Why Do Drug Companies Now Need More Focus On The 5th “P” Of Marketing?

Posted on March 7, 2022 by Tapan Ray

Astute marketers understand that over several decades, the much-known phraseology – ‘marketing mix’, has remained the bedrock of marketing a product or a service. The ‘Father of Modern Marketing’ - Philip Kotler defined this terminology as the “the set of controllable variables that the firm can use to influence the buyer’s response.” In this context, the controllable variables are referred to as the 4 ‘P’s - Product, Price, Place and Promotion, which remained the basic focus areas in the brand building strategy of pharma marketers, as well.

With an unprecedented transformative impact within the pharmaceutical and biotech industry during the Covid-19 pandemic – for various reasons, ‘purpose’ is fast slotting itself as the 5th fundamental ‘P’ of the marketing-mix. The changing market - triggered by changing customer dynamics, entails the need to clearly define, to the satisfaction of customers, the”purpose” of a business, brand, or service.

As it is increasingly critical to achieve business excellence in the changing paradigm, in this article I will focus on this area from the point of view of goal-oriented pharmaceutical marketing. Although, I wrote before on the need of creating purpose driven brands, this discourse is with a different perspective.

A classic concept gets a fresh impetus in Covid pandemic:

Peter Drucker, whom the Business Week magazine termed as ‘The Man Who Invented Management,’ in 2005, once wrote: “The aim of marketing is to know and understand the customer, so well the product or service fits him and sells itself… The aim of marketing is to make selling superfluous.” I reckon, this vision epitomizes the core concept of ‘purpose driven marketing.’

Understanding ‘purpose driven marketing’:

In an article, published on February 01, 2021, Ad Council wrote that after 22 years – a recent CEO roundtable deliberation decided to amend the definition of ‘purpose-driven marketing.’ The previous one was centered around ‘maximizing shareholder return.’ Whereas the amended one, in addition to serving shareholders, defined ‘purpose-driven marketing’ as ‘a strategy used by an organization to center its external communication efforts around a social cause that aligns with its core values. The goal of purpose-driven marketing is for an organization to develop a deeper rapport with their consumers by creating authentic connections based on shared values.’

This new statement reflected the changing culture in the days before the Covid-19 pandemic, when many people are more vocal about their expectations and spending. For which, they are even switching brand or service preferences in line with their values.

Covid prompts consumers rediscovering the value the industry delivers:

Covid -19 crisis has driven the positive consumer sentiment way up, as people are rediscovering the value the industry delivers to meet their new reckoning. This was also articulated in a related article. This was published in the Fierce Pharma, on August 13, 2020, as the pandemic overwhelmed the world. The same consumer sentiment also gets reflected in a first of its kind global study - ‘The 2020 Zeno Strength of Purpose Study,’ published on June 17, 2020.

The survey was carried out against the backdrop of the Covid-19 pandemic, covering 8,000 consumers across eight countries - United States, Canada, United Kingdom, France, China, India, Singapore, Malaysia. The findings of the research ‘sheds new light and unequivocal proof that the companies leading with Purpose will prevail.’ Vast majority of the respondents ‘have spoken and stand ready to give their hearts, voices and wallets in support of Purposeful brands.’

Especially, the healthcare consumers are now stepping up to stand for something more than hard facts on the features and benefits of products and services – something very meaningful that can influence positive changes in their minds. When it happens, the companies’, in tandem, will also be positively impacted to significantly improve their bottom-lines.

Some key findings of the study:

After in-depth study over 75 brands, the researchers of the above study found that:

94 percent of the respondents value the companies with a strong sense of purpose and are willing to reciprocate through brand loyalty.

They are 4 to 6 times more likely to trust, buy, champion, and protect companies with a strong purpose over weaker ones.

Only 37 percent believe today’s companies are reaching their potential on this front

The paper concluded, ‘it has never been more important for companies to not only articulate their Purpose, but to consistently demonstrate that Purpose – how they operate, support issues and engage with all stakeholders.’ As the above Ad Council article articulated, the above findings also ‘mean that purpose-driven marketing can’t be cosmetic. It must be reflected in every aspect of a brand’s business model and culture, or that brand or organization can expect to be called out for hypocrisy – more on that later.’

Who’s driving the ‘purpose driven marketing?’

As I wrote in my previous article, today’s new generations, such as, Millennials - regarded as ‘digital pioneers,’ and Gen Z – the true digital natives, approach their health care in drastically different ways with new sets of expectations. These are quite different from the members of the Silent Generation, Baby Boomers, or Gen X. As the core concept of ‘purpose driven marketing’ is meeting Gen Z’s one such expectation, this population is regarded as the key driver of ‘purpose driven marketing’, in the pandemic-driven changes in the paradigm of the old normal.

I quoted in the above article, ‘Gen Z people are likely to turn the health industry on its head with their unique expectations for how healthcare should be delivered.’ Moreover, this genre of growing population is slowly but steadily gaining a critical mass to hasten the process of change that pharma marketers should take note of.

According to a paper of the World Economic Forum, published on November 08, 2021, there are 1.8 billion Gen Z around the world, equal to 23% of the global population. Yet, another paper of August 11, 2020, reconfirms that Gen Z comprises 1.8 billion people, making up for almost a quarter of the global population. India stands out with a population that includes 375 million Gen Z people – 27% of the total. Thus, Gen Z and millennial populations are considered at the forefront of shaping this new purpose-driven culture.

The Gen Z populations prefer companies contributing to social causes:

The third annual, international study of Gen Z, conducted by The Center for Generational Kinetics and commissioned by WP Engine, launched on July 07, 2020, reveals some interesting facts. These relate to new expectations for the web by Generation Z in comparison to other generations, including Millennials, Gen X, and Baby Boomers. The findings reiterate, ‘72% of Gen Z are more likely to support a company that contributes to social causes.’ It further emphasized, Gen Z is acutely aware that in today’s digital world, anyone can use their voice to ignite change, and that includes those brands which don’t take explicitly socially responsible stand in their branding strategy. Thus, imbibing ‘purpose driven marketing’ is likely to help pharma players to effectively engage this new breed of the target audience for desired long-term financial returns.

Further, based on the same logic, it is not difficult to fathom that ‘stakeholder-trust’ will also play a pivotal role, while delivering consumer expected value, and demonstrating the purpose driven actions of the business – to the Millennial and Gen Z population.

Stakeholder ‘Trust’ is critical in a value and purpose driven business:

This is a new reality, as vindicated by several recent global surveys that include India too. According to Edelman Trust Barometer 2022, ‘business holds on to its position as the most trusted institution, with even greater expectations due to government’s failure to lead during the pandemic.’ This survey – conducted against the backdrop of the pandemic, involved 36,000+ respondents in 28 global markets, including India to look at how institutions are trusted against the backdrop of the pandemic.

Some key findings of this latest study:

All stakeholders want business to fill the void, with nearly 60 percent of consumers buying brands based on their values and beliefs,

Almost 6 in 10 employees choose a workplace based on shared values and expect their CEO to take a stand on societal issues,

64 percent of investors looking to back businesses aligned with their values.

Most respondents (59 percent) said they tend to distrust until seeing evidence that something is trustworthy,

64 percent believe people in their country lack the ability to have constructive and civil debates.

Technology (74 percent) was the most trusted sector, followed by education (69 percent) and healthcare (69 percent). Social media (44 percent) continued its decline with a 2-point slide, solidifying its spot as the least trusted sector.

While Germany (65 percent) and Canada (65 percent) remained the most trusted country brands, India (36 percent) and China (34 percent) remain the least trusted.

The evolving trend indicates that the new generation, ‘wants to be a part of something bigger than themselves and they are looking to their employers to curate a fulfilling, stimulating and purpose-driven environment,’ as the article underscored. In that sense, ‘purpose-driven marketing’ has also the potential for pharma players to attract the best talents of the new generation. Conversely, it is quite likely that any organizations inability to do so, willingly, or otherwise, could help gather rust, blunting its cutting-edge for performance excellence.

