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The Importance of Managing ‘Perception’ in Pharma

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Each one of us – individually or collectively in a society, community or even as a supporter of anyone or anything, view certain things in a certain way, and tend to believe only this is true. This process consequently leads to developing a ‘perception’, which the Oxford dictionary defines as: “The way in which something is regarded, understood, or interpreted.”

A ‘perception’ once formed, creates a long-lasting impact – helps form a strong opinion, often making people judgmental in their expressions. Based on ‘perception’, people also try to act and influence others, which are not always in a persuasive manner. On the contrary, the methods, are at times rather coercive, using fear as the key. The sources that help create ‘perceptions’ may not be genuine, often fake or doctored and picked-up from half-baked, unproven and unverified provenance.

Just as any other business, in pharma industry too, stakeholder ‘perception’ plays a critical role, especially in building or tarnishing reputation of the sector or individual companies. In this article, I shall discuss, the importance of managing perception – the right way – overcoming a key barrier, for sustainable business success.

‘Perception’ often stands between success and failure or winning and losing:

In today’s world ‘perception’ often stands between success and failure or winning and losing, more than ever before. Creating and maintaining a ‘positive perception’ is time consuming and a challenging task, for anything. Interestingly, a negative ‘perception’ may also be deliberately created for self-serving purposes, and that too in a much shorter time. Although, there is a high financial cost attached to it, such instances aren’t too few, either.

Umpteen number of instances can be cited, in this regard. However, to drive home the point, let me quote just two examples – the first one is of a negative ‘perception’ mostly created by the industry from within. The other one – again a negative perception that prevails outside the industry, but mostly created due to the acts pursued within the industry. Interestingly, both these adversely impact the pharma consumers too, and are tough to neutralize.

1. ‘Perception’ created by the industry insiders:

The general ‘perception’ that ‘branded generic drugs’ are superior to more affordable ‘non-branded generic medicines’, mostly in terms of overall quality, efficacy and safety. This negative ‘perception’ has been successfully created without enough credible scientific evidence, and irrespective of names, size and the operational scale of the manufacturers. It is worth noting, both need drug regulatory approval and all such approvals come only in the generic names – and not in any brand name. The brands for a generic drug molecule may be as many as, say sixty or hundred, or even more. So are the numbers of ‘non-branded generics.’

To enable the consumers availing benefits of this category of drugs in reducing out of pocket expenditure on medicines, both the State and the Central Governments in India are trying hard through various measures, such as ‘Jan Aushadhi Scheme’. But the negative perception towards ‘non-branded generics’ doesn’t seem to wane a bit, in the face of an ongoing campaign to maintain the status quo.

2. ‘Perception’ created outside, due to the acts of the industry:

Similarly, the general negative ‘perception’ leading to a declining reputation of the industry, prevails across the world – even in India. Again, the issues leading to such negative perception may, at times, be grossly exaggerated and generalized. But the fact remains, despite serious attempts by individual companies and their lobby groups to negate the same, it continues to exist. Nevertheless,continuing efforts by the industry in this direction, which are often quite expensive, are visible globally.

Let me illustrate this point quoting a recent media report on PhRMA – arguably the largest pharma trade body globally. As the pharmaceutical industry faces potential pricing reform and continued criticism from patient advocates, PhRMA reportedly spent US$ 15.5 million lobbying in the first half of this year, which is an 11.5 percent increase (US$ 1.6 million) compared with the same period last year. But, the negative ‘perception’ is too strongly entrenched to neutralize so quickly and effectively. It continues to exist.

That the money spent to alleviate the impact of negative ‘perception’ has not yielded results since long, is vindicated by the June 19, 2018 Business Insider report. Quoting the research and consulting firm Reputation Institute, it says, in 2018, the pharma giants saw a 3.7 percent decline in reputation score from last year. This was driven by a decline in the public perception of transparency, openness and authenticity of drug makers. In the midst of an overall descending trend, of the 22 pharma companies ranked, Sanofi features in the first and Pfizer takes the last positions.

Reported practices of drug makers also influence public ‘perception’: 

While explaining why Pfizer has been ranked 22 with a strong negative ‘perception’, the same Business Insider article reported as follows:

“Pfizer had the lowest reputation score among the pharmaceutical companies that the Reputation Institute looked at, based on the general public’s perception of the product, prices and public hospitality. It was reported in May that Pfizer used charity to mask a heart drug price hike. Pfizer also had a huge role in the drug shortage crisis, according to Fortune.”

Similarly, in a relative yardstick, better public ‘perception’ for Sanofi’s among the big pharma players were ascribed to the following reasons:

“Sanofi’s winning characteristics lies in its promotion of ethics and transparency, according to Reputation Institute. Sanofi has in the past year promised to limit price increases and disclose ‘transparency reports’ behind overall costs of its drugs.”

Destructive power of negative ‘perception’ on pharma industry:

An interesting survey, titled “Restoring trust in the pharmaceutical industry by translating expectations into actions” conducted by PricewaterhouseCoopers (PWC) Health Research Institute captures the realities of ‘perception’ on the pharma industry. Pharmaceutical industry executives, consumers, and stakeholders, such as doctors in physician groups, researchers in academia, former health policy makers, hospital executives, managed care organization executives, participated in this survey.

The paper highlighted that ‘perception’ driven peoples’ behavior is triggered by a myriad of reasons attributing to the recent loss of trust of key pharma stakeholders’, such as regulators, payers, physicians, and patients. The authors suggested, the industry should act to restore trust as the central tenet of all of its relationships.

Two major perceptions of pharma consumers and stakeholders were captured, as follows:

  • A high percentage of pharmaceuticals in the total healthcare costs, distorts the value–for–money argument used by the industry.
  • The process and the nature, extent and quantum of money spent on pharmaceutical sales and marketing lack transparency, especially with respect to drug risks and benefits.

Constructive power of positive ‘perception’ needs to be strengthened:

Likewise, the constructive power of positive ‘perception’ needs to be strengthened.

Let me illustrate this point with three examples out of many. The first two examples come from the pharma players in India, and the third one from a top non-pharma giant.

- To add public confidence to the corporate brand and strengthen its image among its stakeholders in India, Mankind Pharma appointed Amitabh Bachchan as the brand ambassador. The company wants to primarily emphasize the importance of good health and affordable treatment for all.

- To enhance public ‘perception’ and corporate reputation further, Abbott rolled out a corporatecampaign in India – ‘live life to the fullest.’ The advertisement communicates to the people in an interesting way that “At Abbott, we’re all about helping you live the best life you can through good health. We keep your heart healthy, nourish your body at every stage of life, help you see clearly, and bring you information and medicines to manage your health. Every day and around the world, we’re discovering new ways to make life better.”

