistic digital transformation, spearheaded by its CEO, having experience in this process. This new breed of pharma CEOs, well-supported by his team of leaders, fostering a burning desire to produce pace setting results, can usher in this ‘disruptive’ transformation. Because, they realize, traditional pharma operational systems, when tempered through the fire of the digital transformation process, can yield game changing outcomes for the organization.  The entire process, as it comes to fruition, helps delivering greater customer value, creating a unique customer experience – similar to what customers want – on an ongoing basis.

In fine, strategic intervention of this genre, initiated by the CEO and cascading down the organizational hierarchy, creates a whole new patient-centric outcome, which is much more than what a company can get through re-engineering the operational processes. Hence, especially the young mangers of date, may wish to note note that during virtually every leadership transition, this atypical skill is now likely count much more than ever before – with an ascending trend.

By: Tapan J. Ray  

Disclaimer: The views/opinions expressed in this article are entirely my own, written in my individual and personal capacity. I do not represent any other person or organization for this opinion.

Why D&I Is A Powerful Growth Driver For Pharma Industry

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‘Diverse India’ now needs an ‘inclusive society’, vowed the Prime Minister of India, after his massive electoral win on May 23, 2019. Many may consider a part of it as rhetoric, notwithstanding, as and when the government policy of Diversity and Inclusion (D&I) gathers wind on its sail, the realization of its importance would reverberate – even in the corporate world, including the pharma industry, especially in India.

I discussed this subject in my article of June 25, 2018 ,in the context of transforminga pharma company to a customer-oriented, profit-making organization, with implementation D&I within the organization. However, in this article, I shall deliberate, over and above, the current status of D&I in the pharma industry, why most drug companies are still not leveraging it as one of the powerful business growth drivers. While opening this discussion, let me recapitulate what these two words mean to us, and their importance in the drug industry.

Recapitulating D&I:

As there are several, but similar definitions of D&I, I am quoting below just one – from the Ferris State University. It goes, as follows:

  • “Diversity is the range of human differences, including but not limited to race, ethnicity, gender, gender identity, sexual orientation, age, social class, physical ability or attributes, religious or ethical value system, national origin, and political beliefs.”
  • “Inclusion is involvement and empowerment, where the inherent worth and dignity of all people are recognized.”

The relevance and importance of D&I as a corporate growth policy for the drug industry is immense. It will not just, help them recognize and create business policies, based on diversity in people – a wide range of human differences in their consumers or potential consumers. In tandem, it will also help promote, and sustain a sense of belongingness with the society and communities where it operates – their values, beliefs, expectations and desire for a healthy living.

D&I begins within the company, and for the customers:

There are clear indications that many pharma companies are slowly, but surely realizing that for a consistent and sustainable financial performance the whole approach to business needs to undergo a metamorphosis. One such area of transformation, is a sharp focus on effectively satisfying a set of well-defined expectations of both their external and internal customers.

This journey begins with the creation of a Diverse and Inclusive (D&I) workplace. Nevertheless, the key goal remains – meeting expectations of the society where the drug companies operate, including a diverse set of customers – by saving and improving their quality of life, with affordable and accessible medicines.

While talking about diversity to Business Insider on January 10, 2018, GlaxoSmithKline CEO Emma Walmsley also reiterated, for a future facing employer in an industry, D&I should be a priority corporate strategy – for aggressively modernizing the business.

D&I ‘may be most important in the health care industry’:

This has been well-articulated even in the Workforce – a multimedia publication, where it says: D&I ‘may be most important in the health care industry, where the workforce needs to be both business savvy and socially empathetic to serve their increasingly diverse communities.’

Quoting another CEO, a different article titled, ‘Diversity and inclusion in the pharma industry’, published in PMLiVE on June 27, 2018, emphasized: ‘The global Biopharma industry is one of the most powerful and important industries today, directly affecting the lives of billions of people around the world on a daily basis. In order to understand and meet the critical unmet medical needs of patients, the industry must represent the population it serves.’

D&I is a growth driver for an organization:

“Many successful companies regard D&I as a source of competitive advantage. For some, it’s a matter of social justice, corporate social responsibility, or even regulatory compliance. For others, it’s essential to their growth strategy.” This was highlighted in the January 2018 research paper of McKinsey titled, ‘Delivering through Diversity.’

The article further elaborates: ‘D&I is a powerful growth strategy for an organization because it creates ‘a diverse and inclusive employee base – with a range of approaches and perspectives – would be more competitive in a globalized economy.’

Importantly, this research established a statistically significant correlation between greater levels of diversity and inclusion in company leadership and a greater likelihood of outperforming the relevant industry peer group on a key financial performance measure – profitability.