Conclusion:

There isn’t any doubt that Covid-19 pandemic has initiated a paradigm shift in the expectations of the stakeholders, especially the customers and the employees from the companies. They no longer expect the organization just to focus on profit goals. Alongside, most of them also want the employers to focus, in equal measure, stakeholder value, expectation, dignity, besides social purpose and goals.

When a pharma player is seen solving societal issues, e.g., protecting the patient-health in a patient friendly manner, or saving the environment - with concrete, quantifiable measures, it creates a competitive edge for the company, fetching significant business returns from stakeholders. Surly, the pandemic is further augmenting expectations of the growing population of Gen Z – for responsible business operations = driven by value, purpose, and goals of the society – where we live in.

Consequently, it’s now becoming clearer that sustainable business excellence of pharma players can no longer be just on ‘maximizing shareholder’ returns, in terms of profit. Thus, it calls for the purpose-driven marketing, where organizational contribution to society would provide a significant competitive advantage. From this perspective, in my view, the Indian pharma marketers would now need much greater focus on the 5^th ‘P’ of the marketing-mix – 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.

How Creative Is Pharma Industry?

Posted on April 15, 2019 by Tapan Ray

“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:

Pfizer Inc.: USD 53.647 Billion
Novartis AG: USD 51.90 Billion
Roche Holding AG: USD 45.5896 Billion
Johnson & Johnson: USD 40.734 Billion
Sanofi S.A: USD 39.288 Billion
Merck & Co., Inc.: USD 37.689 Billion
AbbVie Inc.: USD 32.753 Billion
Amgen: USD 23.7 Billion
GSK: USD 22.968 Billion
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.

Patients’ Trust And Pharma Remain Strange Bedfellows?

Posted on September 3, 2018 by Tapan Ray

Like many other industries, pharmaceutical companies too often talk about improving focus on effective ‘stakeholder-relationship management’. The doctors obviously form an integral part of this process. There is nothing wrong with it. Nevertheless, serious concern of ‘conflict of interest’ between the two entities is being raised on the means adopted to achieve the targeted end results.

Much as the drug makers expect that these methods are easily justifiable and would not bother anyone, it usually doesn’t happen that way, especially among the informed patients. When patient-interest gets compromised in this complex transactional web, the residual impact is awfully negative. Over a period of time, such episodes lead to a patient-doctor trust-gap, having a snowballing effect on the integral constituent of this saga – the pharma industry.

In this article, I shall briefly explore the scale and depth of such trust-gap and try to fathom who can effectively address this cancerous spread. This initiative when implemented well, won’t just protect patients’ health interest, ensuring affordable health care of good quality for all. It will also help rejuvenate pharma players’ declining reputation, facilitating long-term business interest –unchained by too many stifling regulations.

For being in the paradise of health care…

‘Trust’ is the bedrock of any meaningful relationship and is usually built based on one’s experience, perception and feelings, besides a few other factors. It falls apart in the presence of deception or lies, even if these are well camouflaged. Similarly, clandestine acts when unearthed could also lead to the same outcome. The charted pathways for development or collapse of patients’ trust regarding doctors, or government policy makers trust towards pharma players are fundamentally no different.

In a scenario where patients can trust doctors for suggesting the best affordable treatment of good quality, including safe and effective drugs; hospitals and caregivers are just and conscientious; insurance companies are caring and fair in their dealings; drug prices are rational; published clinical trial reports on drug efficacy and safety are unbiased, the communication from pharma companies are trustworthy without any hidden agenda – we are living in the paradise of health care.

Nonetheless, the same paradise built on patients’ valuable trust would get shattered, as the drug regulators and the media get to know and unearth lies and clandestine dealings between doctors and pharma companies. Patients soon realize, though the hard way that they are being short-changed. A trust-gap is created, giving rise to an avoidable vicious cycle in the healthcare space. It is difficult to break, as one witness today, but not impossible, either.

The trust-gap is all pervasive:

Although, we are discussing here the trust-gap between doctors and drug companies on the one hand, and patients, drug policy makers and the regulators on the other – the trust-gap is all pervasive. This is vindicated by a startling headline of the January 16, 2018 edition of a leading Indian business daily. It says: “Over 92% people don’t trust the health care system in India: Study”.

It quotes the GOQii India Fit 2018 report saying a large part of which includes doctors, hospitals, pharma, insurance companies and diagnostic labs. The following table shows the ranking of some these constituents in terms of trust gap of Indians.

Rank	Healthcare system	People don’t trust (%)
1.	Hospitals	74
2.	Pharma companies	62.8
3.	Insurance companies	62.8
4.	Medical clinics	52.6
5.	Doctors	50.6
6.	Diagnostic Labs	46.1

The survey emphasizes that a series of failure, particularly the negligence of hospitals in the recent past has made it hard to trust in the system. The lack of transparency was the other reason that stands out.

Not a recent phenomenon, but increasing:

A trust-deficit in the healthcare system isn’t a recent phenomenon. This was corroborated in the article, titled ‘Doctors, patients, and the drug industry: Partners, friends, or foes?’ It was published almost a decade ago – in the February 07, 2009 edition (Volume 338) of the British Medical Journal (BMJ). The authors quoted a contemporary report issued by the ‘Royal College of Physicians’, which captured an all-time low relationship between the drug industry, academia, healthcare professionals, and patients, even at that time. The paper suggested that it is in the interests of all parties to bridge the trust-gap, without further delay.

As mentioned before, this particular discussion will focus on just two areas – pharma companies and the doctors – not all constituents of the health care system. This is primarily to have a congruity with my previous discussion on the importance of ‘perception’ in pharma. From that perspective, it is evident from the BMJ paper that a trust-gap exists not just in the doctor-patient relationship, but also between the drug policy makers and the pharma industry. I shall try to drive home this point with the following two examples.

A. The trust-gap in doctor-patient relationships for ‘Conflict of Interests’:

The article titled, “Conflict of Interest in Medicine” featuring in the JAMA Network on May 02, 2017 described ‘Conflict of Interest’ as ‘a situation in which a person is or appears to be at risk of acting in a biased way because of personal interests.’

The article further elaborated thatdoctors’ relationships with drug companies (including any payments or gifts received from the companies) might affect how they report the results of research studies, what they teach medical students about particular drugs, or what treatments they recommend for patients. Moreover, doctors may preferentially refer patients to those diagnostic facilities for tests that may financially benefit them for doing so.

B. The trust gap between the government policy makers and the pharma industry:

That such trust-deficit is all pervasive, gets reverberated even through the speeches of no less than the Prime Minister of India.

On April 18, 2018, during an interactive session of theBharat Ki Baat, Sabka Saath‘ diaspora event at the Central Hall in Westminster, UK, Prime Minister Modi,reportedly said that doctors visit Singapore and Dubai to attend conferences, and not because someone is sick. “The pharma companies invite them for that. To finally break the resultant sale of expensive medicines, the government has launched generic stores where medicines of similar quality are sold at cheaper prices” – the PM further added during his interaction with the audience present in this function at London.

As expected, the medical community in India expressed displeasure over the remark of the PM on doctors and pharma companies on a foreign soil, the same media report highlighted.

Interestingly, just a year ago, on April 17, 2017, while inaugurating a hospital in Surat, a home to several top Indian generic drug makers Prime Minister Modi had said: “We are going to make legal arrangements to ensure that when doctors write prescriptions they write that generic medicines are sufficient and that there is no need for any other medicine.”

Some ineffective interventions:

As I said before, this downward spiral with a widening trust-gap in the healthcare space of the country needs to be arrested soon, with effective steps. The best remedial measure in such cases will obviously be self-regulation by all concerned, keeping patients’ interest at the center.

As an antidote to this problem, in the previous Government regime, ‘Uniform Code of Pharmaceutical Marketing Practices (UCPMP)’ was put in place, but only for voluntary implementation by the drug companies.

