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2013 is the industry's year of respite, a brief intermission that gives the C-suite extra time to adjust the reel on that
slow motion movie with the payer voiceover that says: "how's that hopey changey thing working for you?" For Big Pharma, time
moves in small increments, set by the minute hand of the patent clock. It is unique among sectors in being able to predict
precisely when market dominance fades to loss. Nevertheless, all that certainty about the endpoints of the product lifecycle
has done little to force company cultures to move faster in reinventing their business models to keep pace with disruptive
change.
This year provides one more trial run to the future. Management can still hedge their answers about what it takes to succeed
in markets that face relentless pressures of commoditization, where drug companies have to fight not just among themselves
but with every other health provider, for every incremental dollar of revenue. The question, for every company, is more or
less the same: I've scrutinized my assets, sold off and restructured operations, slashed my SG&A/income ratio to single digits,
but now what? Where is my Act II, the forward plan that positions us to achieve real top-line growth?
Multiply and differentiate
C-suite executives know that the cloistered, country club approach to market evaluation is gone forever. The massive global
restructuring in the way healthcare is financed and delivered also suggests there is no one path forward; every company is
putting itself under a microscope to identify what offerings will make it distinguishable from others in a crowded, "show
me the money" marketplace.
All that hopey stuff aside, there are some real positives, including fresh evidence of disease relevance and depth in the
pipeline, particularly at the crucial late Phase II level; a slow realignment of the clinical trial process to anticipate
payer expectations and obtain better terms for reimbursement; and technology advances that, properly leveraged, can bring
marketers much closer to untapped sources of market growth, ranging from the non-adhering patient in the United States to
the rural poor in India. IMS data suggests that US companies may be leaving as much as $30 billion in annual revenues off
the table due to poor rates of prescription compliance, while just one of those backwater Indian states, Uttar Pradesh, has
more potential patients than the entire population of Brazil. And poor countries, as a group, do have disposable income to
spend on drugs.
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