The storm approaches....

May/01/2008 05:42 Filed in: Pharma Business
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When it comes to business you have two options: change or perish. Pfizer, with the failure of a successor for Lipitor, is streamlining management and reducing bureaucracy to be more competitive. GSK has hired an ex-Lilly executive to manager their European operations and is also reducing the layers of management. In the end these changes will make pharma more competitive but in addition to organizational changes they need to focus more on patients and less on Wall Street.





Changes are needed within pharma companies and the new crop of CEO's are making changes to respond to the realities of the new business world. Regardless of what others say I believe there will be cutbacks in DTC advertising as new managers questions the allocation of dollars to programs that could provide better ROI's. With so many eyes now following every DTC campaign it's now a great time to go into hiatus to regroup and rethink overall strategy.

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Pharma is dealing with a wholesale change in the business environment.



The biggest expense that pharma senior managers need to look at is the sales force. They are becoming less and less effective and with costs of fuel rising they are more expensive to maintain unless you move them all into hybrid vehicles. It is now estimated that 35% of physicians will not see pharma sales reps anymore and as physicians struggle to maintain work life balance and make their practices profitable that number will surely go up.

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The sales force is spending less and less time with physicians




The real fundamental change however is needed in the way pharma recruits people and motivates their current employees. In this authors opinion they need to focus more on patients and less on ROI. OK...I can see your eyes start to roll "the job of American business is to make money" but I believe that pharma CAN make money and be profitable by focusing more on patients. In the end, with patient empowerment, they are the ones who are going to decide if they want to take your product or not.


As for DTC? Well like I have said many times before the days of $100 million budgets maybe gone forever. There are lots of ways to reach your audience using more cost effective models based on an integrated campaign that both raises awareness and drives business. However, pharma companies need to start building these capabilities now. They can ill afford to wait to see what others are doing they have to be willing to both take more risk and measure each program for the effectiveness of specific metrics. Change is coming and those companies that can see the storm approaching are the best ones to weather the storm until it passes over.


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Patients are becoming more and more empowered when it comes to healthcare choices

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