The shifts unfolding are unlike anything the industry has seen so far.
Seismic changes are taking place within the world of pharmaceuticals. While this has always been an innovation-driven industry, the winners will approach innovation in new ways.
Innovation is no longer just about the product — it now encompasses how you do business, whom you do business with and how you mobilize your resources to contribute to healthy outcomes for patients.
The world of Pharma 3.0
Trends such as the patent cliff, decreasing R&D productivity, pricing pressures, globalization and shifting demographics have transformed the industry’s long-standing vertically integrated blockbuster model (Pharma 1.0) into today’s Pharma 2.0 business model.
Now, the industry is on the cusp of its biggest transformation yet as it begins to morph into a new healthcare “ecosystem” we define as Pharma 3.0.
In Pharma 3.0, pharmaceutical companies will be required to broaden their focus from simply producing new medicines to delivering healthy outcomes — transforming the very business of pharma itself — in a shift that will be driven through creative partnerships and business model innovation.
This new ecosystem will be comprised of established industry members, an increasingly informed consumer, and a host of non-traditional companies lured into the sector by such trends as health reform, health IT, comparative effectiveness and the rising confidence in consumer power.
The healthy outcomes ecosystem
From information technology companies to large retailers, telecommunications giants and consumer products companies, there will be no shortage of new players seeking to stake a position in the healthcare system of the future.
To remain relevant in the new ecosystem, traditional pharma companies will need to move quickly to:
- Redesign their business models and develop innovative medicines
- Understand how they fit into others’ business models
- Partner in creative new ways
Additionally, they will need to build models around a combination of three value propositions in order to deliver health status improvements:
- Manage patient outcomes (e.g., boosting patient compliance, targeted health care delivery)
- Expand access to health care (e.g., underserved/emerging markets, uninsured patients in industrialized nations)
- Satisfy unmet medical needs (e.g., complex indications and underserved therapeutic areas)
Navigating forward will require an understanding that innovation is no longer just about the product — it now encompasses how you do business, who you do business with and how you mobilize your resources to contribute to healthy outcomes for patients.