Since,the public ‘perception’ of pharma keeps getting worse, let me illustrate the point of constructive power of ‘perception’ from the huge success of several companies from the tech industry. As featured in Tech Times on July 23, 2016, in the ‘perception strength’ of customers in the world on a yearly basis, Apple Inc ranked the world’s top company in 2016 followed by Microsoft.This survey conducted by FutureBrand asked 3,000 customers to rank the big enterprises by 18 different factors, such as trust, price premium, individuality and innovation.

As defined by the survey report, “future brands” are those with a high chance to grow in the future. One of the defining characteristics of such a brand is that it has a consistent balance between the customers’ perception of its purpose and its delivered experience, the article indicated.And that’s exactly what constructive power of ‘perception’ that needs to be strengthened.

…But a key barrier to remedial measures still exists in pharma:

Regardless of industry’s intensive advocacy and multimedia initiatives, a strong negative ‘perception’ on pharma business persists. One of the reasons could be that the nature of most of these overt and covert measures questions the stakeholders for their negative ‘perception’ – justifying the industry practices. This approach often boomerangs. Consequent responses keep getting stronger – leading to a no-win situation. This arises out of a discord between the two concerned entities on the merits of the views that lead to adverse ‘perception’.

The PWC research paper quoted above also substantiates this point. It brings to the fore that pharmaceutical executives and stakeholders hold strikingly different views on a number of issues related to the development of ‘perception’ affecting the reputation.

The article, titled ‘Reputation and Its Risks’, published in the February 2007 issue of Harvard Business Review (HBR) also emphasizes, a clear recognition that reputation is a matter of ‘perception’ of stakeholders, will help companies to effectively manage their reputation. It also says, if companies fail to be in sync with stakeholders’ changing beliefs and expectations, building reputation through effective ‘perception’ management, would appear a tough call.

Conclusion:

Public ‘perception’ plays a crucial role, not just in shaping government policies and regulations, but also in the long-term business success. More positive the ‘perceptions’ are, easier will it be for the company to smoothly sail through, in business – even while navigating through occasional headwinds. Thus, the ability in shaping up a positive ‘perception’ for any business, is fast emerging as an antidote even to any possibility of getting ultimately shipped out. This ability is not dependent just on presenting hard positive facts to all concerned, but a tad more.

Which is why, it is so critical to understand the root cause of the views or ‘perceptions’ of the stakeholders in the industry or an individual company. In case of pharma, when the ‘perception’ is so negative, it will be worthwhile to neutralize it first, rather than immediately trying to counter it with a fresh coat of yet one more fact-based narrative. As a ‘perception’ is not necessarily based on hard facts, such attempts may lead to a never-ending debate on which ‘perception’ is right – ‘your perception’ or ‘my perception’, rather than ‘what is right to do’?’

There lies, therefore, the criticality of effective management of ‘perception’ in pharma. The situation, I reckon, would be even more challenging in the days ahead, if the stakeholders and the pharma industry continue to hold strikingly different views on a number of crucial issues related to the development of such ‘perception’ – further denting its already dented reputation.

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.

For Patient-Centricity: Emerging a C-Suite Role

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Regardless of skepticism of many, the formidable power of physicians to take all treatment decisions for patients, is gradually getting moderated, globally. Although, its pace may vary from country to country. An increasing number of more informed patients are carving out a greater role for themselves in this important process.

The central focus for brand demand generation can no longer remain just on the doctors. This is because, as I wrote this in my article, published in this Blog on July 06, 2015: “Slowly but steadily the process of taking treatment decisions for the patients is undergoing a metamorphosis, where well informed patients no longer want to play just a passive role. These patients want the doctors to take a final decision on their treatment only after meaningful interactions with them.” Besides a broad prescription pattern, this includes the medicines that they will consume, including meaningful details on product cost against the benefits to be accrued.

The age-old practice of doing a little bit on patient education or compliance, are grossly inadequate in an evolving new scenario. The good news is, many pharma companies have started realizing that appropriate engagement with patients to deliver what they want and more, can lead to better financial performance.

Consequently, the ball game for prescription demand generation is showing early signs of a change – somewhat radical in nature. To spearhead this unavoidable metamorphosis for the organization, there surfaced a brand-new role of a CxO – The Chief Patient Officers (CPO).

This new senior management position is expected to direct organizational focus on patients. Understand their concerns, needs, wants and goals, particularly in the disease areas where the company represents. And finally, give shape to new multichannel well-coordinated platforms of patient engagement, for better commercial returns. In this article, I shall try to explore how this transformation pans out, if at all.

The direction is right, but patients must feel the change:

As I said before, some pharma players have started accepting the reality. The crucial need for an organization to become ‘Patients-Centric’ can’t be wished away anymore. For example, a 2015 “Industry Healthcheck” survey where 1600 pharma executives participated, found that 85 percent of respondents agreed that ‘Patient-Centricity’ is the best route to improve profitability, in the fast changing business environment.

It is perhaps well understood that the pharma industry has arrived at this point due to increasing access of the general population to easily available, all-kind of information on the cyber space, including health care. The enabling facility has already prompted many patients evaluating various treatment options for a disease, including choice of drugs and their cost.

As a result, pharma companies felt the necessity to have a new leader who will give a new perspective and direction in creating a new value for the organization, for a sustainable progress. This involves charting a comprehensive pathway to gradually shift the entire company focus on ‘patients for products’, and not on ‘products for patients.’

According to reports, a few global pharma majors, such as Merck and Sanofi already have their CPO in place, but patients are yet to feel any difference on the ground even for these companies, as many say.

What exactly is ‘Patient-Centricity?’ – Two perspectives:

It won’t be a bad idea to get to know two different perspectives on what ‘Patient-Centricity’ exactly is – one from a CPO and the other from patient groups, as follows:

A. 3 three pillars of ‘Patient-Centricity’ from the CPO perspective:

To get a ringside perspective to this question from the industry, let me quote from the first CPO - Anne C. Beal appointed in a top-10 pharma – Sanofi, on March 31, 2014, though the CPO position is in existence, since 2012.

On December 2014, at the 11th annual Patient Summit USA conference, Anne Beal, reportedly deliberated on the three pillars of her company’s patient-centric strategy, which I shall describe, as follows:

  • Utilizing patients’ input to get a better sense of their needs in order to design and deliver solutions that help fulfill them.
  • Engaging and supporting patients to ensure the solutions that the company delivers help enhance their lives and improve outcomes.
  • Involving with the company employees and supporting them to create an engaged community and patient-centric culture.

B. 9 attributes of ‘Patient-Centricity’ from the patients’ perspective:

‘Patient View’ – a UK-based research, publishing, and consultancy group, arrived at the ‘9 Key Attributes’ of ‘Patient-Centricity’. This is based on the analysis of feedbacks (2016-17) from 2,000 patient groups worldwide, 50+ different medical specialties in 100+ countries. The critical attributes of the same that patients want to see in a drug company can be summarized, as follows:

  • Demonstrate integrity and authenticity through all company actions.
  • Understand all the issues that patients face ‘beyond the pill’ and help in dealing with them.
  • Transparency in drug pricing policy, research, results, funding relationship.
  • Ensure that all patients are included in access strategies, regardless of the returns to the company.
  • Products to provide quantifiable value to patients.
  • Reliable supply and comprehensive patient safeguard.
  • Provide quality product information – Consistent, current, balanced and usable.
  • Patient group relation – good intention, effective governance, communication and training.
  • Ensure patients are engaged and their opinions are sought at each stage of R&D.

