What’s it going to take to ‘Rethink Pharma’?

What does that even mean? Patricia Seybold, Founder of Customers.com, once wrote “fasten your seatbelts!......Why? Because we’re in the midst of a profound revolution. And it’s bigger than the internet revolution or the mobile wireless revolution. It’s a customer revolution".



Customers have taken control of our companies' destinies. Customers are transforming our industries. And customer loyalty – or lack thereof – has become increasingly important to executives and investors alike.

And now, even Pharma, once seemingly uncaring and impervious to customer feedback and dissatisfaction is feeling the winds of change. The long held practice of ‘staying below the radar’, not adding to the public debate and keeping a low profile, which worked so well for the industry for so long, seems out of date and a strategy long past its used by date.

Public debate, dissatisfaction and lack of trust are plaguing the industry, leading to a giant pushback against Big Pharma. But, what’s changed over the years is that the power and influence in healthcare has shifted, and the voices that could once be ignored are now dismissed by pharma only at their peril.

Patient Centric Revolution

A Patient Centric Revolution is taking place across healthcare, in every corner, in every sector; patients or healthcare consumers like you and I are taking more responsibility and control of healthcare. And pharma can no longer afford to ignore it. 

Pharma needs to rethink how it fits in this new changing landscape, a landscape that they will no longer be able to control and shape to fit their objectives as they once did.

So when we say ‘rethink pharma’ for me, it is really ‘rethink around healthcare consumers’ and ‘patient centricity’.

Most other industries now recognize and accept the power of consumers. Not just in whether they buy their products, but also how they buy them, through which channels, how much they pay, the things they like and don’t like and much more. Power lies with consumers. Most industries and organizations recognize and accept this.

The good ones even embrace it and benefit from their close relationships with customers.

This global phenomenon is not a trend, or a fad, or something that can simply be ignored. Pharma has struggled against it – and continues to fight against it, for example with its amazing lack of transparency and pricing policies, but, in the longer term, they will not be able to overwhelm consumer power.

We are seeing the reaction to pharma’s continuing internally focused strategies with the steady decline of public trust in the industry and the growing barrage of negativity about the industry’s behavior.

We know the current pharma model is under huge pressure to change. It has been this way for perhaps as long as ten years, but the pressure is really building now.  At least it seems that way.

Most senior pharma industry executives would agree that the model is not sustainable, but do not articulate what this actually means and being unsustainable is quite different from being broken. 

Not sustainable can be code for; our cost base is too high, our prices are under attack with declining productivity and effectiveness. Therefore, we need to drastically cut costs and slash jobs in order to maintain our profitability. We need to keep working hard to discover and commercialize new products to replace older products coming off patent. We need to hang on, stay focused and weather this storm until things go back to normal and we discover new blockbuster products and boost our pipeline.

None of this speaks to significant model change.

But many industry watchers do not believe this is going to be enough. Many commentators and consultants would say the model is indeed broken and needs fundamental and significant change. The old model is dying and a shot of innovation in the arm is not going to be enough.  Wholesale, fundamental change is going to be required. 

There is, however, a significant lack of agreement in how broken the model is and indeed, what aspects of the model are broken. And that leads to divergent opinions about why the industry needs to change today and not some time in the future. 

Little advancement in rethinking the model

How to preserve financial performance is at the heart of the resistance to change, with many people believing that any change in focus away from core business and current focus will adversely impact results, and getting into other non-core business areas will negatively impact the business".

A true burning platform, à la IBM’s financial position in the 80’s, does not exist for big pharma today and the potential risk to current financial performance is perhaps the major limiting factor in attempts to reform the industry.

How to preserve financial performance is at the heart of the resistance to change, with many people believing that any change in focus away from core business and current focus will adversely impact results, and getting into other non-core business areas will negatively impact the business. 

There remains a strong attachment to the current business model, with senior executives having limited confidence that alternative business models would be as good as, let alone better than the current one, and therefore any change away from the traditional approach is seen as downside rather than upside benefit, so the inertia favors the old model with a clear focus on efficiency.

After years of pilots and tests, and a powerful load of PowerPoint presentations, pharma has not advanced much in terms of rethinking its business model. And despite the flurry of mergers and deals either underway or being contemplated right now, the model does not look like changing much anytime soon. Indeed, from past experience, we have seen that megamergers derail business model innovation as the company intensifies its focus on integrating the two organisations and eking out the efficiency gains that are required to justify the merger in the first place.

Sure, there have been advances and the industry is much leaner than it was, but the core of the business, it’s underlying thinking, many of the processes, the structures, sales and marketing tactics, approaches to customers, many of these things remain virtually unchanged.

The time for change is now. However, no one would suggest a big bang approach to organizational change in this industry, but there are things that should and could be changed today that would both positively impact short-term financial performance while better positioning the company for the future.

Over the coming months, I will look at some aspects of the traditional model that would benefit from some new and, of course, patient centric, remodeling.

If you would like to contribute to this discussion or you have a particular point of view you would like to explore, please let me know. Together we can help the industry take concrete action today and Rethink Pharma to become more patient focused.



The Patient Summit 2014

Jun 17, 2014 - Jun 18, 2014, London

An integrated approach to patient-centric outcomes