It has been stated and re-stated almost to the point of tiresomeness, but it’s true nevertheless: the pharmaceutical industry is facing some tough times. The difference this time, though, is that the current challenges many times fall outside the experience and purview of pharmaceutical companies‘ top management. So companies are, more and more, turning to pharmaceutical consulting to take advantage of the expertise they don’t have in-house to turn the challenges into opportunities.
Special conditions and requirements have always obtained in this industry, but now that peculiarity is even more pronounced. Here’s just a sampling of today’s tough issues:
Sweeping healthcare reforms, unstable economic conditions, and growing globalization call for radical adjustments in business models because stakeholders’ roles are being dramatically altered.
Ever evolving and more onerous regulatory requirements necessitate an adaptability never seen before in the industry.
Product pricing has to be able to cover the costs of essential investments (in R&D, for example), but, increasingly, pricing has to be justified on several fronts.
There exists a tension between the need for improved access to quality healthcare and the urgency to contain the costs of that healthcare.
These special problems call for special solutions, and pharmaceutical consulting is a way for companies to discover and implement those solutions-a prescription for a return to competitive health.
The US pharmaceuticals market, for example-which far exceeds $300 billion annually and is the largest market worldwide-has reached a point where it is at especially high risk, owing chiefly to the cost cutting expected to follow on the heels of the healthcare reforms. And, as a result, industry analysts look for mid- and long-term profits to decline. Further impacting competitiveness and profitability are the increasing bureaucratic entanglements involved in the drug-registration process and the burgeoning burden of regulatory compliance. Consequently, more companies are leaning more heavily on pharmaceutical consulting.
One area in which pharmaceutical consultants are beginning to play a key role is that of cost cutting. Now, that doesn’t mean indiscriminately laying about with the cost-cutting club and doing things like eliminating needed personnel. It means, rather, cutting costs by improving efficiency and reducing waste, usually through implementing lean manufacturing solutions. The greatest potential, however, for effective cost-cutting efforts may lie in marketing and sales, areas that have historically taken a backseat to more spotlighted activities like R&D.
Pharmaceutical consultants will begin prove their value even more as companies move into the relatively new territory (with many pitfalls to be skirted) of rethinking business models and outsourcing innovation. The traditional, rigid business model, especially with respect to marketing and sales, may be moribund, and so a new model with new decision-making structures is needed. As for outsourcing, it may in fact be the most cost-efficient way to handle some R&D innovation functions. But it also brings with it complex management issues and greater regulatory complications and dangers.
So, yes, tough times lie ahead, but pharmaceutical consulting may be the means to convert tough challenges into exploitable opportunities.