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Smart Thinking blog

Insights and expert advice on the key issues facing today’s pharma marketer

Burden of proof

The manifestation of responsible capitalism amidst a mini technological revolution and the most serious economic challenge for half a century – how are factors like these affecting how your products are received?

For the past few decades there has been a plethora of articles and speeches about change, change management and leading through change. How ironic that when real change is required, the preparation has not translated into practice.

It is one thing debating change when tomorrow is a slight variation of today; however when the pace of change picks up and the complexity increases management has struggled to keep up. Historically, the pace of change in the healthcare market had been so slow that the current pace is Tsunamic in proportion. The pharma and healthcare world we work in will never be the same again.

First, consider the pace with which we exploited all the low-hanging fruits, the so-called 'blockbusters'. For decades competition was based on bringing derivative medication (the me-too blockbusters) to market, which meant categories with seven variations but with little tangible differentiation. The authorities left the door open and we drove a bus through it.

Today the authorities are wide awake and, yes, perhaps guilty of overreaction to sins of the past. Nonetheless, today the value bar is much higher. The medical devices market has followed a similar trend to that of our drug-provider colleagues, with value claims on products frequently based on lightweight evidence. Today value is not in the making but in the proofing, and certainly the world of devices is coming to terms with the reality of evidence-based medicine. Creating value has never been so difficult.

As if product innovation and its introduction were not sufficient challenge, we are also in the midst of a mini technological revolution with the advent of social media, mobile technology and software intelligence – the world is without limits. Our products are assessed and reviewed in ways that we never imagined when these products were conceived.

And all this against a backdrop of the most serious economic challenge for half a century. Budgets are stretched and the old mantra of doing more for less has never been more pertinent. Today many pharma and healthcare companies are taking three over-riding, new initiatives: introducing premium and low-cost products; seeking ways of taking cost out of the healthcare system, and focusing more on emerging markets. The reason is simple, money is in short supply and to ignore this is to flirt with extinction.

Responsible capitalism
The changing characteristics of the economic, regulatory and healthcare environments are extensive but within these is one notable factor – the anti-capitalism/ethics' movement that has already manifested in attitudes towards bankers, politicians and other areas of top management.

The public seems to have discovered its 'ethical code' and they are now publicly aligning themselves with the concept of responsible capitalism. While the concept is poorly defined, the reality may have extreme repercussions for organisations that do not pay due attention to the volume and significance of the public cry for fairness.

In its true 'unspun' strategic context, these combined phenomena have effectively culminated in the destabilisation of the assumptions of the past 20 or 30 years, when pharma lived off a business model that took comfort in various demand-led projections that ultimately delivered what patients and healthcare providers needed. In essence, the healthcare consumer along with his growing healthcare expectations were phama's natural ally. But now the money has run out, and the biggest payers (ie, governments and insurance companies) are changing the rules of engagement and cutting costs everywhere – pensions, taxation, education, defence and, of course, in healthcare. In this new 'cost-benefit' world, the system has bitten back, and hard.

This destabilisation of the pharma industry is sadly compounded by the industry's lack of real wholesale change. There's been more of a selective, cautious refinement, with change much talked about but little acted through in corporate and operational behavioural terms. Visible examples of change now appear highly fractional and reactive in the new commercial, real-world context.

Fast track

  • In 2012 change is more crucial than a $50bn patent sales hit
  • NICE-style cost-effectiveness now has a bigger, global bite
  • EU countries are delaying payments as well as cutting back
  • The entrapment of reputational damage must be broken
  • A new radicalism of role and societal purpose is vital
  • Adaptive pharma can grow best via new collaborations

The repositioning of pharma
In this age of naked communication, of transparency and a virtual universality of voice at the fingertips of billions of individuals globally, in both developed and indeed developing markets, the old marketing adage may well apply. If you don't effectively position your business or brand, then others (your customers and competitors) will do it for you.

Of all the challenges faced, the new macro challenge of them all is what is the role, value and responsibility of the pharma industry in society in these times? The answer, when it comes, will define everything else: from R&D to marketing. 

Companies such as GlaxoSmithKiine – with Sir Andrew Witty pledging to reduce pricing in developing countries – are making the right overtures and, crucially, following it up with the boldness of action that would have been seen as not just revolutionary but corporate heresy if adopted 10 years ago.

So how do you, as the pharma marketer, cope with all these changes and still have time to focus on ethics, fairness, etc. The harsh reality is that when the dust settles there will be no dinosaurs left – that's a hard notion to contemplate in a land typically dominated by dinosaurs.

Importantly, there is coming about a general consensus on the change agenda, with most in pharma starting to agree that the level of change needed is far more all-embracing than whatever meaning we make of cliché phrases such as 'salesforce effectiveness', 'marketing excellence' and 'responding to the digital revolution'.

Many pharma companies are re-structuring their businesses from local to regional and global operations. We have finally concluded that we have more in common than we have differences across Europe. The efficiency gains and the improved capacity upon implementing a central strategy is just too tempting.

The former one-two strategy of delivering mass product to customers, driven by large salesforces (regardless of their 'effectiveness'), has come to an end. The industry is working to define its new options, while simultaneously coping with the side effects of its former salesforce-led strategy.

Everything from the pharma industry's structure, strategy, focus and definition of success has changed for ever. The world has started to flirt with an ill-defined 'responsible capitalism'. When the dust settles, where will we be in a brave new world, where only those who can and have adapted are fit enough to survive?

Article by
Baba Awopetu and Rob Benson

European marketing director at Leica Microsystems. He can be contacted at
Managing director of Stratleader Partners, an independent strategic consultancy. He can be contacted at

3rd May 2012


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