On a broader canvas, the two perspectives on ‘Patient-Centricity’ – one from the CPO and the other from the patients’ groups, do have some important similarities. Nevertheless, I reckon, the CPOs would still need to cover more ground to match patients’ expectations from a ‘Patient-Centric’ pharma company. 

Claimants of ‘patient-centric’ focus are many, but few deliver consistently:

Quite expectedly, there are many claimants for a ‘patient-centric’ organizational focus. Interestingly, few actually deliver consistently. This was vindicated in the article – ‘How patient-centric is the pharma industry’, published by PDD - a design and innovation consultancy firm on June 06, 2016.

The paper indicates both the up and downside of pharma company claims on ‘Patient-Centricity.’ The upside is that the hype has influenced, at least, some drug players to openly talk about the need to shift the company focus more on patients. A few have initiated some tangible action, as well. Whereas, the downside of it is the lack of consistency in the enthusiasm of ‘patient-centric’ actions by these companies. To illustrate the point, let me quote the following two examples from the article:

  • In the 2013 survey on ‘Patient-Centricity’ by the research firm ‘Patient View’, ViiV Healthcare (the GSK & Pfizer joint venture focused on HIV therapies), Gilead, AbbVie, Menarini and Janssen occupied the top 5 spots.
  • However, in the ‘eyeforpharma Barcelona Awards 2016 ’ that too focuses on ‘Patient-Centricity’, none of these companies featured in the “Most Valuable Patient Initiative or Service” category. Whereas, Sanofi took the top spot, and Merck, Roche, Novartis and TEVA were the remaining nominees.

The criteria of the two selection processes, apparently being similar, this is interesting. More so, when the ‘patient-centric’ focus of an organization is an ongoing strategy, with a ‘top priority’ tag attached to it.

Be that as it may, that some serious efforts being made by a few companies in this area, can’t be brushed aside, either, regardless of the fact that the CPO position came into existence, since 2012. It flagged, at that time, the criticality of ‘Patient-Centricity’ in the pharmaceutical business and possibly, sent a signal to pharma players for a course correction, in this direction, soon enough.

Conclusion:

In an interview, published in December 2016 issue of McKinsey Quarterly, LEO Pharma’s president and CEO, Gitte Aabo, aptly summarized the process of ‘Patient-Centricity’, as follows:

“Patient-Centricity means being deeply entrenched in the patient’s needs, not just thinking about how to develop new products and new features. It means reaching out to patients and considering treatments that will help them in whatever situation they find themselves in.”

However, since long, most drug manufacturers are apparently solely driven by commercial considerations, both for new drug discovery and also in generic product development. Subsequent marketing strategies are obviously an integral component of the same organizational thought leadership and value chain. Several examples from the current status of the R&D pipeline for multi-drug resistant antibiotics, or what is happening even with the generic drug pricing in many countries, including the United States, will vindicate this point.

That said, a mild wind of change on the sails of traditional pharma mindset seems to be slowly catching up, as some CPOs position themselves in the saddle. Hopefully, this will  ultimately make patients the centerpiece of pharma business. Can more of this kind of actions be construed as signals for imbibing ‘Patient-Centricity’ by the drug companies? Will its impact be visible and felt by all – in real life, soon?

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.

The Hype of Digitalization in Pharma Marketing

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Having access to the fountain of knowledge residing in the cyberspace, fueled by word of mouth information and aided by social media, patients’ behavior is fast changing globally. Its degree may vary. But the change is real. The good news is – in a digital world of today, people are talking about ‘digitalization’ to rejuvenate per dollar productivity even in the pharma business, while navigating through a strong environmental headwind.

But, the bad news seems to be, that many pharma players, especially in India, can’t possibly quite fathom, just yet, the profound impact of the changing customer profile. With the hype of ‘digital marketing’ and associated cacophony, most of them seem to be focusing on automation of various processes with digital tools, rather than a customer-centric pan-organization digitalization of business. In this article, I shall dwell on the relevance of such intervention in the pharma marketing model, including the processes, before it’s too late for an organization.

The reality – profile of pharma consumers is changing:

It is well documented today that the profile of pharma consumers is changing. There are several studies in this area. For example, the McKenzie paper of November 2014, titled “A digital prescription for pharma companies,” penned some important observations in this regard, as follows:

  • Consumers in the healthcare sector are becoming more informed, empowered, and demanding.
  • The vast majority of connected patients using an array of digital tools, to take control of their health and the health care services they access and buy.
  • Over 70 percent of patients who are online in the United States use the Internet to find healthcare information, and around 40 percent of people who diagnosed their condition through online research had it confirmed by a physician.
  • Patients equip themselves with information about product safety, efficacy, cost comparison, quality indicators from websites and online communities.
  • The more healthcare data become digitally accessible, the more patients will use it to weigh—and potentially reject—expensive health care treatments, as is particularly true in the United States.
  • These patients are demanding more information, so they can apply the same cost-benefit analysis and research techniques they use to purchase cars or phones when they purchase health care.
  • They are also making more informed, rational choices about where they put their money.
  • If pharma companies do not join the digital dialogue and influence the conversation, they will lose an opportunity to shape it, and they may be put on the defensive trying to refute the statements made by those that do take part.

In this evolving scenario, the expectations of pharma customers even in India, are also changing. It may not be as fast as in the United States, but certainly can’t be ignored in any way, for long term business success. Thus, I reckon, it would be futile to keep the basic process of business as tradition-bound as it has always been, of course, with some interesting tweaking here or there.

When everybody talks about digital intervention, what it is really?

To effect this desired change, all concerned are now talking about ‘digitalization’. It has already become a buzz word and is often considered as a ‘magic wand’ by many enthusiasts. There is nothing wrong in this hype, provided this process is properly understood. I tried to explain it in my article, published in this Blog on January 2018. Are we missing wood for the tree? Let me start with the current ‘digitalization’ focus of pharma marketing in this area, particularly in India – as I see it.

Where’s the current focus on ‘digitalization’ in pharma marketing?

Generally, the pharma marketing focus broadly covers two different categories:

A. Push marketing 

B. Pull marketing

A. Push marketing: 

In my view, ‘push marketing’ involves targeting physicians through Medical Representatives and other means, including several contentious ones. These ensure that the doctors “push” the identified pharma brands of the company while writing prescriptions for patients. Some experts call it an ‘inside out’ and brand focused strategy of the industry players to drive sales.