Enough time has elapsed in experimenting with this process, since then. Regrettably, like many other countries, self-regulation in this area to address the malady of trust deficit hasn’t worked in India too. Both the ‘Professional Conduct and Ethics’ of Medical Council of India (MCI) for doctors, and the UCPMP of the Department of Pharmaceuticals (DoP) for drug companies intended to address the so-called doctor-pharma industry unholy nexus, have not yielded expected results. The saga continues, unabated.

Conclusion:

From the patient-interest perspective, what is happening today in the global healthcare space is indeed baffling. Improving access to good quality, affordable drugs for all, has become a challenge in many countries, just as in India. Consequently, alleged unholy doctor-industry nexus that contributes a significant part to this problem, is attracting greater public attention today. The issue is being often raised even at the highest echelon of the incumbent government. But, more puzzling is, even after the PM’s public anguish, the DoP doesn’t seem to have walked the talk. Much hyped – the proposed mandatory UCPMP has not yet seen the light of the day, despite a clear indication of the same.

The question then arises, what happens if it does not happen due to political or any other compulsions? In that case, I reckon, the primary initiative to bridge the existing trust-gap, should rest on pharma companies. They may not always agree with all public allegations leveled against them, as the creator of this ungodly collaboration, and rightly so. Nonetheless, remaining in a perpetual denial mode in this regard, won’t help the pharma industry, anymore. More so, when the number of net-savvy, reasonably well-informed and globally connected patient groups, are fast increasing. Besides being fair in all business transactions, drug players need to sincerely engage with patients, not in usual condescending ways, but with due respect, for mutual benefits.

Otherwise, despite pharma industry and patients being interdependent in so many ways, sans a strict regulatory framework with legal teeth, ‘patients’ trust’ and ‘pharma’ will continue to remain uneasy, if not strange bedfellows.

By: Tapan J. Ray

Creating ‘Shared Value’ in Pharma – The Way Forward

Posted on July 30, 2018 by Tapan Ray

Many Pharmaceutical companies, both global and local, are struggling with a plethora of critical challenges. With the industry reputation diving south successful navigation through this headwind has become an onerous task, more than ever before.

Under this backdrop, the article, titled “Creating Shared Value” of Michael Porter and Mark Kramer, published in the Harvard Business Review (HBR) in its January – February 2011 issue, becomes very relevant to analyze the situation.

The paper says: “Companies are widely thought to be prospering at the expense of their communities. Trust in business has fallen to new lows, leading government officials to set policies that undermine competitiveness and sap economic growth. Business is caught in a vicious circle. A big part of the problem lies with companies themselves, which remain trapped in an outdated, narrow approach to value creation.”

The authors also articulated that pharma players, generally focus on optimizing short-term financial performance, overlooking the greatest unmet needs in the market as well as broader influences on their long-term success. They questioned: “Why else would companies ignore the well-being of their customers and the economic distress of the communities in which they produce and sell?”

Porter and Kramer advised the companies to bring business and society back together – redefining their purpose as creating “shared values”. It means generating economic value in a way that also produces value for society by addressing its challenges.In this article, I shall explore in this area.

Not CSR or Philanthropy, its engaging business as business, for social progress:

Creation of “Shared values” for a business is quite different from “Philanthropy” or “Corporate Social Responsivity (CSR)”. Philanthropy usually involves ‘donations to worthy social causes’ and CSR is primarily directed at compliance with community standards and good corporate citizenship. Whereas the creation of “shared value” means integrating societal improvement into economic value creation, making social improvement as an integral part of with a business model.

To create “shared values”, it is imperative for business organizations to create “social value” through active participation in addressing the social issues and needs related to the business. Or in other words, the creation of “shared values” would entail striking a right balance between “social value” and the “business value.”

An article titled “What Is the Social Value of Pharmaceuticals?”, published by FSG on February 13, 2014 dwells on the business relevance of creation of “social value” in the pharma industry. It writes,creation of “social value” corresponds to effecting positive change along the major societal challenges, such as affordable health care, by working more in collaboration with other stakeholders to address the needs of the underserved through commensurate value creation. This entails engagement of a business as a business, not as a charitable donor, nor through public relations, for social progress.

A resolution to create “shared value” in the pharma industry:

An interesting article, featured in SFGATE of the San Francisco Chronicle on July 11, 2018, elucidated that the reputations of drug makers have taken a hit over the past few years as the public and politicians have called out the companies for high prescription drug prices that even Americans are facing. Recently, President Donald Trump, reportedly, singled out the top pharma companies of the world for raising the list prices on some of its prescriptions.

Possibly it’s a sheer coincidence, but on the same day, an intent of creating “shared values” with the society got reflected in the statement of the president of the Novartis Institutes for Biomedical Research. The officialexplained, why his company has a ‘contract with society’. He admitted that: The cost of health care, which has been rising has left many on the hook for a larger amount of their prescription drug cost that can place a big burden on patients in many countries, including the United States.

Consequently, the pressure from the people who need medications is now on the pharmaceutical companies for doing right, he added. Thus, Novartis feels:”We have a contract with society, and society is our shareholder. A company like ours exists to have a definitive impact on life threatening diseases, to keep people alive and healthy for a long, long time, full stop” – the official concluded.

A laudable intent, but is it credible?

The concept of pharma having a contract with the society ‘to keep people alive and healthy for a long, long time,’ is laudable, but is it credible? This question arises because, just before public articulation of this intent, the same company, reportedly, entered into USD 1.2-million contract with President Trump’s lawyer, Michael Cohen, allegedly, to provide access to the US President.

The exact reason for the same is being investigated by competent authorities, including the US Senators. However, another report highlighted, “Novartis is among the drug companies that has put through significant price increases for its products since Trump took office in 2017 – in some cases more than 20 percent.”

Another repot of July 09, 2018, quoting a tweet of the US President, poured more cold water on the warm intent of pharma’s ‘contract with the society.’ According to this article President Trump tweeted: “Pfizer & others should be ashamed that they have raised drug prices for no reason. They are merely taking advantage of the poor & others unable to defend themselves, while at the same time giving bargain basement prices to other countries in Europe & elsewhere. We will respond!”

Consistently declining pharma’s image and public trust:

Many believe that due to such hyperbolic statements and conflicting actions of pharma, over a long period time, are driving down the public image and trust on the industry, in general, from deep to deeper level, which has not found its bottom, just yet.

The reality gets reflected in various well-recognized polls, conducted even in the top pharma market of the world, which is also one of the richest nations, globally. August 2017 Gallup Poll on ‘Business and Industry Sector Ratings,’ features pharma industry at the very bottom of the ranking, just above the Federal government.

The concern gets reverberated in the February 03, 2017 article titled, ‘How Pharma Can Fix Its Reputation and Its Business at the Same Time,’ published in the Harvard Business Review (HBR). The paper observes that the worrisome mix of little growth potential and low reputation prompts the pharma players, among other actions, developing new treatments for neglected populations, and pricing existing products at affordable levels – avoiding corruption and price collusion.

How will “shared value” creation help pharma?

The process of creating “shared values” will involve creating “social value” with all sincerity and a clearly defined purpose. Its outcome should be measurable, and the impact felt by the society. In tandem, striking a right balance between “social value” and the “business value” would call for a metamorphosis in the concept of doing business.

There aren’t too many examples of creation ‘shared values’ by pharma companies, yet. However, to illustrate this point, let me quote one such that was originated from India, which I had the privilege to observe closely. This initiative is ‘Arogya Parivar (healthy family) of Novartis in India.

‘Arogya Parivar’ is a ‘for-profit’ social initiative developed by Novartis to reach the under-served millions living at the bottom of the pyramid in rural India. As Novartis claims, since its launch in 2007, ‘Arogya Parivar’ is proving to be both a force for improving health in rural communities and a sustainable business. ‘Arogya Parivar’ is a commercially-viable program and began returning a profit after 30 months with sales increasing 25-fold, since launch. After successful implementation of this initiative in India, the company has created similar programs in Kenya, Indonesia and Vietnam, according to Novartis.

