Please login to the form below

Not currently logged in
Email:
Password:

Two thirds of EU and US pharma execs say business model 'is broken'

Survey finds industry's greatest challenges over the next two years will be downward pressure on pricing and healthcare budgets

A staggering 68 per cent of EU and US drug industry executives have concluded that the current pharmaceutical business model is broken.

That was the message from a survey by Booz & Co and National Analysts Worldwide, who collated data from more than 150 senior industry executives mostly with responsibility for a product portfolio or specific brand and with influence or responsibility for sales and marketing decisions.

Nearly a quarter of respondents (24 per cent) strongly agreed that the business model was broken and needs significant repair, while fewer than 10 per cent believe it is not broken, when questioned towards the end of last year.

The highest-rated challenge for the industry over the next two years was downward pressure on pricing and healthcare budgets, followed by the need to demonstrate cost-effectiveness, restrictive market access, increasing generic competition, decreasing access to physicians by salesforces, and the ability of patients to pay for treatment.

"The pharmaceutical industry is the eye of a hurricane of change," commented Danielle Rollmann, a partner in Booz & Co's global health practice.

"The sales and marketing model is being forced to move to one that is much more complex, [and] this is happening in an uncertain market with incredible pressure to reduce budgets," she added.

One strategy adopted in response the changing environment is a shift of salesforce attention away from their current focus on community physicians to key accounts, payers, hospitals and group purchasing organisations (GPOs).

The most dramatic changes in salesforce time and budget allocation was reported among those respondents who are convinced that the model is broken, according to the survey.

More than half of all those surveyed said they expected to rely more on innovative pricing strategies, collaboration with payer organisations, pharmacoeconomic studies and new service models, marking a continuing shift away from the traditional product detailing model in pharma.

While the survey shows that payer engagement is in the minds of these executives, however, it also reveals that in the majority of cases this does not occur in practice until after a product candidate has reached phase III.

Most respondents to the survey say they plan to spend more on all their target marketing activities, yet this is not aligned with what pharma is doing and needs to do at a company level," said Germany-based Booz & Co partner Rolf Fricker.

"The companies that focus, prioritise, and follow a coherent strategy will be the winners," he concluded.

22nd March 2012

Share

Featured jobs

Subscribe to our email news alerts

PMHub

Add my company
Nobull Communications

Switched on Creative Communications. With an encyclopedic working knowledge of pharmaceutical industry rules and regulations, we create dynamic, intuitive and...

Latest intelligence

artificial-intelligence-in-healthcare.jpg
Artificial Intelligence in Healthcare
Artificial intelligence is already out-diagnosing experts, but would you put a computer in charge of your healthcare? The good, the bad; we take a look....
World Pancreatic Cancer Day 2018: Combating misconceptions in pancreatic cancer
Patients diagnosed with pancreatic cancer face a dismal prognosis, with the disease having the lowest survival rate of all major cancers. In spite of this, pancreatic cancer research is chronically...
World Diabetes Day: Interaction and impact of diabetes on mental health
For World Diabetes Day on the 14th November 2018, Nisha Shahrukh - Medical Writer at Mednet Group has written an article depicting the impact diabetes has on mental health. Including...

Infographics