Let's talk strategy: why adherence is the key to sustainable revenue in Pharma
Research from HealthPrize and the Crédit Suisse recently unveiled in very clear terms the potential of making adherence to medication a cornerstone of revenue-generating strategy thinking in Big Pharma.
In their report, the Crédit Suisse analysed and predicted revenue and Earnings Per Share increases for seven pharmaceutical companies including Lilly, Pfizer and Merck. HealthPrize then conducted a similar analysis with 14 added prominent companies such as Novo Nordisk, Novartis and Astra Zeneca.
The results were significant. Moderately improving medication adherence would lead to revenue increases ranging from 2% (Merck) to 28,7% (Novo Nordisk) on a 6-years forecast, with an average increase of nearly 9%. (Crédit Suisse, 2018 ; HealthPrize, 2019)
When it comes to EPS, estimates range from a 1% increase (Bayer) to a 45% increase (Novo Nordisk). (Crédit Suisse, 2018 ; HealthPrize, 2019)
The current business model used by pharmaceutical companies has proven successful over the last decades. However, common revenue-increasing strategies have proved to be increasingly complex to sustain over time:
- Bringing a new molecule to market, or registering a new application for an existing drug costs as much as $2,7 billion (Tufts Center for the Study of Drug Development), and all possible “low-hanging fruits” in that regard have already been grabbed and consumed.
- Raising drug prices comes together with public backlash and customer fraud allegations, such as the ones recently claimed by diabetes patients over the 150% price tag increase of insulin applied by Novo Nordisk, Eli Lilly and Sanofi (Bloomberg, 2019).
- Relying on the salesforce to create and sustain relationships with the healthcare world doesn’t prove as efficient as it once was, as access to physicians has never been tougher (ZS Associates, 2015).
The time is due for pharmaceutical companies to organize corporation-wide adherence programmes that consider the patient’s psychology, and put an emphasis on long-term education. While investing in such programmes does not have to be risky – the financial rewards are both certain and high.
We who develop adherence solutions used to lack the numbers to prove that point.
Such research shows that is no longer the case.