I will admit it. I love the title of this Farnam Street blog perhaps because I feel this is the biggest barrier to success for most companies in 2012. The blog discusses marketing at Apple when Steve Jobs was in charge and compares it with other companies. There are some very interesting points in the piece such as the fact that most companies don’t have the ability to think small. They have way too many processes in place and these complicate rather than simplify the decision making process. Creative thinking dies as it tries to maneuver its way through a system of multiple approvals. PowerPoint presentations become the endpoint rather than a tool for discussing new thoughts. Most companies can’t focus on critical matters and rely way too much on expert advice rather than using their own intuition. Although not written specifically for the pharmaceutical industry, I think you might agree there could be some relevance.
Take a look at the way drugs are priced. Companies set a price and then go on to discount wholesales, PBM’s, commercial insurers, government payers and others. They then have a mess of coupons and co-pay cards that give discounts to the patients who have to pay out of pocket for their medicines. There is a complex system of reports and payouts that result from this system, with mistakes potentially resulting in serious legal liabilities. Why don’t companies just set the right price to start with? The whole thing is nuts.
Look at the way representatives are used today. Even though a large percentage of doctors don’t see reps and those that do they will only spend a few seconds with them, the system works like it was 1985. Huge visual aids and computer details are produced by agencies just in case they get the ten minute sales call. Get real. Targeting lists are developed with no consideration of access. Data used to set targets are often questionable. Incentive compensation is paid, or not paid, for all kinds of things well beyond the control and influence of the representative.
In marketing when somebody has a good idea it has to go through a massive amount of scrutiny before it gets to the customer. There are tons of approvals needed by marketing management and procurement, medical, legal, regulatory and other reviewers and in some companies several others. The primary purpose of all of these reviews is to determine what is wrong with the idea, not make it better. Risk needs to be completely eliminated. And since everyone feels their job is to find something wrong, they definitely do. I would love to do a study of five ideas a product manager comes up with and see how they change from inception to execution and then see how long it takes the ideas to go from her head to the customer.
Things are insane in the industry. The concern is that when companies try to fix problems they inevitably just make them more complicated and more process oriented. Does any company have a team designed and compensated to simplify things? This environment has resulted in more legal settlements rather than fewer, sales forces that are less effective, a less innovative industry that is losing 85% of its business to generics and a persistent image problem. Perhaps we really need to go back to the basics and simplify what we do. We develop, manufacture and provide drugs that improve the health of the world. All the other stuff should not get in the way. Maybe it is insane thinking but we need to wake up and recognize so many of our problems are self-inflicted. The industry needs to get out of its own way. Insanely simple, huh?