Conclusion:

The concept of ‘shared values’ emphasizes that business success of a company is closely related to the progress, development and wellbeing of the society where it transacts the business. This can be achieved by striking a right balance between the social need and the business need. In the pharma space too, the value creation in the business value chain may need to be redesigned to meet the ‘social value’. This happened as in the case of ‘Arogya Parivar’ initiative of Novartis in India.

Creating robust business models based on ‘shared values’, in sync with the business-specific needs of the society can help make more profit in areas where there is none, at present. It will also facilitate achieving additional growth of the organization and improve long-term competitiveness.

Consequently, pharma can earn recognition of the society as a powerful contributor for containing suffering and even death of many ailing patients, by increasing access to affordable medicines for those who need these most. This, in turn, would help pharma companies to improve their public image and reputation. Let me hasten to add that provided, of course, no countermeasures are taken by them, surreptitiously, as I have discussed above.

The good news is, some pharma players have already initiated action in this direction. Thus, I reckon, many of them would soon realize that creating ‘shared value – based’ business models are the way forward for sustainable business excellence.

By: Tapan J. Ray

Indian Pharma: Optimism, Concern and Retaining Trust

Posted on October 9, 2017 by Tapan Ray

As many would know, the significance of trust is profound. It is virtually all-pervasive. Building trust is fundamental in retaining any relationship – be it in the family, society or even in business, such as pharmaceuticals. For long-term success and sustainability of any enterprise, trust is of strategic importance, and will continue to remain so.

In that sense, it is interesting to note that a growing number of Chief Executive Officers (CEOs) of a variety of corporate business entities, including pharmaceutical and also from India, have started experiencing a new challenge in a new paradigm, more than ever before. The rapid pace of evolution of the state of the art technology is further complicating the quagmire. CEOs, in general, are realizing the hard way that ‘in an increasingly digitalized world, it’s harder for businesses to gain and retain people’s trust’, keeping their nose to the grindstone of the conventional business process.

This feeling has been well-captured, among other issues, in the 20^th CEO Survey titled, “Gaining from connectivity without losing trust”, conducted by PwC. The participating CEOs mostly believe that social media could have a negative impact on the level of trust in their industry over the next five years. With this trend, ‘as new technologies and new uses of existing technologies proliferate, they envisage new dangers emerging – and old ones getting worse.’ 1,379 CEOs were reportedly interviewed from 79 countries, including 106 from India in PwC’s 20^th CEO Survey.

In the context of Indian pharma sector, the above finding is unlikely to raise many eyebrows, rather be construed as an obvious one. In this article, keeping the above as the backdrop, I shall discuss what the Indian CEOs recently expressed regarding their near-term business performance. After analyzing their confidence level on business growth, together with critical concerns, I shall try to gauge the quality of interconnection between the critical success requirements for business growth, and the optimism they voiced, drawing relevant data from PwC’s 20^th CEO Survey, and other important sources.

Indian CEO confidence in business growth:

CEOs confidence, or optimism or pessimism about the business growth prospect of their companies is often used as a measure of ‘Business Confidence’. Financial Times defined ‘Business Confidence’ as “an economic indicator that measures the amount of optimism or pessimism that business managers feel about the prospects of their companies/organizations. It also provides an overview of the state of the economy.” A score above 50 indicates positive confidence while a score above 75 would indicate strong positive confidence.

According to published data, ‘Business Confidence’ in India increased to 64.10 in the first quarter of 2017 from 56.50 in the fourth quarter of 2016 with an. average 58.08 from 2005 until 2017, reaching an all-time high of 71.80 in the first quarter of 2007, and a record low of 45.70 in the third quarter of 2013.

More recently, as per Press Release dated September 22, 2017 of the National Council of Applied Economic Research (NCAER), ‘Business Confidence’ Index fell by 2.5 per cent in July 2017 over April 2017 on a quarter-on-quarter basis, for different reasons.

PwC’s 20^th CEO Survey, by and large, captures similar optimism, as it says: “Nearly three quarters of India’s CEOs are very confident about their company’s prospects for revenue growth over the next 12 months as opposed to 64% in the previous year. In terms of optimism, CEOs in India surpass their global counterparts (38%) and their counterparts in China (35%) and Brazil (57%).”

Interestingly, as the report says, the motivation behind high CEO optimism is primarily driven by those factors, which are being widely discussed, at least, over a decade, such as favorable demographic profile, rising income levels and urbanization.

A mismatch:

Remarkably higher confidence level of the Indian CEOs on business growth, as compared to their global counterparts, is indeed encouraging. Nevertheless, while exploring the reasons behind the same, a glaring mismatch surface between high level of CEO optimism and their concern on uncertain economic growth, as PwC’s 20^th CEO Survey indicates. 82 percent of Indian CEOs expressed concern about uncertain economic growth in the country, in this study. A staggering 81 percent of them perceive over-regulation and protectionist policies and trends, as serious threats to their growth ambitions. Intriguingly, 64 percent of CEOs in India are concerned about protectionism as opposed to 59 percent globally, as the report flags.

The concern about uncertain economic growth in the country has also been voiced by many economists. For example, in an article, published by The Times of India on October 04, 2017, Ruchir Sharma – Chief Global Strategist and head of the Emerging Markets Equity team at Morgan Stanley Investment Management, wrote: “The global economy is enjoying its best year of the decade, with a worldwide pick up in GDP and job growth, and very few economies have been left behind. India is one of the outliers, with GDP growth slowing and unemployment rising.”

Sharma further added: “The Organization of Economic Cooperation and Development (OECD) says that all 45 economies that it tracks will grow this year, the first time this has happened since 2007, the year before the global financial crisis led to a worldwide recession. Moreover, three quarters of all the countries will grow faster this year than they did last year; India is in the slumping minority, with GDP growth now expected to decelerate this year.”

This mismatch throws more questions than answers.

Wherewithal required to meet expectation:

It goes without saying that Indian CEOs must have required wherewithal to achieve whatever growth they think is achievable in their respective businesses. Besides financial resources, this will also involve having both, soft skills – which are basically ‘people skills,’ and the hard skills – that include an individual’s technical skill set, along with the ability to perform specific tasks for the organization.

A. Soft skills:

Indian CEOs identified ‘leadership’, ‘creativity and innovation’, ‘adaptability’ and ‘problem solving’ as the four important soft skills required to achieve the key business goals, according to the 20^th CEO Survey, as quoted above.

A mismatch:

Here again, a strong mismatch is visible between the ‘importance of the skill’ and ‘Difficulty in recruiting people with skill’, as experienced by the CEOs:

Skills	Importance of the skill	Difficulty in recruiting people with skill
Leadership	98	73
Creativity and innovation	95	74
Adaptability	98	66
Problem solving	99	64

(Source: PwC’s 20^th CEO Survey)

B. Hard skills:

Adaptation of any technology involves people with required hard skill sets in any organization. Currently, various state of the art technology platforms and tools, including digital ones, are absolutely necessary not just in areas like, research and development or manufacturing, but also for charting grand strategic pathways in areas, such as sales and marketing.

This is quite evident from PwC’s 20^th CEO Survey data. While 76 percent of Indian CEOs participating in the survey expressed concerns about rapidly changing customer behavior, 77 percent of them highlighted the need to create differentiation in their products and offerings, by managing data better. Both these can be well addressed by digital intervention. Interestingly, 81 percent of CEOs in India have stated that it is important to have digital skills, and 66 percent have already added digital training to their organizations’ learning programs.

A mismatch:

The intent of having adequate hard skill, such as digital technology, within an organization is indeed laudable. However, here too a key mismatch stands out regarding their overall perception of the digitizes word. This is evident when 73 percent of CEOs participating in this survey felt that it is harder for businesses to keep and gain trust in an increasingly digitized world.

On the contrary, a 2017 report of EY, titled ‘Reinventing pharma sales and marketing through digital in India’ says: “Digitization can not only enhance trust, transparency and brand equity, but also generate new revenue streams beyond the pill.”