Many companies are taking major digital steps to introduce automation in this area, which are not transformative, but incremental and aimed at improving productivity. Such drive encompasses many areas of a pharma organization, including the field staff related functions. For example, replacing usage of paper-based items, such as detailing folders or reporting material, with algorithm-based digital tablet devices. These reforms help answer customer questions promptly, besides almost real-time entry of accurate doctors’ call related data into a remote computer server for continuous analysis and feedback.

Automation of such types may free enough time of the field staff for greater customer contacts in different ways, but may not be considered as digitalization of the organization. Moreover, these are not transformative in nature either, as the overall process of doing business remains the same.

Nonetheless, process automation and its re-engineering add significant, but incremental value to the business, as the organization continues to maintain similar ‘inside-out’ focus on brands. The re-engineered processes also become faster and more accurate to help improve productivity. However, patients’ knowledge-base, needs, demands, values and aspiration keep changing fast, which just process automation can’t leverage to excel in business.

B. Pull marketing: 

Unlike ‘push marketing’, ‘pull marketing’ targeting pharma consumers who are increasingly becoming more informed and want to get involved in their treatment decision making process, including selection of a drug. The evolving trend suggests, to succeed in business, pharma players would require focusing more on patients, using various digital tools and platforms of engagement, in different ways.

To make this process meaningful, it is essential for a drug company to venture into mapping the patient’s journey from end-to-end for a specific disease or a set of diseases. This means capturing real-life data right from the time patients feel the need for a medical intervention, through the search for the right treatment, to effective disease management or cure, including follow-up, if any. Thus, mapping this arduous and complex odyssey would demand application of state-of-the-art digital tools.

Thereafter, equally sophisticated measures structured on digital platforms and formulated accordingly, require to be and implemented on the ground. It then becomes the ground-rock to transform the company’s focus – ‘through brands to patients’ to – ‘through patients to brands.’ Dovetailing this new marketing concept to a pan-organization initiative will call for new insight and wherewithal of the right kind.

When implemented by the right kind of people, this approach will encouragepatients to “pull” the demand of the selected brands, as they participate along with doctors in the drug selection part of the entire treatment process. The informed patients won’t hesitate posing questions to doctors – why ‘this’ drug is being prescribed and why not ‘that’ drug?’ The doctor would require responding with convincing answers in that situation. Some experts have termed this process as – an ‘outside in’ strategy.

Difference in impact – one ‘Incremental’, the other ‘transformative’:

It’s important to reiterate that the impact of digitalization for an ‘inside-out push strategy’, is generally incremental. Whereas, the same for ‘outside-in pull strategy’ is expected to be transformative in nature, not just in the business performance, but also the way pharma business is viewed and conducted as on date, especially in India.

Conclusion:

As I understand, process automation may be based on digital platforms and even with the application of Artificial Intelligence (AI) or robotics, the overall business process remains unchanged. It brings greater efficiency in the same business processes, improving employee productivity, and usually adds incremental success to brand performance.

Whereas, digitalization helps create a new way of achieving excellence – gaining a new insight for the business. This happens, first through generation, and then detail analysis of an enormous amount of relevant customer-centric data. Effective interpretation and use of the same, help transform the business – giving shape to new business processes for organizational distinction.

Simply speaking, automation improves the business efficiency with its key focus on ‘pushing brand prescription demand’, as much as possible. Whereas, digitalization aims at business transformation for a long-term organizational effectiveness. It creates a new purpose for business based on changing customer profile, across the organization. A sharp focus on delivering research-based and well-targeted customer values help ‘pulling brand prescription demand’, the decision of which is often jointly taken by the doctors and the patients or will happen that way even in India, sooner than later.

In this perspective, what we see in pharma marketing, generally in India, is automation of various types, of course, by using digital tools, platforms and even AI, in some cases. There isn’t anything wrong in that. But, digitization would call for much more. First, the core organizational focus to shift from being ‘brand-centric’ to ‘customer-centric’ for financial achievements, and then effectively delivering customer values through each ‘company-brand-customer interface’ and beyond that. This is essential for sustainable excellence of pharma players in the digital age.

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.

Creating ‘Shared Value’ in Pharma – The Way Forward

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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 

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.

Blockchain: A Game Changer For Safe Medicines

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‘Your medicine box may have fake drugs’ was the March 18, 2018 headline of a popular pan Indian news daily. Just the year before, the 2017 report of the World Health Organization (WHO), also flagged that around 10.5 percent of all medicines in low-and middle-income countries, including India are substandard or fake. Even prior to this, another news headline of February 15, 2016 highlighted: ‘1 In 7 Indian Drugs Revealed As Substandard.’ These reports paint a scary situation for consumers of medicine in India, especially when the same incidence is just around one percent in the high-income countries of the world. Nevertheless, getting into a protracted discussion to prove the veracity of this issue, may not yield much, either. Some may even term these as efforts to ‘sensationalizing’ the situation.

That said, the good news is, the Government Think Tank Niti Aayog and also the Drug Technical Advisory Board (DTAB) of India,are reportedly contemplating to combat this menace with cutting-edge technology. In this article, I shall dwell on this threat, starting with its profound impact, not just on human health, but also on the economic and the socioeconomic space of India.

Why is it so important?

The most obvious fallout of this hazard is of course borne by the consuming patient.  The other two critical impact areas has also been well captured by the World Health Organization (WHO) in its 2017 study, titled ‘A study on the public health and socioeconomic impact of substandard and falsified medical products’. I am summarizing those 3 key impact areas hereunder:

A. Health impact: 

  • Adverse effects (for example, toxicity or lack of efficacy) from incorrect active ingredients
  • Failure to cure or prevent future disease, increasing mortality, morbidity and the prevalence of disease
  • Progression of antimicrobial resistance and drug-resistant infections, loss of confidence in health care professionals, health programs and health systems

B. Economic impact:

  • Increased out-of-pocket and health system spending on health care
  • Economic loss for patients, their families, health systems and manufacturers (and other actors in the supply chain) of quality medical products
  • Waste of human effort and financial outlay across the health system, further straining resources, staff and infrastructure
  • Increased burden for health care professionals, national medicine regulatory authorities, law enforcement and criminal justice systems.

C. Socioeconomic impact:

  • Lost income due to prolonged illness or death
  • Lost productivity costs to patients and households when seeking additional medical care, the effects of which are felt by businesses and the wider economy
  • Lack of social mobility and increased poverty

What the Government contemplates in India? 

According to the April 09, 2018 news report, “Indian policy think tank Niti Aayog is working to put the entire inventory of drugs made and consumed in the country on blockchain with an intent to crack down on counterfeit and spurious drugs, according to two government sources. The government wants to complete a proof of concept (PoC) solution by the year-end and begin implementation in 2019.”

