Rob Halkes has been working as a consultant in healthcare and pharmaceutical marketing for 20 years. He gained experience in the industry focusing on strategic change, professional development and innovation in pharma. He is also part of the development team of the integrated healthcare platform, Drimpy. We asked him to share his insights on the changing environment of the pharmaceutical industry and healthcare.
You have been urging strategic change in the pharmaceutical industry. Why is this issue important and what kind of specific changes do you think pharma companies should consider?
Because of the current economic situation, the trend in healthcare will be “more care for less money”. For all governments in healthcare in Europe, it is easy to cut costs on pharmaceutical products. So we see an enormous pressure in a lot of countries, not only in the Western countries, but in the Eastern countries of Europe as well. We see a lot of pressure on cutting and reducing prices and on the replacement and substitution of premium and specialty products with generic pharmaceutical products. To the pharmaceutical companies it will mean that they are trying to sell their products in the context of a commodity trap. The commodity trap is an economic phrase that implicates that prices for premium products will be inflated by upcoming generics or cheaper products. If you go along with the trend to make cheaper products or to sell your products for cheaper prices, you will find yourself in a downward spiral. The pharmaceutical companies have no tradition in trying to innovate their marketing approach other than just creating new products, submitting those to the market and introducing those at a higher price. And now premium innovative products are being replaced by generics. So although you may have made or developed very good innovative pharmaceutical products, those will tend to be replaced by generic ones. The market of specialty products merges with the market for OTC or generic products. The only solution to escape the commodity trap is to innovate your marketing approach.
That can be done if you are willing and competent to make a strategic change towards helping the doctors to treat their patients better. Helping means a two-step process: not just helping doctors to prescribe your product, but helping doctors with your product to be able to help patients better. Then you can convince the prescribers that there is more to your product than just the product itself, that you are also actively supporting the doctors to innovate their caring for the patients to support them better. This added value could be the reason for a higher price instead of going down with the commodity trap. This is difficult for pharmaceutical companies because for 20 years now they have been on the same business model of promoting new products for higher prices – that will come to an end now. That is only one issue of all difficulties that present themselves to pharmaceutical companies.
More strict regulation of promotion, lesser access to prescribers, upcoming generics and new stakeholders – these are other issues in the pharmaceutical industry that need to be mentioned. Governments, healthcare insurance companies, payers and patients are all new stakeholders that will come to the market with a clearer voice that they want better products for a better care. Hence, strategic change is necessary when it comes to changing market conditions and the way the conditions and caring for health are changing in different countries. Adapting to the conditions in specific countries will become relevant. The European affiliates will have to design their approach according to the local conditions of care.
You also developed a new business model called “value innovation” for the pharmaceutical industry. Could you describe this concept?
The approach of value innovation that I developed in the Netherlands has very clear results. We can show graphics of the outcome and how obvious the changes and results are. Through these results the model speaks for itself. The approach of value innovation is based on two principles:
The first is that as a pharma company you have to support your healthcare providers – doctors, specialists and pharmacists – to help their patients better by improving their way of caring for the patients. There are two concepts for this kind of care: integrated care and participatory care. That’s the first principle: innovate for your healthcare providers to help them improve the way in which they are performing their care for health. It might look as though you are mingling with their business. But in our experience healthcare providers mostly don’t have time to reflect on how they are providing care. When you help them with expertise, training and other services, you will be appreciated as someone who is caring for their interests and is acting on their behalf. When you do so with integrity, you will gain a different market position: a trusted one. It will reimburse you through the attention that your product is getting from them as being your partners in the business of caring for patients. For a lot of companies this will be a change in their selling approach. They have to learn how to submit and propose those services, because it differs much from just detailing.
