Prepare your organisation for the future with 'Beyond the Pill' services
Value-added services central to pharma strategy
By 2020 most treatments will be paid for based on accomplished outcomes, meaning that pharma will need to move into the health management space to maximize the effectiveness of their products making “beyond the pill” services a standard, claims eyeforpharma's Value Added Services report.
It’s time for pharma to come to grips with the new reality and become genuine healthcare providers. According to eyeforpharma's industry Healthcheck Survey, 73% of pharma executives are convinced that value added services will become central to the industry’s business strategy. This is good news, given that those services are clinically effective, lower the overall cost of care, and, according to eyeforpharma's Value Added Services report, generate profits in the range of US$3-7 for every dollar spent.
Going “beyond the pill” means creating trust
Branching into services is a common behavior of companies that compete in mature product markets, because services allow for greater differentiation and higher margins. However, we have not yet witnessed a similar development in pharmaceuticals.
It is a shame that pharma hasn’t caught up yet, as expanding into services might improve the industry’s image, something that’s desperately needed. If you want to be a trusted partner, you need to provide services. And no one needs to be convinced about the benefits of the shift in perception: it will benefit recruitment and retention of research and management talent, ability to enter into partnerships with academic institutions, and would reduce non-compliance risk. Note, though, that to change your business model, you need to truly generate value in a way that’s distinguishable from investments that aim directly at increasing sales.
The Value Added Services report has shown that currently most VAS are targeting patients, less frequently providers, and even fewer offerings are designed for governments, health systems, and payers. Most often, VAS are offered for free in an attempt to recover their investment through drug sales.
Services aimed at patients include providing educational materials that address signs and symptoms of a disease, treatment options, and self-management techniques. Other services involve advice on how to navigate the healthcare system, particularly useful in markets such as the U.S. Finally, there are adherence programs, which try to encourage patients to stay compliant with their treatment regimen. Those are typically combined with educational materials. To support that, companies also provide supplies that help patients keep personal health records, keeping a note of signs and symptoms, procedures, treatment changes and side effects, whatever is required in the management of chronic conditions.
For providers, pharma started to offer training programs in population health management; systems that enable physicians to identify patients who are likely to have a disorder but haven’t been diagnosed; back office support for practices that need help with administrative tasks.
For payers and governments, pharma provides help with patient identification and screening, population data analysis, support with service delivery, and identification and promulgation of best practice.
Yes, you can! But should you?
First, they’re hesitant to accept pharma’s shift from being a seller of high-priced products to a partner in innovation. Second, payers see going “beyond the pill” as a thinly-disguised sales tool. Third, they’re afraid useful services will suddenly be discontinued when they don’t generate the expected ROI".
Whether or not to invest in a service offering requires careful consideration by a company. On the one hand, commercial rationale for value-added services is to recoup the investment through increased sales of their products. On the other, there are legal and regulatory restrictions to what a service operated by a pharma company may do, what companies may claim under those services, and companies have to be sensitive to public perceptions.
The Value Added Services report found that payers perceive value-added services as the “necessary evil” and name a number of reasons for their skepticism. First, they’re hesitant to accept pharma’s shift from being a seller of high-priced products to a partner in innovation. Second, payers see going “beyond the pill” as a thinly-disguised sales tool. Third, they’re afraid useful services will suddenly be discontinued when they don’t generate the expected ROI.
Meanwhile, patients are more open and accepting of services provided by pharma. Overall, patients are less concerned about companies’ motivations to offer such services, but are worried about the execution, as often services fail to meet patients’ needs.
Value added services are pharma’s future. Increasing the effectiveness of care and reducing its cost, services will allow the industry to move away from focusing on products, and to rebrand itself as healthcare’s trusted partner. To achieve that, services need to be incorporated at the product development stage, should get support of senior management, and engage external stakeholders, among others. Most importantly, however, successful design and implementation of services requires a shift in mindset.
To learn more about how to do it, download the Value Added Services report here.
Since you're here...
... and value our content, you should sign-up to our newsletter. Sign up here