The report further says: “Since 2000, digital disruption has demolished 52% of Fortune 500 companies. These companies have either gone bankrupt, been acquired or ceased to exist. The pace of transformation has increased, competition has intensified and business models have been profoundly disrupted. This shift is happening at breakneck speed across industries, and pharma can no longer be an exception. Customers have already embraced technological changes, through their many digital touch points, and pharma must look toward digital to re-imagine the customer experience. The urgency of acting is acute. It is time that pharma companies in India took a step back and re-envisioned digital as a core strategic enabler.”

I am, therefore, not quite sure about the thought process behind this perception of the CEOs in the digitized world. Instead, by increasing business process transparency, digitized world helps gaining and retaining trust not just of the customers, but all stakeholders, including the employees and the Government, further strengthening the relationship. This is now a well-established fact.

Conclusion:

While analyzing the optimism of Indian CEOs for business growth in the near future, alongside the key concerns, it appears, they are quite perturbed on retaining trust of the stakeholders, especially the customers. More importantly, a telltale mismatch is visible between their level of business confidence, and the reality on the ground – including wherewithal needed to translate this optimistic outlook into reality.

Such incongruity, especially in the Indian pharma sector, calls for a quick reconciliation. Ferreting out relevant facts for the same, I reckon, will be the acid test for evaluating the fundamental strength behind CEOs’ confidence for near-term business growth in India.

In tandem, reasonable success in creating a high degree of trust and transparency in the DNA of their respective organizations, will undoubtedly be pivotal for this optimism coming to fruition. The name of the game for business excellence in this complex scenario is – breaking status quo with lateral thinking.

By: Tapan J. Ray

Pharma ‘To Endeavor More To Be What It Desires To Appear’

Posted on August 21, 2017 by Tapan Ray

Reputation is one of the most fundamental requirements for long-term sustainability of any business, without facing too much of avoidable distraction, or even a tough headwind from any hostile business environment. This fact is, of course, no-brainer. We all know it, yet continue faltering – often not so very infrequently.

Before proceeding further, let me recapitulate, how has the Oxford Dictionary defined reputation? It says, reputation is ‘the beliefs or opinions that are generally held about someone or something.’ Or in other words, it is ‘a widespread belief that someone or something has a particular characteristic.’

The subsequent logical question then arises – how to gain reputation? Again, this was very aptly captured long ago by none other than Socrates, when he said: ‘The way to gain a good reputation is to endeavor to be what you desire to appear.’

Taking a leaf from this quote, in today’s article, I shall focus on whether pharma is making enough endeavor to be what it desires to appear in the eyes of its stakeholders, and the public at large. If not, what are the ways forward.

Not all of it is pharma’s own creation:

The host of reasons for pharma’s adverse public image, may not necessarily be its own creation. Some of these could well be lying miles away from its operational domain. For example, articles such as, what appeared on July 7, 2017 in the BMJ titled, ‘We need to end cut practice in Indian healthcare,’ doesn’t seem to be much related to pharma’s direct business operations. But in many respects, the subsequent unprecedented announcement of the Maharashtra government on enacting a new law called the “Cut practices in Medical Services Act, 2017”, casts a darker shadow, not just on the doctors’ reputation, but also covers the health care industry, in general, including pharma.

Nevertheless, a commonly perceived nexus between the doctors and pharma companies, or for that matter alleged malpractices in many hospitals, also prompts a rub-off adverse perception – indirect though, on pharma’s overall reputation. Such barriers also need to be carefully navigated through.

While moving towards this direction, effective management of consumer perception is also of critical importance. For, reputation is a complex blend of both reality and perception, where perception is believed to contribute around 66 percent, and reality – about 33 percent, in various organizational efforts to gain business reputation.

Changing from a dogmatic to pragmatic approach:

The above area of adverse perceptual impact causing further dents in pharma’s reputation, is understandable, as these are beyond its control, as such. Nonetheless, what is difficult to fathom, why does pharma continue to remain so dogmatic in recreating a make-believe image, that continuously gets negated by its own actions on the ground.

To illustrate this point when I briefly look back, one of the critical themes around which, especially the research-based global drug industry has been trying to gain reputation, over a long period of time, is woven around – ‘innovation’. Concerned pharma players keep trying to gain consumers’ trust and reputation by trying to make them believe that pharma is one of the most innovative industries in the world, thus possibly trustworthy.

The same tradition continues even today. Millions of dollars are being spent through various communication and advocacy campaigns, hoping to drive home this point. Nonetheless, the current reality is that the pharma consumers hardly believe that the industry is particularly innovative today. I discussed that point in my article of July 26, 2017, appeared in this blog.

Therefore, I shall not dwell on that area again. Instead, let me try to arrive at, how is this dogmatic approach going way off the mark from consumers’ expectations, repeatedly. More importantly, why it calls for a rather pragmatic approach from pharma to gain reputation, taking well into consideration – what the patients’ or patient groups’ expectations are from the industry, based on meticulous research findings.

Patients’ recent perception on pharma reputation:

A recent report by ‘PatientView’ – a leading specialist in understanding the patient movement, and its impact on health care, captured perceptions of patient groups on the pharma industry, in this area. The report is titled, ‘Corporate Reputation of Pharma in 2016 – The Patient Perspective.’ The phrase ‘corporate reputation’, as defined in the study, is the extent to which pharma companies are meeting the expectations of patients and patient groups, and was assessed by the following three types of measures:

How pharma’s corporate reputation compares with that of seven other healthcare-industry sectors.
How pharma’s corporate reputation has changed over the past five years.
How good or bad the pharma industry is at various activities.

The results of this study are based on a survey conducted between November 2016 to early-February 2017 on 1,463 patient groups; 46+ specialties in 105 countries. 47 pharma companies were assessed on seven indicators of corporate reputation, as follows:

Patient centricity
Patient information
Patient safety
Useful products
Transparency
Integrity
Effectiveness of patient-group relationships

47 companies surveyed include names, such as AbbVie, Allergan, Amgen, Astellas, AstraZeneca, Bayer, Biogen, Boehringer Ingelheim, Bristol-Myers Squibb, Eisai, Eli Lilly, Gilead, GSK, Hospira, Janssen, Merck & Co, Merck KgaA, Mylan, Novartis, Novo Nordisk, Pfizer, Roche, Sandoz, Sanofi, Takeda, Teva, UCB and Valeant.

Some of the key findings of this survey are as follows:

In 2016, just 37.9 percent of respondent patient group thought that the pharma industry had an “Excellent” or “Good” corporate reputation. Whereas 44.7 percent of patient groups had said the same in 2015.

In 2016, only 23 percent of patient groups thought that pharma’s corporate reputation had improved over the previous five years. Whereas 28 percent of patient groups had said the same in 2015.

In 2016 (as in 2015), pharma continued to be ranked 5th out of eight healthcare sectors (ahead only of generics, for-profit, and not-for-profit health insurers).

Patient groups thought that pharma’s ability to conduct activities of importance to them declined in 2016. Patient groups were more sceptical in 2016 even about pharma’s ability to innovate, which is an important patient-group measure of confidence in the industry.

Regarding the quality of pharma’s innovation across several geographic areas: patient groups in New Zealand expressed the least confidence in pharma’s ability to innovate; and those in Greece, the most.

What should pharma do?

Keeping the above findings in perspective, the consequent question that arises in this area is, what should pharma do to improve its patient centricity, and thereby to gain trust and reputation?

It is interesting to note that pharma companies should ‘consider the cost of drugs’, has featured as one of the top three, in the 14-point plan proposed by the 460+ patient groups in the above study, as follows:

Partner with patient groups
Provide more or better patient services
Consider the cost of drugs
Try to understand patients
Develop better medicines
Be transparent
Involve patient groups in the design
Look at continuity of care
Listen to patients
Help patients in a holistic way
Increase participation in clinical trials
Offer training
Concentrate on safety
Tailor services to individual patients

Conclusion:

Thus, the bottom line is, among various stakeholders, patients and patient groups, play a critical role in pharma to gain reputation. Winning their trust is widely considered as the substratum to get this process rolling, effectively. In that sense, pharma players individually, and the pharma industry collectively, need to have innovative, and game changing strategic plans to win the patients’ trust, for a long-term gain in reputation.