On May 16, 2018, DTAB reportedly deliberated and approved a Track and Trace mechanism to address this issue. The proposal is a stand-alone measure to combat fake or counterfeit drugs covering 300 pharma products. However, it does not intend to cover the entire drug supply chain integrity with Blockchain technology, in a comprehensive manner.

According to the above report, this particular approach involves asking the pharma manufacturers to print a unique 14-digit alphanumeric code on the package of the drug. While buying any medicine, the individual can inquire via a text message, whether the drug bearing that code is genuine or not.

I wrote an article in this Blog on the use Blockchain by pharma players, on January 22, 2018. You may wish to refer that to know more about it in context of the pharma industry.

Recent Blockchain initiatives by global pharma majors:

Some global pharma layers have already covered some ground with Blockchain, especially in this area.On September 21, 2017, an article titled ‘Big Pharma Turns to Blockchain to Track Meds’, published in Fortune, presented some interesting facts. It indicated: to stop a flow of fake, spurious or counterfeit medicines entering the supply chain and reaching patientshow the pharma industry appears to be on the verge of resolving this long-time problem with the intervention of one of the most modern technology – Blockchain.

A group of companies, including Genentech and Pfizer has announced the MediLedger Project for creating blockchain tools to manage pharmaceutical supply chains. The group, has completed a successful pilot program to track medicines, where all concerned – from drug manufacturers to wholesalers to hospitals and retailers will be recording drug deliveries on a blockchain. This would ensure that, at each step of the distribution process, a network of computers will vouch for the ‘provenance and authenticity’ of a drug shipment—making it virtually impossible for counterfeiters to introduce fake drugs – the article highlighted.

Quoting domain experts, the authors underscored the key difference between current practices in this area and managing supply chain through Blockchain technology. At present, most companies use various software to manage the supply chain. However, these usually consist of a mishmash of different databases. ‘The introduction of a Blockchain system, in which each participant controls a node on the network, and transactions require a consensus, is thus a significant leap forward’ – the experts noted.

On scaling up, if this project achieves the intended goals, it would possibly be a game changer for the pharma companies in addressing the counterfeit or fake drug menace, effectively.

How will Blockchain combat fake or counterfeit drugs?

In India, there are basically four constituents in the pharma supply chain: source of procurement of various ingredients – manufacturers – C&F Agents – wholesalers – retailers, besides hospitals and dispensaries. To avoid counterfeit or fake/spurious drugs in a comprehensive way, it is critical for these constituents to see and share relevant data based on a modern and tamper-proof technology platform. Unfortunately, the current practices mostly fail to address this serious threat in a holistic way.

Experts envisage Blockchain delivering a superior value in this area, as it has the potential to cover end-to-end supply chain network of a pharma business. A November 14, 2017 article appeared in a Harvard Business School publication of Technology and Operations Management (TOM) explains its rationale very well. The paper is titled “Can blockchain help solve the problem of counterfeit drugs?”

In the context of a supply chain it says, blockchain can be used to track the flow of goods and services between businesses and even across borders. At each step of the distribution process, a network of computers can unmistakably indicate the provenance and authenticity of a shipment, making it harder or counterfeiters to introduce fake drugs. The key advantage of this technological process is that

it is virtually impossible for malicious actors to alter the event logs. Another advantage is speed: should a shipment be disrupted or go missing, the data stored on the common ledger would provide a rapid way for all parties trace it, and determine who handled the shipment last, the author elaborates.

Common anti-counterfeit-measures:

In many countries, including India, drug regulators are focusing on putting in place various anti-counterfeit measures, such as, ‘track and trace’ and ‘mass serialization.’ In some nations these mandatory in nature. At present, the most common process, globally, is to have machine-readable codes carrying a serial number featuring on each and every pack of medicines. Many anti-counterfeit solution providers call these in various different names, to position themselves on a marketing high ground. Other such measures include, forensic markers, cloud-based supply chain data repositories are also being talked about.

So far so good, but the current reality continues to remain scary for patients, probably more in India. Each year ‘tens of thousands dying from $30 billion fake drug trade,’ – reported Reuters just recently – on November 28, 2017. As reported by IntelligentHQ on November 3, 2016, ‘studies have shown that the pharmaceutical industry still struggles on two main counts: interoperability between all the participants, from the manufacturer to the dispenser and data management, to better integrate the serialization systems. Being able to avoid drug counterfeiting is just one of the reasons for which it is so critical to successfully track products down the supply chain.’

Conclusion:

Ensuring safety and security of the pharma supply chain – from sourcing to manufacturing to logistics to retail chemist and ultimately to the final consumer, is now possible with the application of Blockchain. In fact, this process has already been developed, and tried in many continents of the world, including Africa (video).

Thus, in my view, for an effective anti-counterfeiting system to work or even a substandard drug ingredient going into any original final product that ultimately will be consumed by patients, the most important requirement is to ensureend-to-end supply chain visibility and integrity.Any stand-alone anti-counterfeit measure can’t possibly provide such holistic solution.

Just to emphasize on this point – what happens, if anything goes wrong during sourcing of ingredients, or during the manufacturing of the original drug? The drug in question, although could be substandard, can’t be termed counterfeit. Hence, any standalone anti-counterfeit mechanism will obviously indicate ‘all is well’ for the patients to consume this original medicine – before the product is ultimately recalled, if and when the defect is detected by other means.

From this perspective, the application of Blockchain technology covering end-to-end supply chain network has the wherewithal of being a game changer – offering safe medicines to patients.

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.

Pharma Brand Building: Criticality of Enhancing End-To-End Customer Experience

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In today’s fast-changing world, the types of medicines being developed, the way technology contributes to health, and how the value of health care is calculated, are all undergoing a metamorphosis. A wave of cell and gene therapies are bending the definition of what constitutes a drug, both clinically, and in terms of expectations of outcomes, duration of treatment and costs. Global health is poised to meet a series of key turning points, and changes seen in 2018 will mark the key inflections that drive the outlook for the next five years and beyond.

These are examples of key observations, as captured in the March 13, 2018 research report, titled: “2018 and Beyond: Outlook and Turning Points,” of the IQVIA Institute (previously IMS Institute). Arising out of these, the report envisages the following key impacts on the pharma industry in the next five years – from 2018 to 2022:

  • Patent expiry impact will be 37 percent larger than the prior five years, including both small molecule and biologics.
  • New medicines’ growth will be slower in 2018 – 2022 than the period from 2013 -2017.
  • Net price levels for branded drugs will rise modestly in the United States at 2–5% per year but will fall in other developed markets.
  • Volume for existing branded and generic medicines will remain slow, with the ongoing shifts towards newer medicines over time.
  • To increase access to medicinesGovernment and other payers to focus on addressing outstanding healthcare disparities or to invest in approaches to address system inefficiencies.

