In early 2003, Cap Gemini Ernst & Young, together with Leonard Lerer, Visiting Senior Research Fellow, and Theodoros Evgeniou, Assistant Professor of Information Systems, from INSEAD, conducted extensive research into the viewpoints of pharmaceutical customers and their evolving relationship with the pharmaceutical industry.
The resulting report, Vision and Reality Survey 2003, sheds light on what customers want from healthcare and pharmaceutical companies, and how they want to receive it.
The primary research included a web survey with over 1,400 physicians in five countries, a population poll of over 4,000 consumers, qualitative interviews with 33 senior representatives of payer organizations, and one-on-one interviews as well as workshops discussing initial research findings with 72 senior executives at 31 pharmaceutical companies in 15 countries.
The 2003 Vision and Reality survey is the output of an annual collaboration between INSEAD and Cap Gemini Ernst & Young. In 2001 the research focused on e-business and in 2002, customer relationship management in the pharmaceutical industry.
In this year's survey, the interviewees identified three major forces that have emerged gradually over the past few years and are now seriously threatening the industrys margins and growth:<UL><LI>Pipelines are suffering from an innovation crisis that threatens to last until the end of the decade.
<LI>Drugs revenues are under unprecedented pressure from new pricing laws, generics and
competing products, patent challenges, and increasingly stringent approval and marketing
<LI>At the same time, key stakeholders in the healthcare market are changing their roles, their influence on prescribing, and their attitudes toward the pharmaceutical industry. Physicians are restricting the time they give to sales representatives, patients are taking more responsibility for their health, and payers are tightening their grip on prices and prescribing using restrictive formularies. Pharmaceutical executives also recognize the imperative to become more customer-focused and more collaborative. </UL>
The good news for pharmaceutical companies is that customers have needs and demands that are not currently met: Physicians are demanding a more honest, science-based relationship with pharmaceutical companies more value in terms of information and education for themselves and patients, as well as support in running their practices more effectively. Proactive patients
are eager for additional sources of medical information and payers need support in their efforts to reduce healthcare costs while improvingpatient outcomes. These are areas where firms can improve and possibly differentiate themselves.
The implications of the survey represent five prescriptions for future success:<UL><LI>Re-invent product portfolios through services that increase the value-added to customers by addressing patients information needs and helping physicians interact more effectively with payers.
<LI>Respond more quickly to changes in markets and customer demands by conducting frequent reviews to assess customer responsiveness and adopting a flexible response strategy.
<LI>Pioneer a new approach to channel mix and resource allocation to achieve both customer
satisfaction and value/return for the company.
<LI>Create a customer-focused culture that provides fast, quality service and delivers targeted messages through the customer's channel of preference.
<LI>Connect the organisation internally and externally by using technology and analytics
to integrate information regarding customer needs from call centers, web channels, and other key sources. </UL>Lerer comments in the 2003 Vision and Reality report that: For global pharmaceutical companies, getting smart and fit has moved from being a strategic aspiration to an urgent goal."
Cap Gemini Ernst & Young, July 2003