Repeatedly trying to communicate that life-changing medicines exist, because of pharma’s years of efforts in painstaking research and development that are hugely expensive and time-intensive, doesn’t seem to be working much, any longer. Patients are increasingly expecting improved access to drugs for various treatments, coupled with related value added services, from the drug players.

In such a scenario, many top drug companies, on the other hand, publicly express: ‘we are patient-centric’. This creates a logjam, as it were, to take pharma’s ‘patient centric’ endeavors from this point to where the patients’ expectations really are. Thus, I reckon, it’s time for pharma to deeply introspect and act on what Socrates had advised a long time ago, ‘‘The way to gain a good reputation is to endeavor to be what you desire to appear.’

By: Tapan J. Ray

Millennial Generation Doctors And Patients: Changing Mindset, Aspirations, And Expectations

Posted on November 7, 2016 by Tapan Ray

The term ‘Millennial Generation’ normally refers to the generation, born from 1980 onward, brought up using digital technology and mass media. According to ‘Millennial Mindset’ – a website dedicated to helping businesses understand millennial employees and new ways of working, the key attributes of this generation are broadly considered as follows:

Technology Driven:
Socially Conscious
Collaborative

The millennial mindset:

The publication also indicates that the overall mindset of the millennial generation is also vastly different from the previous generations, which can fall into four categories:

Personal freedom, Non-hierarchical, Interdependent, Connected, Networked, Sharing
Instant gratification, Wide Knowledge, Test and learn, Fast paced, Always on, Innovative
Fairness, Narcissistic, Purpose driven
Balance, Eco-friendly and Experience focused

Seeks different professional ecosystem:

In the professional arena too, this new generation’s expectations from the professional ecosystem are often seen to be distinctly different, as they are generally seen to be:

Willing to make a meaningful professional contribution, mostly through self-learning
Seek maintaining a reasonable balance between work and personal life
Prefer flexible work environment, unwilling to be rigidly bound by convention, tradition, or set rules
Impatient for fast both personal and organizational growth, often on the global canvas

The ‘Millennial Generation’ in India:

The millennium generation with a different mindset, aspirations and value system, already constitutes a major chunk of the Indian demography. According to the 2011 Census, out of estimated 1.2 billion population, around 701 million Indians (60 percent) are under 30 years of age, which also very often referred to as ‘demographic dividend’ of India.

Currently, a large number of Indians belonging to the millennial generation are entering into the work stream of both national and International companies operating in the country.

The challenge in healthcare arena:

In the healthcare sphere too, we now come across a fast increasing number of technology savvy and digitally inclined patients and doctors of this generation. Accurately gauging, and then meeting with their changing expectations has indeed been a challenging task for the pharma companies, and the related service providers.

Their expectations from the brands and other services, as provided by the pharma companies, don’t seem to be quite the same as before, either, so are the individually preferred communication formats, the way of processing, and quickly cross-verifying the product and other healthcare information. Before arriving at any decision, they were found to keenly observe the way brands are marketed, their intrinsic value, type and the quality of interface for engagement with them by the companies, whenever required.

Thus, from the pharma business perspective, qualitatively different strategic approaches, to both the millennial doctors and patients, would be of increasing importance and an ongoing exercise. The goal posts would also keep moving continuously. Achieving proficiency in this area with military precision, I reckon, would differentiate the men from the boys, in pursuit of business performance excellence.

In this article, I shall primarily discuss on the changing mindset and needs of the patients and doctors of the ‘millennial generation’.

A. Treating millennial patients differently:

Around 81 percent of millennial doctors, against 57 percent of older generation doctors think that millennial patients require a different relationship with their doctors than non-millennial patients. About 66 percent of millennial doctors actually act upon this and change their approach, as the survey reported.

The difference:

The key differences on millennial doctors’ treating millennial patients, are mainly in the following areas:

Expects more, doesn’t get swayed away: Millennial doctors are more likely to advise the millennial patients to do additional research on their own for discussion. 71 percent of millennial doctors believe it’s helpful for patients to do online research before their appointment. However, they don’t get swayed by requests from more-informed patients, as only 23 percent of millennial doctors say they are influenced by patient requests when it comes to prescribing a treatment, whereas 41 percent of non-millennial doctors report finding those requests influential.

Gets into the details: The millennial doctors are more likely to simplify and streamline explanations for older patients, whereas non- millennial doctors were more likely to simplify explanations for millennial patients too, treating them exactly the same way.

Relies on digital resources: Millennial doctors rely mostly on using digital resources for treating millennial patients, but only around 56.5 percent of them do so for non-millennial patients.

B. Treating millennial doctors differently:

For effective business engagement and ensure commensurate financial outcomes, pharma companies will first require to know and deeply understand the changing mindset, expectations, and aspirations of the millennial doctors, then work out tailor-made strategic approaches, accordingly, to achieve the set objectives.

Top 3 expectations from the pharma industry:

According to a June 2016 special survey report on Healthcare Marketing to Millennials, released by inVentive Health agencies, the top 3 expectations of millennial and non-millennial doctors from the pharma industry, are as follows:

Rank	Millennial Doctors	%	Rank	Non- Millennial Doctors	%
1.	Unbranded Disease Information	67	1.	Unbranded Disease Information	58
2.	Discussion Guides	48	2.	Latest Specific News	46
3.	Adherence Support	40	3.	Healthy Life Style Information	42

Pharma players, therefore, can provide customized offerings and services, in various innovative platforms, based on these top 3 different expectations of millennial and non-millennial doctors, to achieve much needed critical competitive edge for a sustainable business performance.

Brand communication process needs a relook:

The above report also noted a number of the interesting trends related to the millennial doctors. I am quoting below just a few of those:

Only 16 percent of millennial doctors found pharma promotional materials to be influential when considering a new treatment compared to 48 percent of non-millennial doctors who do.

79 percent of them refer to information from pharmaceutical companies only after they’ve found that information elsewhere.

65 percent of these doctors indicated, they did not trust information from pharmaceutical companies to be fair and balanced, while only 48 percent of their older peers shared that sentiment.

50 percent found educational experiences that are driven by their peers to be the most relevant for learning and considering about new treatments, against 18 percent of non-millennial physicians.

52 percent of them, when learning about new treatment options, favor peers as their conversation partners.

They are much more likely to rely on a third-party website for requisite product or treatment information

60 percent of millennial doctors are more likely to see a pharma rep, if they offer important programs for their patients, compared to only 47 percent of non-millennial doctors. This also reflects greater patient centric values of the millennial doctors.

However, an overwhelming 81percent of millennial doctors believe that any type of ‘Direct To Consumer (DTC)’ promotion makes their job harder, because patients ask for medications they don’t need.

41 percent of millennial doctors prefer a two-way and an in-person interaction, against just 11 percent of them with online reps. Here, it should be noted that this has to be an ‘interaction’, not just predominantly a monologue, even while using an iPad or any other android tablets.

Redesigning processes to meet changing expectations and needs:

Thus, to create requisite value, and ensure effective engagement with millennial doctors, the pharma companies may consider exploring the possibility of specifically designing their entire chain of interface with Millennials, right from promotional outreach to adherence tools, and from medical communications to detailing, as the survey report highlights. I shall mention below just a few of those as examples:

Communication platforms:

For personal, more dynamic and effective engagement, non-personal digital platforms – driving towards personal interactions with company reps, together with facilitating collaboration between their professional peer groups, came out as of immense importance to them.

Adherence and outcomes:

There is a need for the pharma companies to move the strategic engagement needle more towards patient outcomes. This is mainly because, medication adherence is a large part of the patient outcome equation. It involves a wide range of partnerships, such as, between patients and physicians, and also the physicians and pharma players. This particular need can be best met by offering exactly the type of collaborative approach that millennial doctors favor.