Some drug companies are moving in this direction:

That some drug companies are gearing up to adopt this growth strategy, but still there is a lot of ground to cover in this area, gets reflected in the December 2018 ‘Diversity & Inclusion Benchmarking Survey’ of PwC. The survey included 183 corporate respondents from 5 regions and 15 countries. As many healthcare organizations have publicly declared their commitment to D&I, the study wanted to measure how they have translated strategy into execution and what impact it is leaving on the employee experience. The following are some of the key findings

  • While D&I is a stated value or priority area for 68 percent of organizations, only 51 percent of respondents disagree that diversity is a barrier to progression at their respective companies. Thus, ‘Diversity still remains a barrier to progression.’
  • Only 4 percent of healthcare organization’s D&I programs reach the highest level of maturity.
  • D&I program goals are quite varied. For about 38 percent it’s a way to attract and retain talent – 25 percent – a way to comply with legal requirements – 17 percent to achieve business results – 13 percent to enhance the external reputation and 8 percent to respond to customer expectations.
  • Interestingly, in 39 percent of cases there was no D&I program-leader in place, 32 percent cases the person reports to senior executives, 19 percent of cases the responsibility was assigned to staff with non-D&I responsibilities and only in 10 percent of cases – the leader is a peer to C-suite.
  • Only 29 percent leaders are tasked with specific D&I goals.

These may not be the points to cheer about – not yet, nonetheless, the survey findings send a clear signal about the beginning of D&I in the pharma industry.

Two facets of D&I for a pharma company:

As I said before, D&I is more important in the health care space, especially for drug companies, where the employees across the organization not just be business savvy with patient orientation, but also be inclusive and socially compassionate to benefit the diverse communities.Thus, there are two clear facets, I reckon, around which organizational D&I policies, especially for pharma players, should be formulated, as follows:

  • For employees within the organization.
  • For stakeholders outside the organization – putting patients at the core of the business strategy.

The above PwC survey is on the first one – D&I for employees within the organization. However, a holistic D&I policy requires dovetailing business savviness with a socially empathetic mindset to serve increasingly diverse communities, is even more challenging.

More challenging is dovetailing business savviness with social empathy: 

To serve increasingly diverse communities, dovetailing business savviness with socially empathetic mindset, appears to be more challenging for the pharma industry, in general. Its manifestations are varied, such as, dented image or its declining reputation – leading to trust deficit with many stakeholders, including patients. Likewise, one of primary causative factors that give rise to such manifestations is considered to be in the drug pricing area.

The current scenario in this area has been captured in a paper titled, ‘Curbing Unfair Drug Prices’, published by The Yale Global Health Justice Partnership (GHJP), Yale Law School, Yale School of Public Health, National Physicians Alliance and Universal Health Care Foundation of Connecticut. The article unambiguously states, the high cost of prescription drugs is unsustainable, wherever it is. Spending on prescription drugs is increasing, either for different payers, or directly to patients through ‘out of pocket’ expenditure – at a faster pace than any other component of health care spending. Consequently, it is forcing many patients to skip doses of critical medicines, and several others to choose between their health and necessities, like food and rent.

The paper adds: “Meanwhile, the pharmaceutical industry continues to launch new drugs at exorbitant prices, increase prices of many old drugs without justification, and reap record profits. Evidence has unequivocally shown that high drug prices are not linked to the actual costs of research, development and manufacturing. Instead, inflated drug prices are a result of drug manufacturers’ power to charge whatever price the market will bear. The need for legislative action is urgent.”

One of the most recent examples of such jaw-dropping drug price was reported by Reuters, along with many others, on May 25, 2019 as: “Swiss drug maker Novartis on Friday won U.S. approval for its gene therapy Zolgensma for spinal muscular atrophy (SMA), the leading genetic cause of death in infants and priced the one-time treatment at a record $2.125 million.”

That said, achieving this facet of D&I, is not just desirable, but also necessary to gain a sharp and well-differentiated competitive edge in sustainable financial performance. It is noteworthy that to be successful in this area, one of the key requirements is to assign specific accountability for D&I to that individual, where the bucks stop.

Assigning specific accountability for D&I implementation:

Yet another article titled, ‘Diversity and Inclusion: A Pharma 50 Perspective’, published in PharmExec on June 23, 2016, asserted that there is little point in tackling diversity without solving for inclusion.

It underlined: ‘Whereas diversity is the hardware bringing different machines together, inclusion is the software that brings the system to life.’ The authors suggested, as many others would: ‘Hiring a chief diversity officer can help, accelerating the process at the highest levels.’