The second principle is based on the necessity to differentiate between your targeted doctors: between those who will readily appreciate what you are doing, and those who will not. Most of the pharmaceutical companies already segment their priority doctors as to their individual potential for business. I propose to extend this to differentiate between those who have an innovative stance to healthcare development and those who don’t. In a changing landscape of healthcare, those who do want to improve their way of caring for patients will often collaborate with colleagues to approach innovation in care cooperatively. We see examples in health care groups, like “Zorggroepen” in the Netherlands, the Policlinics or medical centers in Germany or the GP consortia in the UK. We developed a segmentation procedure with which you can target the GP centers that are the most influential and have the most potential to cooperate with as a pharmaceutical company. The benefit for those that do want to work with you will be that patients and other stakeholders in care will notice that by working together in a co-creative way, it is possible to create better outcomes of care with less cost. It will lead to a higher satisfaction for patients and for a lower cost of patient per year in specific care programs, especially for chronic care. And if you can demonstrate, that you as a pharmaceutical company are helping the healthcare system in this direction, you will get a lot of attention that will lead to a position of preference that will help your business as well.
So actually the change will be from a purely product-oriented approach toward a patient- and healthcare-oriented position. And that is an orientation that healthcare providers and doctors will recognize as a change from selling toward helping.
Last October you showcased Drimpy.com at the Health 2.0 Europe conference. Could you tell us about this project and its aims?
This particular project is two years old now. We started it with the founder and owner of Drimpy, ArnoldBreukhoven in the Netherlands. He had the idea of a health platform for integrated care in which patients could communicate better and have a better relationship through the online network with healthcare providers. We did see this not only as a necessity from the patients’ point of view but also from doctors’ perspective. Data and information from the patient is relevant for the doctor to act upon. Doctors often want to get information from a patient that the patient isn’t able to generate readily. He hasn’t been tracking his health parameters before the consult, doesn’t know precisely how often he has suffered from certain conditions, is not aware of the medication he actually uses, etc. With Drimpy the patient is able to collect and monitor his health parameters like blood pressure, sugar level, daily complaints, pain sensations, etc. and record his health-related information, medications, conditions, allergies, as well as store his health related documents (documents made by the patient himself, documents received from the lab or from the hospital, for example an x-rays). So a lot of data and information can be added and tracked on the platform that will help a doctor to diagnose the patient and implement a therapy in a much more effective and satisfactory way. Furthermore, the platform not only functions as a personal health record, but also as a communication device in which the patients and caregivers can communicate and interact privately. Naturally, Drimpy also facilitates specific applications to support the patient and his/her loved ones with adequate and reliable information to help them understand and better cope with their conditions. It supports them in compliance-related activities as well. In doing so Drimpy works as an Ehealth platform, safely and reliably.
The site is firstly based on the principle of being an integrated care platform: activities from the different caregivers like doctors, pharmacists and hospitals come together to the patient’s benefit. Secondly the platform is patient-based. The site is designed from a participatory point of view. Anyone who registers on the platform can do this. Thirdly, and that is the most interesting feature, the patient has a private network that he/she can develop for people to be a part of his/her healthcare team, and to give them access to certain personal health information. The platform is set up like a private Facebook so the patient can select people that he wants to share information with and add those who want to help him in coping with his conditions. Drimpy.com is thus an integrated healthcare platform that is managed by the patient himself being in the position to select and keep the data that he wants to track and to invite and work with those caregivers who he wants to work with. Drimpy puts the patient in the position to set up his healthcare in a participatory way.
The digital ways of setting up a network like you just described in connection with Drimpy.com seem to work for patients and doctors. How do you see the pharmaceutical companies in this mix? How do they usually react to these digital solutions in your experience?
First of all, when it comes to Drimpy we see the site as a platform with which it is possible to organize the processes of care, to organize the caring for health itself. Making it clearer for the patient what the doctor is doing during the treatment is important because the patient has to work with the doctor to set up and complete his therapy. This will result in a better understanding between both parties about what they are doing, why they are doing it and how they will proceed. So it enlightens all the processes of care and makes telemonitoring and telecare possible. That will at least reduce the time spent on unnecessary face-to-face consults. It will enable them both to be efficient with face-to-face time. As a result the doctor will have more time to attend to difficult patients rather than to routinely work through consults that are actually not needed. The doctors and patients can reserve consults for those situations where they are necessary to optimize the therapy. This makes everything more rationalistic and more efficient. The point of course, is to have doctors and patients learn about how they can do this, and to customize the platform towards the specific needs of chronic conditions like diabetes or COPD, etc. The pharmaceutical companies can offer this facility to the doctors as a service from their side. With Drimpy they have a very distinguishing service to deliver to doctors. When they do, I’m sure doctors will be surprised and thankful to get help with implementing this version of telehealth in their practice, so they can help their patients with more satisfaction.
