Mindset Change: Now A Bigger Factor in The Rise And Fall of Pharma Corporations

Currently, in the pharma industry across the world, almost everyone is talking, thinking, and trying to implement several significant changes – just to be in sync with the changing customer needs and market expectations. As Covid vaccination process gathers momentum with markets gradually opening up, many envisage even much bigger changes. Such changes encompass, medium to long-term strategic thinking process, re-engineering business operations, customer-centric new value creation and value delivery mechanism in the new normal.

Several pharma players have also started expressing it explicitly, even on their websites. One such example is a Novartis communique of January 21, 2021. It says: COVID-19 was a catalyst for change in healthcare during 2020 – an accelerator for digital health. As the virus spread exponentially, the world was forced to work virtually, wherever possible. Digital solutions were needed fast – not just to support remote working, but to keep the very fabric of business, healthcare, education, and essential services in operation. The need to cope with multi-faceted pandemic–triggered challenges of change, prompted the rise of digital health as the only viable option of the time, as it were. In the following months thereafter, it has set some emerging trends for digital innovation to meet global healthcare needs, which will continue through 2021.

The communique underscored: “For Novartis and many other pharmaceutical companies, the challenge was not just to enable employees to continue working, but to ensure that medicines reached patients as needed, and that healthcare professionals (HCPs) had the information they required to support their patients’ questions and needs. It was also essential to make sure that clinical trials remained on schedule and the development pipeline continued.”

Similar mindset was exhibited by many other pharma companies when the chips were down, and Covid vaccines were under development or just had hit the markets. Its impact, got reflected in The Harris Poll Survey of February 2021, which reported a peak positive rating of 62% for the image of the pharma industry – an incredible turnaround from 32% of just the previous year.

Therefore, the question, arises – with Covid vaccination initiatives gathering steam what will major pharma players, both local and global, possibly do? Will they use the pandemic period experience as a springboard – for more innovation of all kinds to reap a sustainable harvest – with an ongoing customer-centric mindset? Or they will try to get back to the old normal – with self-serving interests – till it stings – very hard. This article will explore that area.

What prompts the above questions?

The above questions are prompted by the fact that since then, pharma industry’s image slipped from a peak positive rating of 62% in February as the vaccine rolled out and then dipping to 60% in May and now at 56%, according to The Harris Poll Surveys. Thus, many wonders – ‘is it time to ask whether the halo around COVID-19 vaccine and treatment innovation is gone?

Further, some recent instances on pharma’s reverting to self-serving interests, could also play some role in this regard. Interestingly, notwithstanding pharma’s image going south after achieving a peak of 62%, the ghost of unreasonable drug pricing appears to haunt again.

As an illustration, amid Covid pandemic, the public perception that pharma companies’ business practices changed – from mostly self-serving interest orientated – to meeting customer value and expectations, did not last long. Several actions akin to pre-Covid period, went against the above perception. These include, Covid vaccine prices and Biogen’s $56,000 (Rs.40 lakhs/year in India) price tag for its recently approved Alzheimer drug – Aduhelm that requires monthly infusions with no clear limit on treatment duration. No wonder, Alzheimer’s Association, reportedly, finds this price simply unacceptable,’ as it further “complicates and jeopardizes sustainable access to this treatment” and could further deepen health equity issues.

I reckon, how pharma companies conduct their strategic business operations from now on will possibly reveal the nature of Covid-triggered changes, if at all, within the industry. Industry watchers generally believe the majority will follow the digital transformation path with a new organizational culture, and an agile mindset to always be in sync with stakeholder values and expectations. However, there are also some, who want to mostly revert to the pre-pandemic business culture, practices, and mindset. It will be interesting to know what some top ‘Think Tank’ of the pharma industry envisage.

What some top pharma ‘Think Tank’ envisage: 

Notwithstanding some recent developments as mentioned above, which could be outliers, some top pharma think tanks are quite optimistic about the continuity of Covid triggered positive changes in the industry. For example, in an interview with Pharmaceutical Executive, published on May 19, 2021, a current Amgen Board Member and former CEO of several global pharma majors - Fred Hassan, made some profound statements.

He reiterated, ‘COVID-19 has accelerated the ongoing shift to enterprise-level digital transformation across Fortune 500s.’ Fred further emphasized, “the impact of digital in helping transform the customer experience or to improve efficiencies, is now a bigger factor in the rise and fall of corporations. Astute C-suite executives recognize the opportunity to not only enable, but to also empower their teams to quickly embrace digital as a differentiating tool.” 