Conclusion:

The good news is, the above McKinsey research study also found: ‘Corporate leaders increasingly accept the business imperative for D&I, and most wonder how to make it work for their firms and support their growth and value creation goals.’ The article reiterated the correlation between D&I and company financial performance. Thus, to effectively leverage this factor, developing a robust corporate D&I strategy aimed at both – the employees and the society, at large, appears to be the right choice.

From this perspective, a diverse and inclusive pool of employees, with varied range of approaches and perspectives are expected to meet both business expectations and the health needs of the society with more innovative ideas. Consequently, this deserves to be an organizational growth strategy, having a sharp competitive edge. It is mainly because, the initiative will uncover newer and unconventional pathways for providing greater access to affordable medicines, to save and improve the quality of many more lives. As the process rolls-out, it will keep gathering critical momentum, with support from all around and, more importantly, the enormous goodwill that the D&I strategy will attract from public, in general.

By: Tapan J. Ray  

Disclaimer: The views/opinions expressed in this article are entirely my own, written in my individual and personal capacity. I do not represent any other person or organization for this opinion.

How Creative Is Pharma Industry?

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“Because the purpose of business is to create a customer, the business enterprise has two – and only two – basic functions: marketing and innovation. Marketing and innovation produce results; all the rest are costs. Marketing is the distinguishing, unique function of the business,” said the management guru of all times – Peter Drucker, decades ago. He further added, “The aim of marketing is to know and understand the customer, so well the product or service fits him and sells itself.” What needs to be underscored in this visionary articulation of Drucker is, effective marketing should create such a strong pull for a product or service that renders hard selling less relevant.

The word ‘innovation’ is used frequently within the pharma industry, and more by the multi-national players on a specific context. The purpose is mainly to douse stakeholder concern on high prices of innovative drugs – building a narrative around expensive, complex and time-intensive drug innovation process. That said, just as creativity is necessary to discover new drugs, creative minds also help in effectively reducing the cost of innovation – creating more customers for the company.

Curiously, in this debate the other key business function – ‘marketing’, often takes a back seat, with its usage getting generally restricted to product features and benefits, including ‘freebies’ of various kinds. Neither is there any palpable effort to make the culture of ‘creativity’ and ‘innovation’ prevail across the organization, for overcoming several critical growth barriers that keep looming over all functional areas.

Is it happening because of a hubris, as it were, within the pharma and biotech industry? This article will try to figure out why this has been happening over decades and would also ponder whether the time is ripe for changing the charted path of the business model. For a clear understanding of all, let me start with the difference between creativity and innovation from the business perspective.

Creativity – a fundamental requirement in a business, is different from innovation:  

This was examined in the article titled, ‘The Importance of Creativity in Business,’ published by Northeastern University, Boston, Massachusetts, on November 09, 2017. It emphasized, although “creativity” and “innovation” are often used interchangeably, these are two separate concepts. “Creativity is different because it is a mechanism to being innovative. You can have great ideas, but not be innovative,” the paper underscored. It brought to the fore that ‘creativity’ – being the fundamental ingredient for being ‘innovative’, is essential in the highly competitive business environment. It fuels big ideas, challenges the employees’ way of thinking, and opens the door to new business opportunities.

The IBM study also confirms this fact:

The study titled, ‘‘Capitalizing on Complexity: Insights from the Global Chief Executive Officer Study,’ led by the IBM Institute for Business Value and IBM Strategy & Change, also confirmed the above fact. The study is the fourth edition of IBM’s biennial Global CEO Study series, involving more than 1,500 Chief Executive Officers from 60 countries and 33 industries worldwide.

The study reported, CEOs selected creativity as the most important leadership attribute and the number one factor for future business success. It added: ‘Creative leaders invite disruptive innovation, encourage others to drop outdated approaches and take balanced risks. They are open-minded and inventive in expanding their management and communication styles, particularly to engage with a new generation of employees, partners and customers.’ Importantly, ‘creativity’ ranked higher than rigor, management discipline, integrity or even vision, as each of these will require creativity. According to the study, successfully navigating through an increasing complex world of ‘accelerated industry transformation, growing volumes of data, rapidly evolving customer preferences, can be overcome by instilling ‘creativity’ throughout an organization.

‘Necessity is the mother of invention’ – does it apply to pharma, as well?  

