Dr. Sandeep Narula
Associate Professor, Assistant Dean,
School of Pharmaceutical, IIHMR University
It’s more than one year now we are surviving under the threat of Covid-19. The same is the case with business organizations now. Business is not at its usual. With first giving respite around Nov/Dec.2020, and Healthcare and Pharma business trying to make and cover the grounds, but only for the second wave to reckon back this with more power and brutality. The second wave has created a severe havoc on the lives’ of the people and with deaths per million population in India crossing 180 mark and bringing the entire Healthcare system to collapse.
With experts claiming for the third wave too, and if that happens then how the business, economy and social life of the people will be. Are we really prepared for the new social and business ecosystem? Will the government will help the business organizations to combat the huge losses? Will the employment issues can be addressed? Especially w.r.t. the Pharmaceutical business, how the pharma companies will make their transitions from the existing business model to the new digital business model. Is the top leadership (barring big MNC pharma giants) really equipped will future digital challenges? As per BloombergQunit opinion survey of 2018, the digital literacy of India was only 1.67%, if I extrapolate further by the same growth rate then also by Dec.2020, it will barely touch 2%.(also, pl ne noted to be digitally literate, the individual must qualify the 4cs criteria(Communication, Creativity, Collaboration and Critical thinking).As per Hootsuite Jan.2021 stats, Individual internet users are 20.1%, 32.3% of the population on Social media, with Youtube leading from the front followed FB, Whatsapp and Instagram.
As per Gartner, Healthcare, companies are experiencing “unprecedented levels of disruption”, among the major reasons for disruption mentioned are internal organization changes and cost pressure followed by regulation, compliance. It is estimated by Gartner, that only 20% of the “fit” healthcare organizations are going to thrive and the remaining will left behind. It is already a proven fact that the companies which are currently operating on digital platforms , their CAGR is 12%-15% higher than the traditional business organizations.
The biggest challenge with the Pharmaceutical companies is not of Digital Transformation, but it of Transformation. Today the major challenge pharmaceutical companies are facing are from their own domain companies, but it from the tech-driven domain companies like Apple, Microsoft, Google, Amazon and many others. As these tech driven companies already have a readymade ecosystem with strong customer data( Demographic and Psychographic) and details which includes HCPs and Patients both, hence it is very easy for them to offer the desired solutions. The recent rise of companies like-Fitbit, GoogleFit, MIFit, Apple health, Samsung Health apps in the Wellness domain is a clear example that Pharma is set to loose their share to these tech driven companies. These tech-driven companies have already made a paradigm shift from “illness” to “Wellness”. The Pharmaceutical companies till date they are focusing on illness and treating a sick person as their customer, but these tech driven companies they don’t talk about any disease but they are focusing on “fitness” , “staying fit and healthy” and by this definition, the entire universe is now their customer. Now this is known as Transformation, where from a small percentage or a fraction of population, you start targeting to a bigger mass or may universe, then this scale is known as trans formation. And when you want to reach/address this scale, this magnitude of customers, then your traditional business model will not work and for this, then you need a model which allows you to reach lacs and crores of customer with ease an convenience and this scale is offered by digital platforms.
One thing is certain, it is , if not impossible, then at least certain, that for Pharmaceutical companies, the preCovid period, in terms of HCP physical coverage and interaction is not going to come back. The Pharma companies have to adopt the digital route to reach HCPs as HCPs are finding digital platform a better option., as Digital is the perfect route for recovery and growth.
As on date, the pharmaceutical companies barring few big pharma companies, the so called digital transformation is beyond their realm. To go for digital Transformation the companies need to invest heavily in IT , starting cloud computing, as investing in cloud computing will offer them a competitive advantage, as it this investment only which will offer them suitable platforms to operationalize their business strategies. Needless to say, here , in place of the traditional IT manager , company need to hire CIO or CTO. Keeping in view the volumes of data, the digital adoption and application offer, Pharmaceutical companies not only need to hire CDO (Chief Data Officer) but also they need to change their operating model too keeping the disruptions occurring frequently at the market place. Hence, it is certain that minor or fringe changes or changes occurring at the edges, are not going yield the desired response and it will yield the investment below the cost of capital.
Also, today HCPs, they are not looking for product promotion , but they are looking beyond the products. The HCPs , they are not using one channel of promotion, rather there are multiple channels through which they are getting exposure to their product/services. So, Pharmaceutical companies instead of going for Multichannel channel marketing , they need to design the concept of Omnichannel Marketing and this itself is big challenge for the Indian Pharmaceutical companies. Todays’ HCP they are more used to Omni Channel Marketing and this experience they are already getting in their daily routine product/services which is offered by the companies like Amazon and Netflix. Pharmaceutical companies, they need to design and think for their product promotion in this manner or on these lines and they have create an ecosystem through which they can offer their product/services to HCPs. In other words, they have create an EXPERIENCE in such a manner that the HCP is fully engrossed or immersed in the company brand promotion ecosystem. And to create this ecosystem/experience , Pharmaceutical companies need to hire a Chief Experience Officer.
Apart from above three challenges, the fourth challenge which the pharmaceutical companies will have face is the emergence of Substitution power of Pharmacist. Due to Covid, the supply Chain of majority of the Pharmaceutical business organization was/is interrupted de to the shortage of APIs and raw material, hence during this period, even the HCPs also have given the consent and acceptance of the substitution. Today this prescription substitution is more than 40%, as this is a paradigm shift in the pharmaceutical business selling. Now Pharmaceutical companies have to think about these Pharmacist also as their customer, and they have to offer “desired” customer services to these Pharmacist also. Also, these local pharmacist have stepped up their services in the local community are now offering various form of extended services like Blood pressure monitoring, blood testing and even Video Calling services to the HCPs apart from free homedeliveries of medicines.
In days to comes, if pharmaceutical companies need to grow and sustain then they have embrace the above mentioned challenges and have to think of Digital adoption first and then transformation which will eventually give them scale and magnitude both.
Dr. Sandeep Narula
Associate Professor, Assistant Dean SPM
Prof. S.Narula, a healthcare sales and marketing professional with result oriented 23 yrs industry and 3.5 yrs of academic experience. Prof. S.Narula has worked at industry level in distinguished pharmaceuticals companies like GSK, Unichem, and Emcure in various capacities. His last industry assignment was with Group Cheviot – General Manager (Project), responsible for business diversification of the Group business. He was Country head for Zenaust Pty Ltd (Australia) for brief period. Dr.S.Narula obtained his MBA & Ph.D degree from R.A.Poddar Institute of Management. Before Joining IIHMR, has worked for 3.5 yrs in M.M.University (Mullana).Spearheaded successfully BBA/MBA programs as a Program Coordinator, was responsible for launching-Ace Club, Spectrum, Students Cell at Department level and Educare,Support & Initiatives and Project Sarvodaya at the University level. Also launched Pre Summer training Orientation program for the Management students and introduced various live projects for the students. Have published few research articles on Brand and Career Management.