Time to rip up your list of competitors and start again
The results of the 2014 eyeforpharma Healthcheck Survey are in. We analyze the feedback from 1600 global participants, drawing on the insights of key industry insiders on the survey findings.
59% of pharma executives believe that the industry’s main competition will soon come from outside of the industry according to the eyeforpharma Industry Healthcheck survey. Commenting on the results, Gillian Tachibana de Llull, Director, former Global eMedia Communications, Merck, asserts that we shouldn’t consider this a threat. “[Right now], this is a huge opportunity as there is great potential for pharma companies to partner with such companies. It will be interesting to see which non-pharma company is willing to associate itself with a pharma company much like they are willing to associate themselves with automotive companies”.
This was just one of a range of interesting findings from the survey, showing that although beliefs are both strong and widespread in key areas, the industry is stifled by a lack of action. At eyeforpharma, we believe this illustrates the extent to which we are sleepwalking into a potential nightmare, as pharma’s conservatism threatens to derail an entire industry. To download the full results plus analysis from some of the industry's thought leaders click here.
First Industry Healthcheck
eyeforpharma’s Industry Healthcheck is the first truly global, fully independent survey of executives across the entire industry.
Paul Simms, Chairman, eyeforpharma outlined the key objectives: “Our mission was to find out what people really think at a personal level, testing the health of pharma and diagnosing areas for future improvement. It was a long time in the making - we ran several public consultations, including a large mass-participation ‘graffiti wall’ at our Barcelona conference. What we now have is a fascinating range of questions and answers which we hope to repeat on an annual basis in order to track sentiment over time”.
Here are 5 more of the key findings of the Healthcheck Survey, with commentary from industry insiders who give their perspective on the results.
5 Key Findings:
1) Revenue Outlook is Positive
The majority (74%) of respondents believe their company will increase its revenues in 2014 compared to 2013 while a similar percentage, 69%, believe their company will increase profitability over the same period. In his analysis of the findings, Omar Ali, Formulary Development Pharmacist Surrey & Sussex, NHS Trust is confused by such optimism: “ The UK healthcare budget, for example, is fixed at 0% growth for the next 5 years.This means that we simply have no budget for growth. I wonder what actual percentage growth/revenue pharma expect and if my growth for medicines is budgeted at 0%, then where will their sales revenue come from?".
So, is this a case of misplaced confidence? Or does pharma have a hidden trick up its sleeve? Are we relying on being able to outwit competitors, find markets where growth is stronger, or simply release new medicines where the case is so compelling it will attract additional spend? Or maybe the effect will be more subtle, like Pfizer’s attempt.
2) Reputation Management Remains a Mystery
39% of respondents are unsure as to whether the reputation of the pharma industry is improving amongst healthcare professionals, while 42% are sure it isn’t. In other words, only 19% are positive about the future. And in terms of taking action, again, a meagre 23% report that the industry actually knows what it needs to do to improve its reputation. Evidently there is a low level of confidence within the industry as to whether the reputation issue can be turned around.
The industry continues to look on while some of its members misbehave repeatedly, without taking any decisive, punitive action. For instance, other than the ABPI in the UK, I don’t believe that any of the industry bodies even have disciplinary tools embedded in their governance principles".
Pierre Morgon, CMO, Cegedim, echoes this doubt. “Personally, I don’t think pharma acts in a cohesive manner when it comes down to addressing reputation. Although it is well known that a single scandal can instantly destroy a reputation painstakingly built up over several years, the industry continues to look on while some of its members misbehave repeatedly, without taking any decisive, punitive action.For instance, other than the ABPI in the UK, I don’t believe that any of the industry bodies even have disciplinary tools embedded in their governance principles”.
Paul Simms is equally despondent. “I sense a feeling of resignation amongst the respondents; they believe that things will remain the same or in gradual decline no matter what efforts pharma make over the coming months and years. This reticence to tackle the reputation issue head on will only exacerbate the situation as pharma pull back from engaging and take a defensive stance instead of addressing what needs to be done”.
3. Pharma’s business models lack differentiation
64% of participants surveyed agreed that most pharma companies have a similar business model and there is no real differentiation.
“As a customer I agree. I don't see much differentiation either. They all seem very similar to me”, comments Omar Ali.
The lack of progress in this area is cause for concern overall according to Simms: “I think our industry should be ashamed – it relies almost entirely on the performance of its medicines, despite being guilty of me-too products in the recent past. Most recent innovations in market access and commercial functions are tactical at best. This short-term thinking is a major cause for concern”.
4) A Pharma Career is for Life
70% of survey participants would like to remain in the pharma industry for the rest of their career.
“At first, this sounds great. Only 1.28% feel strongly that they want to leave. If contrasted with the scores in reputation scores seen earlier – individuals think they are doing good work”, interprets Simms. “However, there are other potentially negative factors which could be at play here – maybe people don’t feel they are capable of translating to other industries, maybe people don’t want to restart their careers, maybe they just want to stay safe in what they know”.
Pierre Morgon also feels this hides some negatives truths: “This is a matter linked to talent development. Most respondents are likely to have had a linear career, in the same company (or maybe a few of them) and few have ever been an entrepreneur. As a consequence, their perception of the risks linked to transitioning into another sector is probably inflated. Moreover, few people take their skills development seriously; they rely passively on the HR processes in place in their companies without engaging personally in analyzing their needs, identifying solutions and executing them. It is sad to see that in a number of cases, people are merely navigating the corporate life, expecting to reach retirement before the next merger precipitates their demise".
5) Valued-Added services will become central to pharma’s business strategy
The role of Value-Added Services is set to increase, with 73% in agreement that pharma companies need to become genuine healthcare providers.
“This resonates with me as a HCP. We need solutions, not a packet of 28 tablets”,says Omar Ali.
Simon Davies, Executive Director, Teen Cancer America sees the direction towards Value Added Services as inevitable: “I believe that the dynamics must change and a mature dialogue is necessary between the industry and patient advocates, something that current regulations do not allow. These are very interesting times ahead and we all need to watch this space.”
To view the full findings of the Healthcheck survey, click here.