In today’s complex business environment, pharma’s business challenges are spreading rapidly across many areas. Besides innovation of new drugs, following are four broad, but critical areas, where fostering of creativity, innovative thinking and invention of game changing ideas, across the organization, I reckon, can fetch a sustainable return, in a win-win way:

  • Intense ‘pricing pressure’ to make innovative drugs affordable for greater access to patients: Just as innovative ideas are of fundamental importance to develop new drugs; disruptive innovative ideas in this area, can help resolve this issue, effectively – not any incremental measure.
  • Declining corporate image and eroding public trust: Placing patients’ interest at the center of the business model, and then effective marketing of the same, can reverse this trend, with better business outcomes.
  • Lack of business transparency: Make business processes, including pricing, sales and marketing more transparent, by leveraging the power of data with modern technology.
  • Declining per dollar marketing productivity: Move away from the old and traditional business models to find a new pathway for success, using the process of simulation, on an ongoing basis.

While above are some of the pressing needs for steering the course of pharma and biotech industry, the business keeps charting the same patch, with a bit of tweaking, here or there. Thus, the good old saying – ‘necessity is the mother of invention,’ still doesn’t work in pharma.  The question, therefore, is why? We shall discuss it in just a bit. Before that, let me explore how creative the pharma industry, joining some critical dots.

How creative is pharma and biotech industry?

To explore this area, I shall try to touch upon the following two points:

  • Is there any perceptible financial impact on pharma sales revenue, net profit and gross operating margin, for not creatively resolving some critical growth barriers, as stated above?
  • Where does pharma and biotech industry stand in global ‘creativity ranking’?

For this purpose, when I look at the following four major areas, some interesting findings emerge:

  • Top 10 in sales revenue.
  • Top 10 in net profit
  • Average Gross and Operating Margin
  • Creativity ranking of some major pharma and biotech companies

Top 10 in sales revenue:

The overall sales revenue of the pharma/biotech companies remains healthy. On the face of it, there doesn’t seem to be any storm signal.  According to Market Research Reports, Inc. the top 10 companies on 2018 sales revenue, are as follows:

  1. Pfizer Inc.: USD 53.647 Billion
  2. Novartis AG: USD 51.90 Billion
  3. Roche Holding AG: USD 45.5896 Billion
  4. Johnson & Johnson: USD 40.734 Billion
  5. Sanofi S.A: USD 39.288 Billion
  6. Merck & Co., Inc.: USD 37.689 Billion
  7. AbbVie Inc.: USD 32.753 Billion
  8. Amgen: USD 23.7 Billion
  9. GSK: USD 22.968 Billion
  10. Bristol-Myers Squibb: USD 22.600 Billion 

Top 10 in net profit:

There isn’t any storm signal visible in this area, either, as it is seen in isolation. According to Statista, the 2018 ranking of the top 10 biotech and pharmaceutical companies worldwide, based on net income, as appeared in the Financial Times 2018 equity screener database, is as follows:

Rank

Company

Net income ($ Billion)

1.

Johnson & Johnson (USA)

15

2.

Novartis (Switzerland)

13.8

3.

Pfizer (USA)

11.9

4.

Roche (Switzerland)

10.5

5.

Amgen (USA)

8.5

6.

Gilead (USA)

7.7

7.

AbbVie USA)

6.8

8.

Novo Nordisk (Denmark)

6.0

9.

Bayer (Germany)

4.3

10.

Biogen (USA)

4.1

Let’s now look at the average gross and operating margin in the pharma and biotech industry.

Average Gross and operating Margin – still the best:  

This also looks healthy, as compared to others. According to the January 2018 study by New York University’s Stern School of Business, average gross margin of 481 biotech and 237 pharma and biotech companies was reported at 70.71 percent and 68.60 percent, respectively. And their operating margins were at 25.45 percent and 24.89 percent, severally – against 12.32 percent of all the 7209 companies surveyed.

Creativity ranking of some commonly known pharma and biotech companies:

Here there seems to be an issue. When I look at the 2018 Forbes list of ‘The World’s Most Innovative Companies,’ it will be challenging to find any of the above top names of the pharma and biotech companies within the Top 100 ranking. Just to illustrate the point, let me reproduce below some commonly known names of our industry:

Rank Company Country 12-month sales growth% Innovation Premium%
#7. Incyte USA 38.93 70.59
#14. Celltrion S. Korea 45.25 62.3
#16. Regeneron Pharmaceuticals USA 20.82 61.11
#17. Vertex Pharmaceuticals USA 46.2 60.93
#22. Alexion Pharmaceuticals USA 17.32 58.04
#82. Allergan Ireland 9.4 37.59

Some interesting possibilities:

The above data, points towards some interesting possibilities:

  • Because of its sales and profit margin remaining generally lucrative, the focus on innovation of most pharma and biotech companies, get restricted to new drug discovery and development processes.
  • Top management’s encouragement of creativity across all functions of the organization appears inadequate, to successfully navigate through the key growth barriers, to maintain future business sustainability.