Such a situation, would obviously impede performance and productivity of many pharma players – both research-based and also the generic ones, across the world, including India. Against this backdrop, I shall discuss about the criticality of ‘enhancing end-to-end customer experience’ in pharma brand building exercise. The words to specially take note of are – ‘end-to-end customer experience’ and not just in some ‘touchpoints’. This would help many pharma players to navigate through this strong headwind to remain in the organizational growth trajectory.

Not a solitary finding:

Another series of articles from Bain & Company, published on June 30, 2015, May 25, 2017, May 09 and May 23, 2018, not just reflect similar core concern, as articulated in the IQVIA article. Moreover, the barriers to deliver growth from the in-market portfolios being tough, many drug companies are using even steep price increases as a key lever to achieve their financial goals. It continues to happen, despite strong criticisms both from the public and some powerful governments, such as the United States and also India, further denting industry’s public reputation.

Pharma sales reps no longer a primary learning resource about medicines?

It also came out clearly from some of these articles that ‘doctors in many developed countries have been moving away from pharma sales representatives as a primary resource for learning about medicines.’ It’s just a matter of time, I reckon, similar situation will prevail in India. So, what do the pharma organizations do now – wait for a similar situation to arise and then act, or initiate a proactive strategic marketing process, as soon as possible?

Enhancing customer experience in pharma brand building:

To mitigate this, a new concept for improving market share is gaining ground. It suggests, the intrinsic value of a brand, and its value delivery system should enhance the customer experience during the entire treatment process with the drug. Achieving this would prompt widely capturing and in-depth analysis of targeted customer expectations, preferences and aversions. Just listening to a patient or a doctor won’t suffice, any longer, for a pharma company to succeed in business.

The February 24, 2017 article, titled “The Case For Managing By Customer Episode,” published in Forbes very aptly said, ‘companies that once relied on developing new product features and improving customer service increasingly see competitive advantage rooted in the entire experience that’s wrapped around the product.’

The same point has been corroborated in several research studies, since the last few years. For example, a 2014 survey by McKinsey & Company came out with some interesting findings. It highlighted, by optimizing customer experience at every ‘touchpoint’ – ensuring a reasonably seamless customer journey, a company can potentially increase its revenue by up to 15 percent and lower the customer service costs by 20 percent.

Another research article dated May 23, 2018, titled ‘Why “Episodes” Matter for Doctors’, published in the Pharmaceutical Executive finds that about 40 percent of a doctor’s drug recommendations are linked to how effectively a firm delivers an overall experience, as distinct from product-related attributes such as clinical data. This share rises to about 60 percent for factors within the control of the commercial organization. Doctors who give high marks for their experience with a company, are between 2.3 and 2.7 times more likely to prescribe the company’s products as those who give low marks.The authors further highlighted, loyalty scores run low, both for the average firm and for many individual episodes for the pharma industry as a whole. That’s because firms have focused mostly on pushing out sales and marketing messages through as many channels as possible.

Units of ‘customer experience’ management:

Different publications acknowledge the need to have some key unit for managing customer experience. These units are described in different names by different experts, such as ‘episode’ or ‘touchpoint’.

Bain & Company said, each ‘Episode’ covers all tasks that a customer requires to complete for fulfilling a need. For each unit of ‘episode’, the clock starts as a customer feels and identifies a related need and ends when these are met with his/her full satisfaction. ‘The sum of a customer’s episodes over time comprise the entire experience of dealing with the company.’ So far as ‘Touchpoints’ are concerned, according to  McKinsey & Company, these are the individual transactions through which customers interact with parts of the business and its offerings. It reflects organization’s accountability and is relatively easy to build into operations.

Difference between ‘episode’ and ‘touchpoint’ in ‘customer experience’ management:

There is a difference between ‘episodes’ and ‘touchpoints’. Whereas ‘touchpoints’ are each point of contact or interaction, between a business and its customers,‘episodes’ focus on end-to-end design of a specific customer-need of an organization, as they align management and the front line around the customer experience.

Many companies believe that customers will be happy with the interaction when they connect with their product, customer service, sales staff, or marketing materials. However, McKinsey found that this siloed focus on individual touchpoints misses the bigger, and more important picture: the customer’s end-to-end experience or the ‘customer journey.’ It includes many things that happen before, during, and after the experience of a product or service. The companies providing the customer with the best experience from start to finish along the journey can expect to enhance customer satisfaction, improve sales and retention, reduce end-to-end service cost, and strengthen employee satisfaction.

Thus, only by looking at the customer’s experience through his or her own eyes, throughout the entire journey taken – a company can begin to understand how to meaningfully improve its performance.

Focus areas to create an exemplary customer experience:

According to Bain & Company there are 5 imperatives to focus on to create an exemplary customer experience, which I summarize, as follows:

  • Examine the experience from the outside in – from the customer’s point of view, not the organization’s structure and processes.
  • Meet customer expectations consistently.
  • Invest to provide outstanding experiences in the areas that have the greatest impact on customer advocacy.
  • Use rapid prototypes to deliver new services to customers.
  • Develop closed-loop feedback processes, continuously refining experiences to match or exceed ever-rising customer expectations.

Conclusion:

The mediocre performance of the pharma industry, especially, since the last few years, is bothering many stakeholders.The challenges to deliver business growth from in-market portfolios, coupled with frequent backlashes for using steep product price increase as a key lever to achieve financial goals, are some of the key causal factors.

Enhancing ‘customer experience’ in the process of pharma brand building initiatives, has also caught the imagination of some players. This is commendable. Nonetheless, several research studies indicate, if these are focused on individual customer-‘touchpoint’ based strategies, which, I reckon, is rather common, the outcome may remain quite far from expectations.

What really matters, is enhancing end-to-end experience with a brand – throughout a patient’s journey for disease prevention or effective treatment or even cure. This may, for example, begin with the search for effective and affordable treatment options – participating in arriving at the right treatment – prescription of right drugs, and finally receiving continuous requisite guidance throughout the course of treatment for better management of the disease or effective cure. Thus, pharma brand building by enhancing end-to-end ‘customer experience’, now assumes a critical strategic dimension.

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.

‘Diversity And Inclusion’: A Missing Link For Indian Pharma

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Inadequate access to affordable health care to a vast majority of the population has been a favorite topic of debate, since long, globally. This discourse is generally centered around the least developed and the developing world, such as India. However, in the recent time, the reverberations of the same can be heard even from the most developed countries, like the United States.

Possible solutions in this area generally encompass several tangible issues, e.g. high cost of drugs and care, alleged unethical practices of the providers, infrastructure bottlenecks – to name a few. Curiously, despite the availability of an increasing number of innovative drugs, state of the art facilities and diagnostics, brilliant healthcare professionals and so on, disparities in the degree of access to all these, between different members of the civil society, keep steadily mounting.

This cascading socioeconomic issue, creating a widening the trust deficit, especially on pharma, throws a critical management challenge for long term sustainability of business, if not survival too.