Medical communication:

Redesigning the core narrative of medical communication around a disease state and product, engaging the wisdom and enthusiasm of scientific, clinical, and educational leaders primarily to serve a well-articulated noble cause, are likely to fetch desired results, allaying the general distrust of millennial doctors on the pharma companies, in general.

Medical representative:

Earning the trust of the millennial doctors by respecting, accepting, and appealing to their value systems, is of utmost importance for the medical reps. To achieve this, drug companies would require to equip their reps with tools and programs that offer value in terms of patient support and adherence, while demonstrating compelling outcomes with a positive patient experience, and greater efficiency in treatment decisions.

Building reputation:

The “Purpose Generation” – that’s how millennials are often referred to. In that sense, to build a long lasting business reputation among them, pharma companies need to be in sync with this new generation.

Weaving a trusting relationship with them involves meeting all those needs that these doctors value, such as, adherence solutions, innovative patient support programs, and creating shared value for communities. This would mean, for many drug companies, charting an almost uncharted frontier, where there aren’t many footsteps to follow.

Need to induct younger generation to top leadership positions faster:

To capture these changes with precision, and designing effective engagement strategies for millennial patients and doctors accordingly, an open, innovative and virtually contemporary mindset with a pair of fresh eyes, are essential. As against this, even today, many ‘Baby Boomers’ (born approximately between 1946 and 1956), who have already earned the status of senior citizens, meticulously nursing a not so flexible mind with traditional views, still keep clutching on to the key top leadership positions in the pharma industry, both global and local.

This prevailing trend encompasses even those who are occupying just ornamental corporate leadership positions, mostly for PR purpose, besides being the public face of the organization, sans any significant and direct operational or financial responsibilities. Nevertheless, by pulling all available corporate levers and tricks, they hang-on to the job. In that way, these senior citizens delay the process of change in the key leadership positions with younger generation of professionals, who understand not just the growing Millennials much better, but also the ever changing market dynamics, and intricate customer behavior, to lead the organization to a greater height of all round success.

I hasten to add, a few of the younger global head honcho have now started articulating a different vision altogether, which is so relevant by being a community benefit oriented and patient centric, in true sense. These icons include the outgoing GSK chief Sir Andrew Witty, who explains how ‘Big Pharma’ can help the poor and still make money, and the Allergan CEO Brent Saunders promising to keep drug prices affordable. Being rather small in number, these sane voices get easily drowned in the din of other global head honchos, curling their lips at any other view point of less self-serving in nature. Quite understandably, their local or surrounding poodles, toe exactly the same line, often displaying more gusto, as many believe.

Conclusion:

The triumph of outdated colonial mindset within the drug industry appears to be all pervasive, even today. It keeps striving hard to implement the self-serving corporate agenda, behind the façade of ‘Patient Centricity’. When the demography is changing at a faster pace in many important countries, such as India, a sizeable number of the critical decision makers don’t seem to understand, and can’t possibly fathom with finesse and precision, the changing mindset, aspirations and expectations of the millennial generation doctors and patients.

Expectedly, this approach is increasingly proving to be self-defeating, if not demeaning to many. It’s affecting the long term corporate performance, continually inviting the ire of the stakeholders, including Governments in various countries.

From this perspective, as the above survey results unravel, the millennial doctors and patients, with their changing mindset, aspirations, expectations and demands, look forward to an environment that matches up with the unique characteristics and values of their own generation.

To excel in this evolving scenario, especially in India – with one of the youngest demographic profiles, proper understanding of the nuances that’s driving this change, by the top echelon of the pharma management, is of utmost importance. Only then, can any strategic alignment of corporate business interests with the expectations of fast growing Millennials take shape, bridging the ongoing trust deficit of the stakeholders, as the pharma industry moves ahead with an accelerated pace.

By: Tapan J. Ray

Democratization of Healthcare: An Evolving Trend Driven By Cutting-Edge Technology

Posted on February 15, 2016 by Tapan Ray

We have stepped on to a fascinating era of yet another disruptive innovation in a newly carved out space of the healthcare domain.

Such initiatives are driven by path breaking ideas, which are being translated into reality with the application of cutting-edge technology. All these are aimed at providing a plethora of unique healthcare related solutions in the cyberspace to various stakeholders, especially to patients through inexpensive smartphones of various types.

Although the process has just begun, but is moving at a rapid pace. In virtually no time, as it were, it is showing a great potential of delivering more accurate and affordable healthcare solutions to a large number of the population globally, particularly in the developing nations.

‘Democratization of Healthcare’:

The ‘patient empowerment’ of such kind, with technology enabled the power of personalized healthcare knowledge and information in an organized manner, has been termed as ‘The Democratization of Healthcare.’

The critical point to ponder, therefore, whether this fast developing state of art technological advancement has the potential of delivering a novel and much affordable process of disease treatment and management, in the real world. As it happens, the new paradigm would shift the focus of key stakeholders from doctors to patients, in a genuine sense, and almost irreversibly.

In this article, I shall deliberate on this wonderful emerging scenario.

A recent reiteration raises hope:

The following reiteration of one of the largest and most reputed tech giant of the world raises general hope that this process would soon come to fruition:

‘The democratization potential of healthcare interests most of us, as the injustice of fantastic healthcare available in some parts of the world, and others suffering needlessly.”

The above profound comment was made on a radio show – ‘Conversations on Health Care’, by none other than the Chief Operating Officer, Jeff Williams of Apple Inc. on January 4, 2016 and was reported accordingly by ‘appleinsider.com’ on January 06, 2016.

Jeff Williams also indicated in his talk, how smartphone technology can be harnessed for therapeutic purpose in disease treatment, as well. Citing an example, he said, detecting autism at an early age is a key to future treatment, as doctors can intervene – albeit to a limited degree – as long as the brain is still developing.

He referred to a study that found not just the potential in app-based smartphone screening of children, but can even go much further by delivering therapy and treatment.

The rapid progress of technology in this direction is very real, as ‘Apple’ and other smartphone health app developers are stretching the commoditization of computer technology to serve health sciences. In not so distant future, with relatively inexpensive smartphones and supporting health apps – the doctors and researchers can deliver better standards of living in severely under-served areas like Africa, where there are only 55 trained specialists in autism, Williams said.

Triggers a key shift in focus:

As I said before, unleashing the power of technology in healthcare solutions through smartphones will bring a fundamental shift in focus of all concerned, from medical doctors to ordinary patients.

This transformation seems to be rather imminent now, as equipped with detailed knowledge of various types of individual health and disease related information through their smartphones, the patients would position themselves in the driver’s seat, demanding more for affordable treatment of diseases.

Dr. Eric Topol, the author of the book titled, “The Patient Will See You Now”, thus very appropriately said, “MDs will no longer be considered ‘medical deities’, but rather professionals with whom patients will consult to get the proper treatment on the path of least resistance.”

Consequently, the pharma players and other related service providers would require to ‘walk the talk’ by being ‘patient centric’ in the true sense, and definitely not by using this profound term, as one of the tools of their mostly self-serving, advocacy campaigns.

Empowering patients:

As Dr. Eric Topol said, smartphone applications that can monitor throughout the day, such as, heart rate and rhythm, blood pressure, take and interpret an electrocardiogram, capture X-rays and analyze ultrasound, have the potential to reduce patient visits to doctors, cut costs, speed up the pace of care and give more power to patients. He emphasized though, digital apps won’t replace physicians. The patients would still be seeing doctors, but the doctor-patient relationship will ultimately be radically altered.

As an illustration, it is worth mentioning here, that taking a significant step forward in this direction, the U.S. Food and Drug Administration (USFDA) has already approved ECG apps by for consumers, which have been validated in many clinical studies.

Examples of Smartphone Apps for patients:

Smartphone apps are now available for different user segments. In this section, I shall focus only on patient-centered apps capable of performing a wide array of functions, such as managing chronic disease, lifestyle management, smoking cessation and even self-diagnosis.