But, some critical signals do indicate: ‘shape up or ship out’:

But the real picture isn’t as rosy. Analysis of some key trends does capture several critical storm signals for the industry According to the July 09, 2018 study of EY (Ernst and Young): ‘Margins of pharmaceutical companies are continuing to decline – the future lies in new ecosystems.’ It further indicated: Although the margins of the 21 largest pharmaceutical companies in the world are declining, the businesses ‘are still growing, thanks to blockbuster drugs and new active ingredients against cancer. 40 per cent of the active ingredients that are currently being developed worldwide are cancer drugs.’

The paper concluded, the future lies in designing completely new types of ecosystems and business models. With the aim of providing comprehensive support for healthcare customers, including patients. “Data-driven business models will permanently change the pharmaceutical industry,” the paper articulated. The study forecasted, ‘life Science startups will take over between 30 and 45 per cent of the market by 2030.’ Isn’t this a clear signal, especially for large and longtime pharma players to ‘shape up or ship out?’

Conclusion: 

Let me now revert to what Peter Drucker said on two basic functions of a business – Innovation and Marking. None can question pharma on its consistently bringing to market innovative drugs to effectively tackle many diseases, including complex and life-threatening ones. Given, that ongoing new drug development is the lifeblood of growth of pharma business. Nevertheless, that aspect of innovation is mostly perceived as an exclusive internal business value for most companies. The majority of stakeholders perceives the value of drug innovation as inclusive, when it is made accessible to a large population of patients at an affordable price, along with a decent Return on Investment (ROI) for the corporation. This expectation cannot be wished away. Instead, its core concept should drive the other basic function of business – marketing

This stage can be attained by building an innovative organization, fostering the culture and process of ‘creativity’ – across its functions. It is now a fundamental requirement for pharma and biotech companies. Beyond new product development, innovation immensely helps organizations navigating through strong headwinds to achieve its financial goals and objectives, in an inclusive manner. When IT – another knowledge industry, can reduce the cost of innovation through creative processes, across all functions, making its product and services affordable to a large population, e.g. Reliance Jio, why not Pharma? In that sense, I reckon, pharma and biotech companies are yet to become creative – in a holistic way.

By: Tapan J. Ray     

Disclaimer: The views/opinions expressed in this article are entirely my own, written in my individual and personal capacity. I do not represent any other person or organization for this opinion.

A New Pharma Marketing Combo Places Patients At The Center Of Business

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As discussed in several of my previous articles, most pharma players need to walk the talk on ‘patient-centricity’, coming out of prevailing high decibel lip-service. This is not an easy task, and far from being every company’s cup of tea.

Effective implementation of patient-centricity by an organization, entails understanding of behavioral science by today’s pharma marketers. Many of them, I am sure, have already studied it in Business Schools. Be that as it may, by harnessing this scientific knowledge, the insights that they will acquire on primary and secondary pharma customers, will be unique. The important cues that will come out of the insights, will help them create well- targeted strategic marketing game plans having a cutting-edge. When implemented on an ongoing basis, this will help catalyze a win-win business environment, for reaping a rich harvest over a long period of time.

In today’s article, I shall dwell on the increasing relevance of an interesting combo of behavioral science – predictive analytics and patient-centricity, for a sustainable business performance. This is especially for the millennial pharma marketers to try and implement. With blessings from the top management, this model will help them jettison – the increasingly counterproductive – ‘gratification model’ of pharma business, imbibing ‘patient-centric ones’ – that patients themselves can feel and will appreciate.

The basic requirements to make it happen:

The basic requirements of the pharma companies to make it happen is to gradually move away from its core strategy of ‘buying prescriptions’ that often happens through contentious means. No doubt, it has the power to create a temporary strong brand push. But is definitely not sustainable, as these usually go against patients’ health and economic interest.

For a sustainable demand for a pharma brand, pharma companies would need to design a strong ‘brand pull’ in the new paradigm. This would prompt drug companies acquiring deep insights on how to leave a cherishing treatment experience with the patients for the brand. This would, consequently, have a strong-positive rub-off effect on the corporate image, as well. Likewise, a doctor would also like to know, how to create similar patient-experience with his treatment, to draw more of them in the future. This is diametrically opposite to generation of demand for a brand through ‘payment to doctors for prescriptions.’

Pharma marketer’s understanding of behavioral science is necessary:

This is because, it helps to get targeted deep-stick studies done on the way pharma customers, such as doctors and patients, behave. The span of the behavioral study should commence from the onset of a patient’s search for a disease treatment process, right up to when the individual gets an ‘after treatment experience’ – good, bad or average. It is, therefore, necessary for a drug company, to become more patient-centric, rather than self-serving, for achieving the desired goals of pharma business, consistently.