A journey – not just a destination:

The above interview further underscored – ‘Digital transformation is a journey — not just a destination.’ The speed of transition to digital must be accompanied by sustainability. It should take all stakeholders on board in the journey of change. The key requirement is to ‘actively energizing the entire organization so that people internalize the digital mindset to help empower their customers, their own company and themselves, as individuals.’

More importantly, ‘Dithering around scaling past the initial digital pilots, is rapidly becoming an unacceptable option,’ as Fred Hassan cautioned. Which is why, while the C-suite needs to actively lead during a digital transformation, they must leverage the commitment of their middle management to motivate front line managers to keep following through with passion, courage, and tenacity. This is because: ‘Digital transformation is a journey – not just a destination.’

Indian pharma suddenly had to ride the wave of digital transformation:

The unprecedented pandemic literally compelled most Indian pharma companies of all sizes, to ride the digital wave in business, mostly for survival – to keep the business operations running. However, with the passage of time, Covid related disruptions started accelerating their journey for digital transformation – at a varying pace, though. This was also reported in the KPMG paper – ‘India’s healthcare sector transformation in the post-COVID-19 era,’ published on February 01, 2021.

The paper also articulated that this unprecedented health crisis “have not just laid bare the myriad challenges and gaps in our health system, but also highlighted the importance of investing in ‘well-being’ at both personal and system levels. It has ushered in an era of digital and technological innovations and advancements that is expected to help communities fulfil those requirements at a much faster pace.”

The pandemic has also accelerated the pace of evolution of ‘Smart Healthcare’ in India. This is also not a destination, but a journey with the digital transformation process, where changing or flexible mindset of the leadership, is the catalyst for change.

‘Smart Healthcare’ is also a digital journey:

As more and more health care customers are entering the digital space, triggered mainly by Covid appropriate behavioral norms, Virtual Healthcare initiatives are also increasing manifold, backed by robust supports from the Government. As a result, several integrated ‘Smart Healthcare’ platforms like Telemedicine, are now, reportedly, being, considered as the “Natural evolution of healthcare in the digital world.” Specifically, in the Indian scenario of low doctor to patient ratio, telemedicine has the potential to be one of the frontline health care value delivery systems, in the “new normal.”

Capturing early signals for such changes in the market trends, and leveraging the same to create a win-win situation for both the company and stakeholders, would necessitate a changing or flexible pharma leadership mindset. The reason being the digital transformation of an organization is an ongoing process with increasing rate of obsolescence of digital tools, platforms, and applications. Let me illustrate this point taking ‘Smart Healthcare’ as an example.

‘A bigger factor in the rise and fall of corporations:’

In today’s digital environment any transformation initiative is a continuous journey, and not a one-time exercise. Digital transformation of an organization – if, as and when pursued for business excellence in the new normal, would demand, at least, two big leadership commitments. These constitute – one, to continuously exceed stakeholder expectations in value delivery, and the other – a changing mindset that always puts customer perceived value on a higher pedestal than a company’s self-perceived value, both for product and services.

For example, for telehealth to carve out its niche as a dominant force in health care after the pandemic ends, will depend on how successfully virtual health care is humanized that will allow physicians and patients to build and maintain trusting relationships. These issues were well deliberated in Harvard Business Review article – ‘3 Ways to Humanize the Virtual Health Care Experience,’ published on March 25, 2021.

The paper concluded by emphasizing, the future rate of adoption of telehealth will ‘heavily depend on its ability to support a trusting relationship between patients and physicians. As provider organizations choose telehealth technologies and digital health companies develop new tools, they must keep the core human needs of both patients and physicians front and center.’

Conclusion:

The above examples clearly point out that any digital transformation process, be it of a corporation or of a system, such as telehealth, is a journey and not a destination. To successfully leverage the benefits of moving into a digital frontier would call for a changing or a flexible mindset of the provider or its leader.

This requirement undoubtedly, therefore, is ‘a bigger factor in the rise and fall of corporations,’ or any digital application, platform, or a system. Which is why, as many believe: ‘pharma still needs to be on its front foot and pushing forward,’ in the new normal. Going back to the traditional practices of the old normal is not an option, any longer.

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.

 

 

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