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How Do You Measure Patient-Focused Profitability?
Profitability by putting the patient at the center - is it really quantifiable?
Business realities are making it increasingly difficult for pharma companies to turn a profit. Research & Development has skyrocketed, government healthcare systems are cutting medicine prices in an effort to curb healthcare spending, some governments delay paying for medicines that pharma companies have already supplied, and robust sales of generic drugs are competing and undercutting profit just as much as the sale of fake drugs in the market.
With competition and regulations threatening pharma’s profitability, greater patient focus could be the answer, as demonstrated by The Aurora Project, a global benchmark survey led by the Chairman of eyeforpharma, Paul Simms, and Jill Donahue, author of "Engage Rx: The 3 Keys to Patient-Focused Growth." But how can you measure patient-focused profitability?
Being smarter with resources
According to Christi Shaw, former U.S. Country Head and President of Novartis Pharmaceuticals Corporation, patient focus is about “helping as many patients as possible” and “limiting spending to activities that help patients.” In other words, patient focus and profitability can go together if companies are smarter with their resources. By integrating the perspective of patients and delivering on their needs, companies can simultaneously satisfy their bottom line.
Donahue refers to the impeccable balance between patient-centric objectives and bottom line objectives as the “sweet spot.” According to the full report of The Aurora Project, Patient-Centric Profitability: Pharma’s Global Survey & Analysis, the sweet spot drives business growth and is characterized by high trust and better outcomes for all stakeholders. Describing the sweet spot is easy, but applying it to pharma’s business model is extremely challenging.
Bringing down the costs of mistrust
Companies that continue to use traditional models of measurement (i.e. sales, prescriptions, market share, etc.) are digging themselves an even deeper hole of mistrust. Shaw believes mistrust of pharma companies leads to a vicious cycle: “Mistrust leads to litigations, which leads to less money in other areas of patient focus such as clinical trials and patient advocacy.” When there is less money from having to settle and make litigation payouts, there will be fewer profits. Litigation may be a short-term expenditure, but the cost of defending pharma companies means so much more than just payouts. Mistrust among payers also creates market access hurdles for novel pharmaceutical innovations that improve and extend lives.
By increasing factors like trust, stakeholder engagement, and patient outcomes, I believe you are going to be increasing the sustainability of revenues over time.
On the other end of the spectrum, patient focus is a refreshing business model that has the potential to refurbish the reputation of pharma companies. Shaw explains that when pharma increases the percentage of earnings spent on activities that go directly to helping patients, the level of mistrust tends to decrease. She explains, “This loss of profitability due to mistrust should lead to developing and maintaining trust.”
Concrete measures for patient focus
Ramona Sequeira, President of Takeda Pharmaceuticals, proposes a divergent but equally exciting point of view. She says, “It is difficult to measure patient focus in a mathematical way in the short-term; the increase in revenues are a long-term outcome.”
At first glance, this seems contradictory to what Shaw asserts. However, as Sequeira further explains, it provides reason for hope and optimism. Sequeira believes that, “Overall, patient focus is inextricably linked to profitability in the longer term, although the correlation is more variable in the short-term.” She adds, “By increasing factors like trust, stakeholder engagement, and patient outcomes, I believe you are going to be increasing the sustainability of revenues over time.”
Essentially, pharma must utilize performance metrics that indicate whether organizations are improving with regards to meeting the unmet needs of patients. These metrics must somehow be linked with fi-nancial metrics.
According to The Aurora Project Whitepaper, some of the metrics that impact profitability include:
- Engagement – with patients, employees, and stakeholders
- Employee attraction/retention
- Trust – from patients, HCPs, and payers
- Patient outcomes
These metrics can be linked to current revenues and anticipated revenues.
Patient engagement boosts profitability in practical terms. For instance, helping as many patients as possible enroll in clinical trials decreases costs of research and development in the long-term. Often, clinical trials require the close monitoring of patients. When patients are required to attend trials during week-days, especially when patients are children, physically challenged individuals, or elderly, they will need to be accompanied by a family member. In order to be monitored, they will need to travel to the location where the clinical trial is being held, and this means that both the patient and the family caregiver will lose a few days of school or work.
In contrast, if activities are centered and focused on patients, trial participants can be requested to come to the testing or trialing centers at weekends or more convenient times. In this way, patients are benefitting directly as clinical trial participation doesn’t have to interfere with their life. This, in turn, will reduce recruitment efforts and reduce participant attrition. Consequently, the costs of recruiting new patients for clinical trials will all be decreased. Focusing on creating a positive patient experience will encourage patient retention in clinical trials, enhancing developmental efficiency.
Helping as many patients as possible and spending money on only those things that help patients in the short and long-term will lead to better business results.
Improved patient engagement can also drive drug adherence and patient outcomes. Payers reward brands that deliver on the clinical and quality-of-life needs of patients. Thus, improved patient engagement can indirectly reveal the potential for improved payer satisfaction, which significantly affects pharma’s commercial success.
In Shaw’s experience, even “employees [of pharma companies] are more motivated when they have a patient-focused mission.” They work harder, they “are more innovative and they spend less.” This not only achieves profits, but also “drives short-term results and increases retention”.
Expanding the definition of commercial success
Patient-focused initiatives can be measured against an expected ROI and evaluated in terms of their impact on the bottom line. Ultimately, adopting a patient-focused culture does not mean abandoning the bottom line or efforts to measure it. Instead, profitability from a patient-focused standpoint means expanding the measures that define the commercial success of pharma.
Pharma companies have tried focusing on business and profitability in the past without integrating or leading with the patient, but patient focus is a cultural change agent that is increasingly making its way across the industry. To reach the sweet spot where both patient needs and business needs are met, pharma companies need to challenge the traditional business models and see profitability in a new light.
Shaw caps off this thought nicely when she says, “Helping as many patients as possible and spending money on only those things that help patients in the short and long-term will lead to better business results.” This is how profitability can, and should, be measured.
If you are interested in learning more about the Aurora Project, click the link here to join the webinar "The Aurora Project: An Overview of Current Initiatives & How to Get Involved".
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