We talked about a lot of new trends: strategic change, new business models, new platforms and ways of talking to doctors from the pharmaceutical companies’ point of view. How do you see all these trends changing in the next year?
I presume that healthcare providers – doctors, hospitals, and pharmacists – will be quicker to adopt social media for the benefit of improving care and their relationship with patients. And pharmaceutical companies will be next. That is because healthcare providers – as we see in the Western countries – will understand that social media is relevant to their practice. Social media, integrated in healthcare processes will become more and more popular. In the near future one will not be able to work without them. Social media will help doctors to distinguish their position and help them in reaching out to their patients. They will first adopt social media in a web 1.0 and then 2.0 fashion, and then in a more integrated way as we have seen it with Drimpy. Drimpy itself facilitates healthcare providers to quickly integrate social media into their practices.
Pharmaceutical companies have to cross a threshold to change their business. That is a huge task for them, and to also look at the internal condition of the pharmaceutical companies. Because it is still very tricky for them – as they perceive it – to change in ways in which they are actually delivering services to doctors to help their patients better. Providing service in this way is a way of doing business that they are not accustomed to. They will be reluctant because they see that it will be a big change. As one of our pharmaceutical affiliates in the Netherlands said: “The hard thing is not so much to change towards the local conditions of the Dutch market, it is more difficult to get an approval to do so from the European headquarters.” It seems that changing the internal conditions of a pharmaceutical company is harder than to just change into a country-based marketing approach. But luckily we are in a position to work with pharmaceutical companies to show them how they might embark on this adventure and we can also learn from examples in other countries, like the UK or Germany. We can show them how they can present themselves in difficult situations and how they can move further towards solutions that would help their business as well.
You mentioned that pharmaceutical companies are reluctant to change their ways of doing business. In your experience what are the main obstacles that they mention when it comes to implementing a new model or new marketing solutions?
Well, the main obstacle is to adopt the vision that you can do your business in a different way than you have been doing until now. The pharmaceutical industry has one of the most traditional ways of doing business in the Western world. These companies have not changed in the sense of adapting their businesses according to the market conditions for the last 10, or maybe 15 years. And the pharma rep model in which they are promoting the product in detail conversations with doctors is the most sustainable business model that we have seen. They are so accustomed to it, that it is very hard to implement any change. So this is where we provide assistance. We have a concrete and specific way in which we can guide them step by step to change their ways of marketing in order to change in a manageable way instead of changing overnight in a troublesome way. Guidance is important to change, so that the development of the business doesn’t disrupt the outcome. The most difficult steps are to learn how you should do these things differently, to try to experiment with it carefully and to build up a new company and new sales force.
Change is a very difficult thing to do, not only for pharmaceutical companies but for doctors as well. Local market conditions will show them that past performances will not sustain their business for the future automatically. You have to implement the changes that are necessary in the framework of the system of healthcare and its renewal. When these changes emerge, pharmaceutical companies either get lost in the market or they adapt to these changing conditions, partner with healthcare providers and help them to provide better care in their countries. The ones that are daring to take the first step towards the changes are the ones that learn how to change and provide this specific support. This very competence will be strategic in the years to come. The first ones to move will have this advantage over their competition. If you wait until others have changed, you can only pick up what’s left over in the market. The first ones have the benefit of choice and of learning how to proceed. Going on with following a routine is easy, making the changes, learning how to do things differently is however one of the most difficult things for people to do.
(You can connect with Rob Halkes on Twitter.)