Change or Die

Ok, I will admit the title is a little dramatic and is perhaps a lousy way to grab your attention.  On the other hand the phrase has been so overused over the last couple decades that it may no longer have the impact it once had.  The bigger concern for businesses is not that they will “die” if they don’t change, but rather they will plod along getting less than mediocre results year after year.  Without change great companies tend to move to the middle of the pack.  Other companies, who make the necessary changes, thrive at the expense of those who were once prosperous.  This change is difficult, if not impossible, and that is why new companies can enter a space and quickly produce incredible results while the established companies flounder.

The “change or die” phrase came to me from Deloitte’s piece on the 7 mega-trends that will impact healthcare this year.  Before looking at the link or continuing with this blog I challenge you to guess what those trends are from your perspective.  Think about the last business plan you wrote and determine roughly how much time went into that effort and what percent of the time was spent on these big issues.  How many of Deloitte’s trends did you have on your list?  What did they miss?  How does their list compare to the work of other consultants in this area?

Take six minutes and watch the video and pay particular attention to the slides being  shown during the talk.  I am sure everyone will be struck by different parts of the article but to me the most important points have to do with the changing demographics of the consumer and their low level of satisfaction with the overall system.  To me this signals that change is just beginning.  Consumers see the huge inefficiencies in the system and now that they are spending such a large portion of their income on healthcare they are beginning to push back.  There are several reasons 85% of all prescriptions are now filled with generics, but perhaps the most important is consumers refuse to pay more than a few dollars for their prescriptions.  They are no longer convinced that the extra costs for tier two products or tier three with all the vouchers is worth the effort.  Payers, providers and consumers all seem to now be on the same page.  The branded pharmaceutical industry needs to recognize this and begin to drive change if we are to thrive or even survive.

Perhaps a starting point for work with consumers would be to recognize that what has been used over the last decade or so has not worked for the vast majority of consumers.  People ridicule the DTC ads on television and still have a skewed image of our industry.  The massive amount of money spent on patient materials also has not seemed to change the view of consumers towards the industry, if the huge flight to generics is any indication.  How many times do we hear that the industry just takes drugs developed by the NIH or other government funded programs and just market them to make ridiculous profits?  How often do we hear jokes about the reps who all wear suits, drive fancy cars and use food to convince physicians to use expensive drugs?  How many people think the high cost of healthcare is driven by the overpriced pharmaceuticals?  These images need to change and it needs to happen in 2013.

The Harvard Business Review listed the 100 best CEO’s in the world this month and there were only three from pharmaceutical companies.  Can you guess which companies were represented?  Congratulations to Gilead, Allergan and Novo Nordisk as their CEO’s topped the group with all listed in the top 26!  What sets them apart?  My theory is they have an incredible understanding of and relationship with the patients who benefit from their products and an astute understanding of the markets in which they compete.  The challenging question might be where are all the other companies?  How bad do things need to get before real change is implemented?  Perhaps one of the mega-trends for 2013 needs to be the reemergence of the pharmaceutical industry!

This entry was posted in Uncategorized by admin. Bookmark the permalink.