Kearney the Genuis

AT Kearney just published their second report on the future of the pharmaceutical industry (http://www.atkearney.com/images/global/pdf/Pharmaceuticals_Out_of_Balance_2.pdf) .

To me it looks a lot like the PWC report done earlier this year on what pharma has to do to stay profitable ( http://www.pwc.com/gx/en/pharma-life-sciences/pharma-2020/pharma-2020-marketing-the-future-which-path-will-you-take.jhtml)

What keeps astounding me is that they all say the same thing. I mean these guys are paid a lot of money to come up with strategic approaches to help some of the biggest companies.

Yes they contain beautiful pictures and impressive graphs but they seem to add very little to solving the issues that companies face.

Here is Kearney's solution to all our ills (patent cliff, fired reps and efficacy re-imbursement):

"1. Know your therapy areas, and strengthen your market-access and market-development skills to build an intimate understanding of care pathways, stakeholders and drivers for each therapy in each locale.

2. Build a long-term decision-support modelto make difficult trade-off decisions on price, investment, make or buy, therapy and geographic focus—and thus optimize portfolio value. The model should include a clear understanding of the relative profitability of niche or mass market pricing strategies, and a thorough knowledge of emerging low-cost examples. Abandon the U.S.-centric model and adopt a more global view.

3. Put the market back into innovation bycreating mechanisms to align the development portfolio and process with market needs, build relationships between marketers and scientists, align incentives and implement trial processes that operate seamlessly.

4. Set up for success in emerging marketsby localizing development activities, creating

low-cost mass-market solutions, and building relationships with local delivery agents.

5. Get ready for a lower cost model by redesigning the manufacturing and distribution footprint, looking for manufacturing and distribution partners, and preparing for mass production."

So the big solution? More marketing and make stuff cheaper then try all the tricks in the book to find new drugs. Mmm very novel, sounds to me like something from a first year marketing class.

What one should remember is that the pharmaceutical industry has its origins from pharmacist who used to make cures in the back of their shop and then sell it to customers. Some worked , some didnt, but the model has not changed much. Its become more sophisticated and more removed from both the patient and the supply side , but its still the same.

And this is the main weakness of pharma today.

When novelty wears thin, all that is left is price.

What most companies forget to realize is that you are selling blood pressure lowering, not an ACE inhibitor.

That mental switch is a significant one. but more on that on the next post

Monsieur UNK