Insights

Why Healthcare Companies Need to Transform to a Digital Business

April 16, 2015

Megatrend #2: Transforming to a "Digital Business": A Fundamental Paradigm Shift

The “feet-on-the-street” pharma business model is dead or dying.1, 7

Digital health will impact every individual and every organization involved in the healthcare system.3 The competitive advantages of today – development resources, sales and marketing scale, global high prices and revenues aided by restricted access – will be transformed by 2020 into a marketplace driven by distribution strength (particularly to emerging markets), pricing based on ability to pay, and more products with lower revenues and lower costs.5

The value proposition and related revenue stream will shift from drug development/drug volume to an emphasis on health outcomes. Business objectives, therefore, will be shaped by community engagement across multiple digital channels, with key stakeholders – patients, HCPs and payers – at the head of the line.2

The emphasis on outcomes will invert the value proposition, from top-down control to an individualized value prop where revenues are derived from efficacy.2, 4, 6 Patients, payers, providers and governments will be at the centre of this new model, putting a premium on comprehensive digital engagement that focuses on the entire patient pathway, from initial information-gathering behaviour, to diagnosis and living with the disease or condition.1, 7

Building active digital communities and leveraging digital tools and resources that drive improved outcomes will require the industry to rebuild its reputation among patients who lack trust that pharma firms are always acting with their best interests in mind.8

The trend is a product of an evidence-based research study undertaken by the Healthcare Division in Valtech to map the pharmaceutical landscape of digital mega trends. The research study provides essential insights on how Pharma companies could utilize digital engagement to break down stakeholder barriers, impact stakeholder behaviour and demonstrate more cost-effective outcomes. The research study is based on information from 100+ trusted sources and has resulted in the identification of 14 mega trends.

Reach out to gain an understanding of how to execute on the underused digital opportunities

The Healthcare Division in Valtech has developed an analytical framework that can identify the engagement potential of your brand.

Please contact Account Manager Luisa Fernanda for further advice or to set up an informal meeting.

Make sure you did not miss Megatrend #1: Pharmaceutical CEOs lack confidence to act.

Sources:
1. Accenture. Anne O’Riordan et. al. (2013). Accenture 2013 Technology Vision. Every Life Sciences Business is a Digital Business. Www.accenture.com
2. Ernst and Young. Kimberly Ramko et. al. (2014). Commercial excellence in Pharma 3.0. www.ey.com
3. Bain and Company. Chuck Fargas et. al. (2012). The future of healthcare—there’s an app for that. Www.bain.com
4. Manhattan Research. Monique Levy et. al. (2014). Pharma Multichannel Marketing Outlook: 14 Trends to Drive Growth in 2014. www.manhattanresearch.com
5. UK Life Sciences Skills and Strategy Board. Nigel Brooksby. (2014). Chairman address. Www.eyeforpharma.com
6. RAND. SørenMattke. (2014). Understand the transition from pay per pill to pay for value means for your business model. Www.eyeforpharma.com
7. PA Consulting Group. Richard McIntyre. (2014). Unlocking commercial potential - making new business models work. Www.eyeforpharma.com
8. Patientview. Unknown author. (2014). CORPORATE REPUTATION OF PHARMA – THE PATIENT PERSPECTIVE, FEBRUARY 2014. www.patientview.com