If you own a pharmaceutical company or work in the industry, there are plenty of problems facing you and your business. But, what are they, and what can you do about them? In today’s guide, we’re going to go through some of the biggest challenges to pharma and suggest some ideas for getting past them.
One of the most worrying aspects of the pharmaceutical industry is the state of the global economy. There is a lot of concern at the moment, with markets all over the world suffering from major blips. And, as we learned from the last financial crisis, it can have an enormous effect on spending in all areas. For example, in the Eurozone crisis between 2010 and 2011, it cost pharma supply chain and sales over 7 billion Euro. Another crisis, in China, perhaps, could prove even more devastating. Pharma companies have to be flexible in their approach – as all other industries must.
The end of the blockbuster era
The days when the blockbuster drug announcements take the world by storm are nearing an end. Science has made most of its principal discoveries with regards to medicine, and it’s now just a case of refinement. For pharma companies, this causes a problem. The blockbusters make a lot of money, which can be used for further research and development. Without that source of income, there need to be robust policies in place to maximize revenues generated by more specific drugs. Which brings us to our next point.
Because of the progressive way we understand a disease, every new idea for treatment becomes more specialized. It takes a lot of effort to sell these drugs, both regarding production and marketing. And, of course, if there are any problems in the manufacturing process, there will be high costs for your inability to sell your product. It will take a lot more expertise for these specialist drugs to become a success in the market, which, again, will see a rise in costs.
One of the ways pharma companies have tried to tackle the blockbuster issue is through patents. You make a drug, protect the rights for a couple of years, and charge high prices to get your money back. However, times are changing, and this is starting to have a weaker effect. Why? Generic manufacturers are challenging more patents. And, health care providers are backing them because they are cheaper. There is also a problem from developing countries, who cannot afford to pay the high prices. Of course, they still want access to the drugs – so their only option is to pressure the pharma businesses to reduce those costs.
Patients are a lot more clued up these days, and this brings benefits and disadvantages to pharma companies. On the one hand, consumers are knowledgeable about their rights. Any mistakes from a pharma company can expect a suitable punishment. Side effects and dosage issues can lead to expensive lawsuits. You can view more from Brown and Crouppen to learn how much impact that can have. However, patient power also means better patient choice. So, patients are starting to apply a lot more pressure on their doctors to give them the treatment they want. It’s a complicated scenario, as both sides of the coin can easily flip to the other. But, pharma companies should begin to understand the impact they can have on patients. They must have robust protection in place for either outcome.
Large pharma businesses are taking a lot more interest in the generic companies these days. Every year, you will hear about three or four smaller companies cashing in from a sale to a large operation. And that can be a problem for smaller firms. The giants of the industry are getting bigger, and if you want to keep your business to yourself, it will become a lot harder to do so.
Rules are difficult for all industries, but there is a lot of pressure on governments to have stricter controls on pharma. Not only that, of course, but to succeed in medicine, you have to satisfy different markets. That means a lot more testing, of all different kinds, to make sure that those regulations are satisfied. Key areas of concern for pharma companies should be annual fees, drug approvals, and advertising and marketing. And, they should also keep a watchful eye over pressure groups from animal welfare and environmental groups. As these organizations grow in influence, you can expect further regulatory change to take place.
Digital marketing is here to stay, but the pharma industry has yet to embrace it. There’s an easy reason they can’t – they simply don’t know how to. A Facebook page can be great for the likes of Coca-Cola or Red Bull because they connect with millions of people. But a drug company? It’s going to be a lot tougher to make the switch from more traditional marketing tactics. That’s not to say that there is no progress, though. Bayer, for example, has been using social media to great effect in recent years. If your company can show your working values and your responsible approach, then perhaps you can enjoy some similar success.
Loss of doctors
Pharma companies are also beginning to change their relationships with physicians. There is a lot more focus on the old school practices of yesteryear in the mainstream, for a start. Consumers, media reporters, and governments are all unhappy with the levels of inappropriate relationships. The spotlight is firmly on the pharma companies to clean up their methods of getting their products into the healthcare system. And, of course, it makes little economic sense to fly doctors in and out of all-expenses-paid trips to congresses. So, new ways of getting your message out there are going to have to be a priority. Not just for financial reasons – but also to keep your business held in positive regard.
Do you serve the pharmaceutical industry? Let us know your thoughts about how these issues affect you!