This wisdom would enable pharma marketers developing the following five broad insights for being ‘patient-centric’:

  • Understanding the process of thinking of a type or a group of patients about making their treatment choices. It could often mean not going for any treatment at all, or not adhering to prescribed treatment.
  • What makes patients behave the way they do, while undergoing a treatment?
  • Understanding both mental and physical feelings of patients while suffering from certain disease conditions, for effective engagement with them.
  • What type of holistic treatment experience the patients would value most to cherish.
  • What type of treatment experience the doctors would value most to provide to patients to enhance their practice and professional reputation.

While doing so, pharma marketers would need to clearly harmonize the two areas – one pertaining to doctors, and the other involving patients. This is important for the purpose of a clear focus on a comprehensive brand strategy formulation, based on well-analyzed data.

The key point to note, however – a creative blend of behavioral science with new-age pharma marketing tools can bring a sea change in the business performance of a company, along with providing a delightful treatment experience to patients with its drugs.

Generation of a huge pool of customer behavioral data is the starting point:

The first step of making a patient-centric organization is the generation of a huge pool of data on customer-behavior dynamics. That said, making predictions on the company’s customer behavior for future outcomes of the brand performance, from this data pool, would involve the use data analytics, which for this purpose will be ‘predictive data analytics.’

The use of ‘predictive analytics’ in pharma marketing:

In my article titled, ‘Data: The New Magic Wand For Pharma Business Excellence’, published in this Blog on October 01, 2018, I discussed the importance of well targeted data-based decision-making process, across the pharma functional areas. Taking this idea forward, let me explain here the critical role that ‘predictive data analytics’ can play in acquiring insights of the trend of behavior of the customers, especially patients and doctors.

Simply put, ‘predictive analytics’ is a type of advanced analytics, which are used to get deep insights and making well-informed predictions, based on both past and current data feeds. In pharma, especially for the subject that I am discussing, it pertains to insights on doctor and patient behavior related predictions, encompassing the entire span of a disease treatment process. Skillfully executed, this will strengthen, at least, two critical success factors in the pharma business:

  • Acquiring predictable insights on the targeted customers’ behavioral trend and pattern any given time-frame.
  • With such customer insights making the organization ‘patient-centric’ for more effective engagement with its customers.

Combining the above two points, I can well say, by analyzing a huge pool of data from behavioral-science-based information – ‘predictive analytics’ helps acquire deep insights on predictable customer behavior, with high precision. These are so useful, not just for better engagement with doctors, patients and other stakeholders, but also in making the organization patient-centric, in true sense. Nevertheless, many still question - Is ‘patients centricity’ really feasible in the pharma industry?

Is ‘patient centricity’ really feasible in the pharma industry?

This question was also raised in the 2017 paper titled, “Patient Centricity and Pharmaceutical Companies: Is It Feasible?” -  published in Vol. 51(4) of the Therapeutic Innovation & Regulatory Science (TIRS). The paper captures patient-centricity as integrated measures for listening to and partnering with patients, and placing patients’ well-being at the core of all business initiatives. It represents a holistic approach to the disease management process.

The concept brand-oriented patient-centricity is not too difficult to understand. But, I reckon, the difficulty lies somewhere else. It is to fathom where and how a pharma player can predictably add differentiating value, for those patients who need a right kind of treatment. That’s why, the question of feasibility of ‘patient-centricity’ is being raised.

There is no doubt that such an effort presupposes considerable insights on patients’ behavior, alongside the requisite expertise to predict these, for different time-frames, with a great degree of precision. This not an insurmountable task, either, particularly in today’s paradigm – with state-of-the-art ‘predictive data analytic’ tools. This prompts me to believe, it is very much possible to make a truly patient centric organization, assuming that there will exist a strong will to survive in the business and prosper!

Are ‘predictive data analytics’ different from other analytics?

Yes, the following two key points make ‘predictive data analytics’ quite different from other data analytics:

  • General data analytics usually help acquire insights on the past and present.
  • Whereas, predictive data analytics help looking at near-mid and long-term future, regarding most probable customer behavior pattern and trend, with great accuracy.

Currently, with the ability to generate relevant and real-time big data pool, together with application of machine learning, data-mining and statistical modelling – predictive analytics have the power to help acquire future insights. This insight is totally data-based, sans any gut-feel. Thus, effective use of this process can enable pharma players effectively predict trends and behaviors of doctors and patients for meaningful engagement with them for their chosen brands.