Transformation to a customer-oriented, profit-making organization:

Building a profit-making organization is not an easy task. However, transforming a profit-making organization to a profit making through customer-centric policies, is several times more challenging. That’s because, making a true external customer-centric organization gets kick started from a significant cultural change within the organization. Systematically creating a pool of requisite internal customers (employees), with diverse background, experience, gender, belief, perspective, talent and, more importantly, ably supported by the organizational vision of inclusion, forms the nerve center of this transformative process. No doubt, why the quality of ‘Diversity and Inclusion (DI)’ culture of an organization is assuming the importance of a differential success factor in business excellence.

The August 25, 2016 E&Y article, titled “Embracing customer experience in the pharmaceutical industry” epitomizes its relevance by articulating: “It is the companies that focus on continuously delivering a better customer experience to build a trusted and transparent relationship over time that will win in the market. They will not only acquire customers that will remain loyal, but also win advocates that will refer the company or brand to more customers.”

The missing link:

It is now being widely established that creating a culture of ‘Diversity and Inclusion (DI)’ across the organization, is of critical importance to maintain sustainable business excellence, with a win-win outcome. Going a step forward, I reckon, although, this is an arduous task for any organization, but an essential one – even for long-term survival of a business. However, today, the very concept of DI is apparently a ‘missing link’ in the chain of sustainable organizational-building initiatives, particularly for most Indian pharma companies.

The role of DI in making a customer-centric business:

Health care customers, like many others, are generally of diverse backgrounds, financial status, ethnicity, gender, health care needs, expectations, and also in their overall perspective. Thus, to make a customer-centric organization for greater market success, and drive product and service innovation accordingly, pharma companies need to deeply understand them, empathetically. A competent pool of well-selected employees with diverse backgrounds, race, ethnicity, gender, perspectives, could facilitate this process, more effectively. However, the company should also create an environment and culture of inclusion for all to listen to each other’s well-reasoned views – expressed uninhibited and fearlessly for this purpose.

In making this process more effective to add a huge tangible and intangible worth to the business, pharma players need to untether the employee potential through empowerment, making them feel valued and grow. This would also help immensely in charting newer pathways of all-round success in many other high-voltage complexities of pharma business.

‘Why diversity matters’?

That diversity within an organization matters in several ways, has been established in several studies. For example, the February 2015 article, titled “Why diversity matters”, of McKinsey & Company says, “More diverse companies are better able to win top talent, and improve their customer orientation, employee satisfaction, and decision making, leading to a virtuous cycle of increasing returns.” The analysis found a statistically significant relationship between a more diverse leadership team and better financial performance (measured as average EBIT 2010–2013).

Why is inclusion so important?

In a large number of organizations that include Indian pharma, senior management staffs generally seem to appreciate hearing more of what they want to hear. This culture quickly percolates top-down – encompassing the entire company, probably with a few exceptions. Personal ‘likes’ and ‘dislikes’ of various nature and degree spread wings within many organizations. Such a situation is created from intrinsic apathy to patiently listen to and accept another employee’s viewpoint – even on critical customer-centric issues. Employees, in that process, also get branded as ‘argumentative’ and often ‘disloyal’, if not a ‘socialist’. The major decisions often get biased accordingly – sometimes unknowingly.

Whereas, inclusion entails empowerment and close involvement of a diverse pool of employees with dignity, by recognizing their intrinsic worth and value. Moving towards a culture of inclusion would require creation of an organizational desire to communicate professionally and learn how to listen to each other’s well-thought-through arguments with interest.

The business should accept that it is not really important in getting along with everybody on all issues – every time. Neither, does it make sense for professionals to develop personal ‘likes’ or ‘dislikes’ on other fellow colleagues, based on issue-based differences, while finding out ways and means to improve organizational performance, image or reputation. Inclusion helps employees to learn to work closely, despite personal differences on all important issues.

Has Global pharma industry started imbibing DI?

Yes, many global pharma majors, such as, GSK, Novartis and Merck and several others, have started practicing DI as a way of organizational life and culture. Some of them like GSK India has put it on its country website. But, generally in India, the scenario is not quite similar. Though, many head honchos in the country talk about DI, the February 16, 2017 edition of Bloomberg/Quint carried a headline “Most Indian Companies Do Not Value Diversity At Board-Level Hirings,” quoting Oxfam India.

A voluntary survey of ‘company diversity’ conducted by US-based DiversityInc at Princeton, ranks the companies on four key areas of diversity management: talent pipeline, equitable talent development, CEO/leadership commitment, and supplier diversity. It revealed an interesting fact in its 2016 study. The survey reported, while diversity continues to improve in the overall perspective, its ‘Pharma 50’, as a group, ‘is right in the middle of the industry pack when benchmarked against the Fortune 500.’  The survey also brought to light significant differences in the levels of gender, national, and ethnic diversity even at the company boards and executive committees of individual companies. Nonetheless, some global pharma entities are taking significant steps in this direction. But, these are still early days in many organizations.

Conclusion:

The E&Y article quoted above, also says that pharma “customers are becoming resistant to push sales and marketing, and are instead preferring to relate to the overall experience provided in their pull interactions with the company. The customer experience will be the next battleground for the pharmaceutical industry. The deployment of a customer experience capability is a transformational journey in often unchartered territories. The key to success is to start early and drive a process that is both rigorous and iterative, allowing the organization – and its customers – to learn along the way and always to be ready with the next best action in place.” DI, I reckon, plays a critical role in attaining this goal.

Pharma companies are also realizing that building a profit-making organization with blockbuster high-priced, high-profit making molecules, such as Sovaldi is possible, but this may not be sustainable. It isn’t an easy task either, not anymore. There lies the urgency of transforming a profit-making organization to a profit making through customer-centric business entity. This process, I repeat, is several times more challenging, but the business success is much more sustainable.

Organizational transformation of this nature is prompting the global pharma majors to use Diversity and Inclusion (D&I) while achieving their key financial and people goals. Both D (Diversity) and I (inclusion) work in tandem for taking any fairness-based organizational decisions, irrespective of whether it’s staff or customer decision.

DI has the potential to help an organization to create and chart new and more productive pathways almost in all functions within the company – right from R&D, communication, service delivery to market access. In all these initiatives, customer focus to occupy the center stage – for a win-win outcome – significantly reducing the degree of difficulty for access to affordable medicines. DI is not a panacea to mitigate this problem totally, but would help significantly, nonetheless – with the help of employees with diverse background but having fresh eyes. Many global pharma majors have initiated action in this direction. However, in Indian pharma business generally, DI still remains a missing link, as it is seen today.

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.

Increasing Consumerism: A Prime Mover For Change in Healthcare

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Increasing ‘consumerism’ has already become a strong prime mover to reckon with, even in healthcare, including the pharma industry, across the world. Patients’ longing for better participative treatment experience at an affordable cost, has started gathering momentum as a major disrupting force in the healthcare space of India, as well.

