Beyond the pill: The move towards value-added services in the pharmaceutical industry

Abstract

An increasingly competitive environment, reduced drug pipelines, multiple patent expiries and payers’ increasing demands for outcomes-based evidence are all factors currently presenting challenges to the pharmaceutical industry. Offering value-added services alongside products, as a means to improve health outcomes and provide a competitive advantage, is a strategy currently being explored by many pharmaceutical companies to confront these challenges. The aim of this study is to analyse to what extent such service strategies are and will be integrated into the pharmaceutical business model. The scope of the study is global and concentrates on pharmaceutical companies manufacturing branded products. In all, 59 experts working for the pharmaceutical industry were asked for their perceptions on current and future service strategies within the industry. Most respondents believed that service strategies are becoming increasingly important. However, there are still multiple challenges to overcome. Legal restrictions, difficulties in measuring return on investments, conservative business philosophies and mistrust towards the pharmaceutical industry are factors slowing down the advance of service strategies.

Keywords

Beyond the pill value-added services pharmaceutical industry service strategies pharmaceutical business model survey explorative study

Get full access to this article

View all access options for this article.

References

Baines

. Problems facing the pharmaceutical industry and approaches to ensure long term viability, MSc Thesis, Pennsylvania: University of Pennsylvania, 2010.

Mullin

. Beyond the patent cliff. C&EN 2012; 90: 15–20.

Carone

Schwierz

Xavier

. Cost-containment policies in public pharmaceutical spending in the EU. Eur Econ Economic Paper 2012; 1: 1–64.

Cattell J, Chilukuri S and Knott D. Beyond the pill: creating medical value through technology enablement. In: Keeling D and Schrader U (eds) Operations for the executive suite. Opening new horizons for current and future pharma leaders. McKinsey & Company, 2012, pp.85–94.

Falconi M. At Novartis, the pill is just part of the pitch. The Wall Street J (US edition). 2 January 2013 (accessed 27 March 2014).

Mattke S, Klautzer L and Mengistu T. Medicines as a service. A new commercial model for big pharma in the postblockbuster world. Santa Monica, CA. RAND Cooperation. OP-381-HLTH. 2012: 1, http://www.rand.org/content/dam/rand/pubs/occasional_papers/2012/RAND_OP381.pdf (accessed 27 March 2014).

Fahrmeier

Künstler

Pigeot

. Statistik – Der Weg zu Datenanalyse, 7th ed. Heidelberg: Springer, 2010.

Scannell

Blanckley

Boldon

. Diagnosing the decline in pharmaceutical R&D efficiency. Nat Rev Drug Discovery 2012; 11: 191–200.

Ruzicic A and Flostrand S. Valuable collection. What are the prospect for grouping complementary services around a product? Pharmaceutical Market Europe, Jun 2011: pp.32–35.

10.

Buzzeo B. Achieving Transparency Worldwide: Recent Trends in Global Aggregate Spend and Disclosure Compliance. Cegedim Insights, http://crm.cegedim.com/newsletters/insights/Documents/AchievingTransparencyWorldwide.html (Oct 2012, accessed 27 March 2014).