Has potential to create a win-win outcome: 

To ensure a game-changing payback from this process, crafty dovetailing of the following three steps, complementing each other is critical:

  • Generate a huge pool of real-time data on doctors’ and patients’ behavior pattern, for a pre-selected time-frame.
  • With the knowledge of behavioral science, help analyze them with predictive analytics.
  • Understand from the results, the trend of behavioral dynamics of selected customers from the brand perspective.
  • Frame rewarding business strategies to create a win-win situation, involving both – the pharma players and the patients.

Some pharma players are on the ball:

One of the key reasons for imbibing patient-centricity, is the proliferation of ‘me-too’ types of brands – both patented and generics. It has started happening even in the market of high-priced oncology medicines, with not much difference in price between them.

In this situation, predictive data analytic tools can help understand multi-variable relationship between patient’s needs, their interaction with physicians, the oncologist’s prescriptions to them, type of physician-engagement of drug companies and patients’ experience before, during and after the treatment. This is not an easy task, nor all pharma companies have wherewithal of doing this, to gain brand market share, significantly.

With predictive data analytics, many pharma companies are keeping eyes on the ball, using it in different business areas, such as drug discovery. But not many of them, are using this combo-approach to make a patient-centric pharma organization. It is just a matter of time, I reckon, that global pharma will decide to move in this direction – fortified with deep pockets, but with a battered reputation, and facing a hostile pricing environment, across the world.    

Conclusion:

Customer insights, acquired through the crafty application of behavioral science, have immense potential to make sales and marketing decisions more informed, than what it is today. In tandem, it will help create a ‘worth remembering’ treatment experience for the patients with the brand used.

From this perspective, I reckon, skillful application of behavioral science to generate a huge pool of data, and their analysis with ‘predictive analytics’ will go a long way to create a truly ‘patient-centric’ organization.

When executed by a well-integrated expert team of market research, medical affairs and pharma marketing professionals, this new marketing-combo-approach has the potential to fetch a game-changing performance outcome, placing patients at the center of business. The net gain to the organization will be much more than the sum total of what each of these steps can ensue individually – remarkably enhancing corporate reputation, in tandem.

By: Tapan J. Ray     

Disclaimer: The views/opinions expressed in this article are entirely my own, written in my individual and personal capacity. I do not represent any other person or organization for this opinion.

‘Design Thinking’: Translating Struggles into Positive Outcomes in Pharma

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Problems of various nature will keep coming on business, as long as long as one remains in the business. It doesn’t spare anyone in the organization – from the very top to right up to the very bottom. All is susceptible to problems. Thus, underlying part of all jobs, is one’s ability to solve problems – decisively, as these keep coming.

At the corporate level, problems could be either self-created. For example, when each functional area operates in a silo, at times restricting overall corporate business growth. This may happen not only due to lack of operational synergy, but also for setting incompatible goals. Problems may even arise out of environmental hindrances, or for smarter competitive strategies. Both would adversely impact the company performance, including the possibility of damage to reputation, and at times, even survival of the business. At the individual level, problems at the work place, may affect one’s personal life, work life, career path, key performance areas or even income, among many others.

Looking at the positive aspect of it, as the saying goes, each problem comes as a hidden opportunity, which needs to be harvested. Importantly, in a work environment, the degree of career success of an individual is often associated with the person’s problem-solving ability – in innovative ways. Conversely, one pays a commensurate price for not being able to do so.

In any case, ‘problem solving’ skill is important for all, as much as it is in any business, irrespective of whether the environment around is digital or one involving with lesser of computer technology. This skill is highly necessary for business success. Therefore, the essence of garnering differential competitive edges in any business remains deeply embedded in the quality of problem-solving ability of its people, across various organization functions.

In a broader sense, any innovation – including drug innovation that falls at the high end of the pharmaceutical value chain, is also basically a problem-solving initiative. This encompasses even some of the serendipitous discoveries, such as Viagra for erectile dysfunction. In this article, I shall try to explore the wider applications of a robust process in problem solving – the application of ‘Design Thinking’ in pharma industry.

‘Design Thinking’:

The roots of ‘Design Thinking’ hail back to the mid-1950s with the introduction of the subject, Design Science, at the Massachusetts Institute of Technology (MIT), says US Collective in a paper titled, “What is Design Thinking and how can businesses benefit from it?”

According to MIT Sloan School of Management: “Design thinking is an innovative problem-solving process rooted in a set of skills.”This process has been successfully applied to developing new products and services. It begins with understanding the unmet needs of customers. And from that insight emerges a process for innovation, encompassing concept development, applied creativity, prototyping, and experimentation. With the application of ‘design thinking’ in business, the success rate for any innovation has been seen to improve substantially.