In this article, which discusses a different topic from what I said in my last article that I will write this week, let us try to fathom today’s reality in a fast expanding area, primarily by connecting the emerging dots, both globally and locally. However, before doing so, it won’t be a bad idea to recapitulate, in the general term, what exactly is ‘consumerism’ – and then looking at it in context of healthcare.

What it really means?

The Oxford dictionary defines ‘consumerism’ as: ‘The protection or promotion of the interests of consumers.’ As an example, it says, ‘The impact of consumerism emerges as a factor of stabilization, as do the different understandings of stability and stabilization.’ Whereas, consumerism in healthcare is an assertion of patients’ right to be a key participant in their healthcare decision making process. As aptly put by Healthcare Success: “It is a movement from the ‘doctor says/patient does’ model, to a ‘working partnership’ model.”

Should pharma strategic marketing process, not take care of it?

When the above question is asked differently as: If the pharma strategic marketing process is effective, why is healthcare consumerism increasing across the world, including India? To find an answer to this, let’s go the basic of the definition of ‘marketing’. American Marketing Association (AMA) defines it as: ‘‘Marketing is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large.’ A more specific definition of pharma marketing (Olszewska A. Strategic management in pharmaceutical marketing. Chemik 2006: S91-4.)is: ‘A management process that serves to identify and meet patients’ needs in a profitable way.’

This prompts the key question, if the above basic process of ‘marketing’ is followed by the pharma industry as it ought to be, why should there be an increasing trend of ‘consumerism’ in Healthcare, in general, and the pharma industry in particular?

The major drivers:

NRC Health through various surveys, has captured the major drivers of consumerism in healthcare. I am listing below a few of those, as I understand, just as examples:

  • Significant increase in health care cost to payers, including the patients.
  • Consumers are the fastest growing payer in the industry.
  • They foot most costs of their health premiums and out-of-pocket co-pays.
  • As consumers have more money at risk, they want to get more engaged with their own treatment decision for the best value for money.
  • One-way monologue for treatment doesn’t not enough for most patients.
  • 3 of 10 patients defer necessary treatment to avoid self-confusion and expense.
  • 4 out of 5 find difficult to compare costs Vs. drug quality.
  • 3 out of 4 feel their health care decisions are the most important and expensive
  • Patients face difficulty to compare cost, quality, and access to physicians.

In my view, sooner than later, the emerging situation in India will also be no different, especially with its increasing digitally empowered population.

Is pharma marketer cognizant of this emerging trend?

It will be unfair to make any sweeping statement that they are not. This is based on what I see and experience around, mostly in the global arena. But locally, although significant publicity of a large number of pharma training programs appear in the social media, most of these are apparently based on the ‘buzz of the time’.

Besides a few sporadic exceptions, generally the Indian pharma marketers still appear to believe in the same age-old model – what the ‘doctor says/patient does’. As a result, increasing consumerism keep haunting the industry – the Government often responds – mostly with sound bites, though, the industry keeps lamenting on the ‘ease of doing business’ or the lack of it, in India. The much avoidable cycle continues.

A prime mover for change in healthcare:

Increasing health care consumerism is a prime mover to usher in significant changes in this space. These changes are mostly unexpected and disruptive, but usually good for the patients. I shall illustrate this point here with just two examples, out of many. The first one comes from three global corporate head honchos of unrelated business, aimed at their own employees. And the other is related to all patients with the initiative coming from within the healthcare industry, including pharma.

The first example of an unexpected move comes from the announcement of three corporate behemoths – Amazon, Berkshire Hathaway and JPMorgan Chase, saying they would form an independent health care company for their employees in the United States. This was reported by The New York Times (NYT) on January 30, 2018. The alliance signals how frustrated American businesses are not just with their health care system, but also rapidly spiraling cost of medical treatment – the report said. The NYT also quoted Warren E. Buffett of Berkshire Hathaway as saying:“The ballooning costs of health care act as a hungry tapeworm on the American economy.”

The initial focus of the new venture, as announced, will be on “technology solutions” that will provide U.S. employees and their families with “simplified, high-quality and transparent healthcare at a reasonable cost.”  They also plan to “bring their scale and complementary expertise to this long-term effort.Nevertheless, it is unclear how extensively the three partners would overhaul their employees’ existing health coverage to reduce healthcare cost and improving outcomes for patients. They may simply help workers find a local doctor, steer employees to online medical advice or use their muscle to negotiate lower prices for drugs and procedures. While the alliance will apply only to their employees, these corporations are so closely watched that whatever successes they have could become models for other businesses – NYT commented.

The second examplecomes from an article, titled ‘Consumerism in Health Care’, published in NEJM Catalyst on January 11, 2018. It says, another important change that is a direct outcome of the consumerism of health care is personalization of care to facilitate health outcomes. However, ultimate personalization, that is, a “one-to-one relationship” between a company and an individual appear increasingly possible with the data and analytics that are now within the reach of many global pharma players, the paper says. However, most Indian pharma players, I reckon, still lack wherewithal that’s required to build capabilities to deliver high degree of personalization for patients.

As a result, pharma industry, in general, is still charting in the primary stages of delivering personalization, although, progress made by some global players in this direction is quite encouraging.

Consumerism in healthcare to gather momentum in India:

A September 2016 paper, titled ‘Re-engineering Indian health care’, published jointly by FICCI and EY points to this direction. The results of their survey done as a part of this study indicates, the aspirations of the middle and upper classes are evolving and their demands for convenience, participation and transparency in the health care delivery process are indicative of the shift from being a docile patient to an informed “health consumer.”

Thus, it is irrefutable today that digitally empowered patients are fast increasing, even in India. This is fueled by rapid expansion of broadband Internet in the country – a bottomless source of information. In this scenario, would the general pharma marketing assumption in India - what the ‘doctor says/patient does’, still yield results? Indian pharma marketers may need to possibly do some crystal gazing in this area – sooner the better.

Conclusion:

Accepting the reality of increasing consumerism in the healthcare space, both globally and locally, pharma players, especially in India, need to clear all clutter in the pathway to reach out and directly interact with their end-customers – the patients, aiming at improving clinical outcomes, the way patients would want – individually or in a cluster.

In a nutshell, what do patients want through increasing consumerism: Personal and meaningful involvement in their healthcare decision making process, based on requisite credible information from independent expert sources. Thus, what pharma the players should gear up to be: Cultivating a truly patient-centric approach in their business. And, there lies the real challenge for many in the industry, as it will mean all marketing and related organizational decisions will revolve around in-depth understanding of the patient’s mindset, along with their associated needs, want and health aspirations.

While moving towards this direction, providing personalized care by leveraging optimally selected modern technological platforms, will be a cutting-edge tool for pharma business excellence and achieving sustainable all-round growth – over a long period of time. As I see it, increasing consumerism will continue to remain a prime mover for unexpected, but welcoming changes in the healthcare space, at least for a medium term. It is to be taken rather seriously, with as much care as it deserves.

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.