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An ecosystem perspective is the first step.
At the beginning of last year, some joked that 2022 sounded like “2020 too.” As it turned out, they were too optimistic. Asia, like the rest of the world, was hit hard by COVID-19’s omicron variants. Many countries had a hard time with the pandemic; meanwhile, others took draconian measures in their zero-COVID attempts, and the costs have been hefty.
For a cloud this dark, there were some silver linings with mRNA vaccines, PCR kits, and antivirus drugs standing out as the top winners. More importantly, the pandemic has been a true catalyst for many pharma companies to revisit their commercial models.
Firstly, relying on large hospitals and high-prescribing physicians as the sole go-to-market thrust has become less and less effective. Still, old habits never die, and it was hard for pharma companies to break away. With the raging pandemic and ensuing restrictions, companies had to look for alternative ways to brave the storm, and some have gained new perspectives in the process.
Pharma companies are operating in an ecosystem with different stakeholders, including peers, providers, physicians, pharmacies, patients, and payers: the “six Ps.” There are a number of new themes emerging among them.
Patients have more access to information but are not necessarily better informed. Online and mobile resources, social media, and peer support groups can be helpful sources of information on the diseases and treatment options but can be inconsistent and confusing. Taking a true patient-centric approach and empowering patients and caregivers with the right knowledge, information, and choices are an important first move as pharma companies reconfigure their go-to-market models.
Providers and physicians continue to be the all-important stakeholders but require a different engagement approach. Instead of being viewed as only a conduit for pushing drugs, it should be viewed more holistically as they could be the key to improving disease education, diagnosis, treatment, and care standards. Drugmakers have opportunities to enhance engagements with providers and physicians in a more meaningful way to help build capabilities and capacities, especially for those in broad markets.
Ongoing migration to online channels. Partly catalyzed by the pandemic, patients, physicians, and providers are moving to online and mobile channels. Online consultations accounted for around 15% of total consultations in China in 2022, compared to 6% in 2019. Many physicians can practice and prescribe online and offline, which has been driving the growth of online pharmacy. JD Health, one online pharmacy in China, reportedly boasted more than 130 million active users by mid-2022, and its half-year revenue increased by a whopping 48%, compared to the same period last year.
In light of the ongoing changes, some pharma have had a hard time tinkering with the traditional ways of doing things. Meanwhile, others are taking a more systematic approach to assessing the trends and implications, identifying the key stakeholders and their unmet needs as well as striving to innovate their commercial models.
With 2022 finally behind us, there are fresh hopes for the new year, together with more challenges and uncertainties. To paraphrase Heraclitus, the only thing that doesn’t change is change itself, and continuing to innovate will be key to staying ahead of the changes.
Selene Peng and additional collaborators in Simon-Kucher’s life sciences division in Shanghai contributed to this article.
Bruce Liu is a partner of Simon-Kucher & Partners, leading its life sciences division in greater China.