In its analysis, MIT Sloan found that design-driven companies such as Apple, Coca-Cola, IBM, Nike, Procter & Gamble, and Whirlpool have outperformed the S&P 500 over the past 10 years by an accumulated 211 percent in what’s called the Design Value Index—a portfolio of 16 publicly traded companies that integrate design thinking into corporate strategy. According to a 2016 report from the Design Management Institute, this marks the third consecutive year the index has shown an excess of 200% over the S&P 500.

‘Design Thinking’ in pharma:

As we have seen, ‘design thinking’ approach is a human-centric way of problem-solving, understanding the user needs. In the pharma space, it’s problem solving to address its stakeholders’, including patients’ needs and requirements related to health. Thus, for innovative drug marketing, as well, ‘design thinking’ could play a very useful role to make all organizational activities patient-centric – for greater all-round corporate success.

In this context, an article on ‘design thinking’, appeared in the Financial Times on October 12, 2017 reported: “Development of a drug can take around 15 years. But by using the design-thinking process, you could make clinical trials shorter by collecting more real-time data. The manufacturing process and design of packaging could be improved by a better understanding of how drugs are being used. And costs could be reduced, enabling the more expensive drugs to be made more available.”

Four steps of ‘Design Thinking’:

MIT Sloan outlined 4 simple steps in ‘design thinking’ process, which I am summarizing in pharma perspective, as follows:

1.Understand the problem – the source could be both internal or external:

As MIT Sloan professor Steve Eppinger said: “Most people don’t make much of an effort to explore the problem space before exploring the solution space.”

This often happens in pharma too. It’s not very uncommon that looking at just manifestations of problems, a company will look for a solution – quite akin to providing symptomatic relief in the treatment of a disease.

Eppinger further articulated, the mistake that problem solvers usually make ‘is to try and empathize, connecting the stated problem only to their own experiences.’ This falsely leads to the belief that problem solvers completely understand the situation. But the actual problem is always much broader, more nuanced, or quite different from what people originally assume, he underscored.

2. Workout possible solutions – involving those who matter 

3. Prototype these, test and further refine

4. Implement the best possible solution

Professor Eppinger further said, people at work can use ‘design thinking’ not only to design a new product or service, but anytime they’ve got a challenge – a problem to solve. Applying ‘design thinking’ techniques to business problems, pharma companies can offer greater value to customers, and stay relevant.

Pharma companies imbibing ‘design thinking’:

There are examples that some pharma companies are seriously nurturing the concept of ‘design thinking.’ One such an instance was captured in an interview, published in pharmaphorum on May 3, 2018. During this interaction, the head of innovationof the global pharma major – UCB,articulated how his company is creating a culture based around ‘design thinking’, right across the organization.

Acknowledging that pharma is generally accused of being distant from patients that it intends to serve, he explained how UCB is aiming to address this issue byfostering a new patient-centric organizational culture through ‘Design thinking.’

Detailed analysis of the needs of the target audience following this process, and the use of insights thus gained, will also encourage researchers to create appropriate new products. The core idea is to create products that are led by the needs of customers – something that is so critical for pharma companies, particularly in increasingly competitive commercial landscape.  He advised people to be persistent and professional, as they measure and see the results, which has potential to create a snowball effect in the organization.

Conclusion:

Several studies indicate that the companies with a long track record of delivering stakeholder value, are more customer focused. Apparently, pharma players are progressively experiencing that for sustainable business excellence, their customers – including patients, should form the nucleus of corporate business strategy. The same concept should, thereafter, cascade down while developing the game plan for each functional area. There doesn’t seem to be any other viable alternative for the same, right now.

With upswing volatility in the business environment, ‘design thinking’ merits to become a relentless process, particularly for creating assertive employee-mindset to accept the challenge of perpetual change, anytime. Accordingly, a well-structured and equally well-integrated, ongoing feedback data generation mechanism, together with sophisticated analytical tools, supported by other requisite resources, should be put in place.

Ample evidences demonstrate that ‘design thinking’ helps business to stay always in sync with the market, customers and also its employees, for performance excellence. It can provide creative inputs for developing game changing business strategies, meeting customers’ new expectations, or even to reformulate those, which are yielding declining or sub-par outputs. Consequently, it becomes incumbent upon top decision makers to integrate this process into the pharma organizational culture.

Thus, I believe, ‘design thinking’ is an effective way of creative problem solving in a number of situations, having its source both within and outside the organization. It carries a promise of improved all-round corporate achievement – often translatiaing struggles into positive outcomes in the pharma business.

By: Tapan J. Ray   

Disclaimer: The views/opinions expressed in this article are entirely my own, written in my individual and personal capacity. I do not represent any other person or organization for this opinion.