Guest Column | October 23, 2013

Pharma Manufacturers: Tackling the Pressures Of Changing Purchasing Models


By Gopkiran Rao, Senior Director of Life Sciences Marketing, Model N Inc.

Purchasing models for drugs, devices, medical supplies, and equipment are changing. Sophisticated buyers in the managed markets, retail, institutional, and even government markets are pushing for greater accountability and transparency from drug and biologics manufacturers, particularly in pricing.  Further, buyers are demanding to see the value of healthcare and the improved health outcomes of patients. To their credit, pharma manufacturers understand the advantage in facilitating informed decision-making for partners and customers, thus, a growing conversion to openness. This openness is happening across multiple sectors as manufacturers focus more on delivering measurable value to customers.

Concurrently, pharma manufacturers are also feeling the pressure to extend this openness across multiple channels - group purchasing organizations (GPOs), pharmacy benefit managers (PBMs), distributors and wholesalers – even with reduced headcount. This is particularly true of sales and marketing teams which often are the least capable of absorbing resource challenges effectively. Recent massive reductions in sales forces across pharma have resulted in less face time and influence with prescribers. Pharma manufacturers who rely heavily on ‘relationship-selling’ are increasingly facing challenges.

Data transparency and accountability demands on the healthcare and life sciences industries are mounting. Most of today’s pharma manufacturers operate in departmental and functional siloes. While stakeholders largely agree that congestion points and associated costs in data processes are worth eliminating, siloed views of the business limit any ability to accommodate to mounting industry pressures. To remain competitive and compliant, Pharma manufacturers need to implement comprehensive and consolidated processes for managing commercial pricing and incentives, as well as regulatory price and program reporting.