Changing marketing tactics
The physician-focused marketing practices that drove the industry's profits in the past have become increasingly less effective.
As more companies develop specialized therapies, a differentiated approach to sales and marketing is needed. Also, new rules
and regulations governing interactions with healthcare professionals and others will require pharmaceutical companies to change
long-accepted sales and marketing practices. New technologies such as machines that dispense drug samples in physician offices
will alter the nature of interactions between physicians and sales representatives (see Figure 2).
Figure 2: An intertwined value chain including pharmaceutical companies, payers, and healthcare providers.
The industry already has reduced by thousands the number of sales representatives in the US. A change in focus to improving
patient outcomes also will require sales and marketing teams to liaise more frequently and earlier in the product development
process with their company's R&D department. They will need to actively engage the capabilities of their health economics
function in the areas of pricing and reimbursement.
Collaborating on business models
As the industry moves toward broader collaboration with stakeholders, PricewaterhouseCoopers (PWC) sees two distinct business
models emerging (1).
A federated model.
Federations retain core functions such as intellectual property management, contracting, and information technology, in hub
organizations. These hubs rely on internal and external resources to provide a full range of healthcare services. Two variations
of the federated model are venture (based on a portfolio of investments and risk sharing) and virtual (a network of contractors
managed by a hub organization).
A fully diversified model.
A diversified company offering a full suite of healthcare products and services can give its business units a high degree
of independence to encourage innovation and spread risk.
To prepare for these collaborative business models, pharmaceutical companies must employ staff well versed in healthcare delivery
with skills to build brands, manage networks of external alliances, negotiate with governments and health insurers, liaise
with secondary-care specialists, and communicate with patients. These new skills and business models will position the industry
to revitalize R&D, serve emerging markets, and make the transition from a focus on medicines production to a focus on managing
outcomes. The pharmaceutical industry has a rare opportunity to redefine itself and to redeem its public image while sustaining
profitability. But industry must adapt to a brave new world of integrated healthcare delivery.
Anthony Farino is PricewaterhouseCoopers' US Pharmaceutical and Life Sciences Advisory Services leader, email@example.com
1. PWC, Pharma 2020: Challenging Business Models—Which Path Will You Take?, April 2009,