Archive for September, 2014

Pharma and its Innovator’s Dilemma

A recent conversation with a friend in the pharma industry validated my thoughts and concerns about the systemic challenges that pharma is facing. The pivotal insight came from my friend’s comment that he wants his next job to be “not just about pills,” but a job that takes on a broader role in healthcare, one that’s more focused on patient outcomes.

This personal revelation was a bit surprising given the fact that my friend’s entire career has been pharma marketing. Promoting drugs is his area of expertise. So why did it take a career “transition” phase to bring about this personal commitment to the need to broaden pharma’s mandate?

innovation highwayWhy not innovation?
The challenges and obstacles that senior-level pharma executives face are extraordinary, especially when it comes to innovation and moving the industry forward. Pressure from Wall Street, business partners and investors who are focused on revenue growth and short-term profitability makes it incredibly difficult for top executives to think outside the box or consider what’s next for the industry or their company.

Every day, pharmaceutical companies large and small are managed to meet performance and revenue expectations. My friend observed first hand how even the long-term planning process (5 to 10 year horizon) doesn’t give senior executives the flexibility to discover and engage in innovative opportunities that might allow them to consider new offerings or business models.

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More Than Half of Doctors Refuse to See Reps

A recent report from ZS Associates affirms a decade-long decline in pharmaceutical rep access to physicians. The reasons are well known: doctors have busier schedules, they’re joining large practices or hospitals with “no-see” policies that prevent reps from coming in, and in many cases doctors simply don’t think it’s worth seeing reps.

Although physicians don’t have time for reps, they do need their content. It’s just that now they would rather get it through digital channels.

There has been an evolution in the role of reps from someone who delivers a promotional reminder to someone who is more experienced and savvy and who serves as an account executive helping to provide doctors with the resources and content they need and want.

It’s no longer just an evolution
But what was once a gradual change is now accelerating. According to ZS, in 2008, 23% of doctors put restrictions on reps; now it’s 49%. Basically, half of the doctors in the United States now have moderate to severe restrictions on rep visits.

What we’re beginning to see is a business model evolution. Driven by technology and economics, the role of the traditional manufacturer’s rep is dying.

How fast will this happen?

diffusionDiffusion of Innovation
We have a tool that can predict what will likely happen. It’s called the Diffusion of Innovation theory. The theory, first published in 1962, outlines how a new idea, innovation or technology becomes diffused throughout society.

The theory addresses the questions around how innovation spreads. How connected is the social system into which this innovation is being introduced? How tightly knit is the social system of users, and how much do they talk to each other?

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