I am quoting below just a few of these interesting apps, as reported in an article published by ‘The Online Journal of Public Health Informatics (OJPHI)’ on February 5, 2014:

A. For diabetic patients, over 80 apps on the Android platform alone, offer a variety of functions. These include self-monitoring blood glucose recording, medication or insulin logs, and prandial insulin dose calculators.

Yet another diabetes intervention app integrated communication between patients and a healthcare provider. Here, the patient would log fasting blood sugars, daily eating behaviors, medication compliance, physical activity and emotions into a mobile online diary. A remote therapist with access to these diaries would then formulate personalized feedback to the patient.

‘WellDoc’ is reportedly one such company that has already received approval of the US FDA for its mobile-enabled diabetes management program, and is being paid for by health insurers as they would for a pharmaceutical product.

B. For smoking cessation and alcohol addiction apps are also available. At least 47 iPhone apps for smoking cessation and another one called – ‘A-CHESS’ (Alcohol Comprehensive Health Enhancement Support System) helps preventing relapse in alcoholic dependency and harnesses mobile technology to improve treatment and motivation.

C. For asthma and allergic rhinitis patients, an app called ‘m.Carat’, developed at Faculdade de Medicina da Universidade do Porto, Portugal, , helps recording their exacerbations, triggers, symptoms, medications, lung function tests and visits to the doctor or the hospital. The users of this app can also receive disease education, medication information, task notifications, and synchronize records with an online database to better control their symptoms.

D. For psychiatric patients, available smartphone apps offer benefits of ambulatory monitoring, that randomly prompts the patient to self-report psychotic symptoms multiple times throughout the day.

E. For sickle cell disease another app allows patients access to an online diary for recording pain and other symptoms.

F. For patients with dementia, ‘iWander’ app assists the affected individuals with daily living, by providing audible prompts to direct the patient home, sending notifications and GPS coordinates to caretakers, or by calling local 911 (US emergency) services.

G. For HIV (human immunodeficiency virus) and STD around 55 unique smartphone apps are available. These are used for education, prevention, testing and to provide other resources.

Self-diagnosis without a medical visit:

The above article also states that patients may even use smartphone apps to attempt self-diagnosis without a medical visit. Patients with a camera-enabled smartphone can use apps to take photographs of skin lesions and send these to a remote server for computer analysis and/or review by a board certified dermatologist. However, such apps are still not without their pitfalls, which are being addressed by the scientists, expeditiously.

Nevertheless, informed debate has already started in search of an appropriate direction for self-diagnosis with the help of robust smartphone apps, without any in-person medical visits.

Need for ‘Regulatory control’ and ‘certification’ of health apps:

I hasten to add, all such smartphone health apps should not be allowed to come to the market without stringent regulatory control and a well thought out the certification process.

As in the United States, where the health apps are being assessed by the U.S. Food and Drug Administration (US FDA), in India too the Drug Controller General of India (DCGI) or any other appropriate and designated authority should approve and certify all such smartphone health apps, before the market launch.

‘Trust deficit’ poses a critical challenge to pharma industry:

Since the health apps opportunity is new, and still in its evolutionary stage, pharma industry, in general, does not seem to have fully accepted yet, that the process of ‘Democratization of Healthcare’ has already commenced. I reckon, the progress in this direction is unstoppable now. Nevertheless, many drug companies apparently continue to prefer sticking to the same proven path that had fetched enormous success for them in the past and, of course, also its associated business models.

Besides health apps, the democratization process of healthcare includes other technological platforms too, such as, social media and video communications, which have started to bring healthcare into patients’ homes. To be successful in a situation like this, gaining ‘patient trust’ has become more important today than ever before, for all concerned.

Unfortunately, the drug companies, generally speaking, continue suffering from an increasing ‘trust deficit’ of the key stakeholders. This has been vindicated by a September 9, 2013 study of Makovsky Health, which found:

Pharma websites continued to rank low in terms of traffic, with just 9 percent of Americans visit them for health information.

WebMD is the most frequented online source for healthcare information (53 percent)

Almost a fourth of consumers (24 percent) use at least one or a combination of social media channels – including YouTube video channels, Facebook sites, blogs, and Twitter feeds with links to other resources – to seek healthcare information

The writing on the wall:

Some major global pharma players apparently have clearly seen the writing on the wall, and started collaborating with the developers of various types of digital health apps.

Quoting from the May 02, 2014 edition of ‘MobileHealthNews”, I am citing below, just as an illustration, the initiatives taken in this space by some of the drug majors:

Pfizer (2014) had backed startup Akili in the development of a mobile game to help diagnose patients with Alzheimer’s. The game could also be used in the treatment or detection of ADHD and autism, among other conditions.

Johnson & Johnson’s subsidiary, Janssen Healthcare Innovations (2013), launched the new version of its free Care4Today medication reminder app and platform – Care4Today Mobile Health Manager 2.0. It has also overhauled Care4Today medication adherence app.

Sanofi US (2013) and the Prostate Cancer Foundation announced the creation of Prost8Care, an SMS system to help prostate cancer patients and their families understand treatment processes.

AstraZeneca (2013) announced a pilot with Exco InTouch to help patients suffering from Chronic Obstructive Pulmonary Disease (COPD), with mobile and online tools.

Sanofi’s (2012) iBGStar device became the first US FDA cleared iPhone-enabled blood glucose meter.

GlaxoSmithKline (2012) offered a free asthma management app called MyAsthma, for iPhone and Android users. The app’s core offering is an Asthma Control Test (ACT), which is a simple 30-second test providing users with an index score of how well they are managing their asthma overall.

The potential in India:

In India, ‘Democratization of Healthcare’ is believed to be more broad based, with a third of all Indian mobile users expected to own a smartphone by 2017.

This is vindicated by the Press Release of Telecom Regulator TRAI, India, pharma, drug, playersy Authority of India (TRAI) of December 30, 2015. It states, the Wireless Tele-density in India is 79.39 as on October 31, 2015. The shares of urban and rural wireless subscribers were 57.61 percent and 42.39 percent, respectively, during the same period.

Conclusion:

The process of ‘Democratization of Healthcare’ is gaining momentum with the digital health app developers flooring the gas pedal. Even the global tech giant – Apple, has expressed its support and vow of taking rapid strides in this direction.

As this fascinating process unfolds, the final disease treatment decision, from various medical options available, is expected shift from doctors to patients, and may be their closest relatives. In tandem, patients would learn to take ownership of their physical and mental health conditions for disease prevention of various types, besides general fitness.

The patients, empowered with relevant digital information and knowledge, on their health status, including the pace of disease progression, would play a pivotal role not just in reducing disease burden, but also in making overall cost of individual healthcare more affordable. Additionally, access to healthcare, especially in the developing world like India and in its hinterland, will be improved significantly.

Digital apps are not just limited to patients’ use, these are being developed with equal speed for doctors, diagnostic centers, and clinical trials, just to name a few. All these would substantially reduce healthcare costs and add speed to various disease treatments.

In this golden pathway, there are some thorns too, mostly in the form of important regulatory issues, which need to be sorted out, expeditiously. Increasing ‘Trust Deficit’ of stakeholders on the drug companies is yet another hurdle, especially when the primary focus of all would shift from doctors to patients. However, it appears, the pharma players will eventually have no other choice, but to willy-nilly mold themselves accordingly, primarily for survival and thereafter progress.

As I see it today, the fast evolving trend of ‘Democratization of Healthcare’, driven by cutting-edge technology, is virtually unstoppable now. The only question is how soon will it happen?

By: Tapan J. Ray

PILMAN

A Tapan Ray Website

Tag Archives: trust

How Creative Is Pharma Industry?

Patients’ Trust And Pharma Remain Strange Bedfellows?

Indian Pharma: Optimism, Concern and Retaining Trust

Pharma ‘To Endeavor More To Be What It Desires To Appear’

Millennial Generation Doctors And Patients: Changing Mindset, Aspirations, And Expectations

Democratization of Healthcare: An Evolving Trend Driven By Cutting-Edge Technology