1. Understanding Stakeholder Landscape

As the healthcare market continues to evolve, the stakeholder landscape is also shifting. Understanding the elements that shape this landscape is a key factor to shaping your commercial models.

Traditionally prescribing power lay with individual physicians. Decision making power has now shifted to payers & patients and healthcare outcomes are increasingly become a priority. The role of physicians in decision-making is influenced by payers and patients who decide what offers the best value for their money, in terms of a positive improvement in health outcomes or concrete economic benefit.

The emergence of advanced health information technology is creating an outcomes-driven industry. Mobile health technology drives patient adherence and compliance. Increased usage of social media platforms enable the sharing of health information. The combination of social media and health information is empowering patients in health literacy. Payers are leveraging the growth of available health data to make more informed decisions. As the stakeholder landscape shifts, it also becomes increasingly fragmented. Health care systems around the world are highly varied and have developed in diverse historical, economic or cultural environments.

2. Stakeholder Value Drivers

The increased influence of different stakeholders means that pharma and medtech companies must consider what drives value for all stakeholders.

In this new landscape, payer priorities shift from product launch to examining specific health interventions, not only from a medical perspective but also on the economic and moral implications too. Payers need data to approve safety of the drug but also show the impact/effectiveness it has on its patients.

Patient value drivers are also becoming increasingly complex as cultural backgrounds and personal values are taken into consideration.

Pharma and med-tech companies need to understand the priorities and goals of each stakeholder and map the specifics of what drives value for individual stakeholders. Understanding these goals and priorities, they can start mapping the individual value drivers.

Listening and insight into the subjective value drivers of a specific audience has become a key priority for pharma and medtech companies. Insight can be acquired in through direct personal interaction, traditional and social media, key account management, clinical trials, customer service and other sources.

3. Business Model Development

For years, new product development has been a pillar of the pharma and medtech industries. Today, the capability to develop new business models around health outcomes is equally important.

Unlike product development, business model development requires multiple stakeholders to collaborate and co-create around a patient’s cycle of care.

Post – care research of the treatment is required, as opposed to the old approach based on the amount of products sold. Outlined below are 5 steps to building business models around health outcomes:

– Understand the environment:
Brainstorm first in this stage. Define goals of key stakeholders, see what resources fits best in terms of the product to refine ideas and research data to secure a listing.

– Gain deeper insight:
Research the market. Understand the patient environment by seeking insights from the customers at different stages of the patient pathway.

– Generate Ideas: 
Filter ideas to determine which ones would best gain access. Consistent testing through this stage is critical.

– Develop the model:
From the customer feedback in stage 2, build up the business model and conduct commercial trials based around the key stakeholders.

– Implement:
Select pilot for scale-up to deploy across the market.

4. Market Access

Market access is the process the pharma and medtech companies go through in order to get their product on the market.

For access, a deep understanding of local stakeholders is needed. KAMs must understand local stakeholders such as health care providers, payers, patients and policymakers and identify their value drivers accordingly. The level of influence over regulatory approval, listing, pricing and reimbursement that each individual group has can then be identified and leveraged.

When developing new business models that move beyond traditional products and involve multiple stakeholders, market access can be increasingly difficult. Most payers are still operating in the role of rewarding pharmaceutical companies for the products they deliver to the system. Processes and metrics to measure and reward performance in delivering health outcomes through a combination of products and services either do not yet exist, or are in an embryonic state.

Understanding the local infrastructure is critical as new business models rely on social media platforms, electronic health records, telecommunication networks or wireless networks. It is imperative to understand the level of deployment of the infrastructure in place, how it will evolve, who the key stakeholders are and what the associated regulations are in each region.

Ultimately, the goal is to create a collaborative relationship with stakeholders based around the development of value propositions that address the needs of policy makers, patients and payers.

5. Product Launch

The product launch process must become more dynamic, by both preparing the product and the market for launch and adapting the value proposition and commercial model as stakeholders needs change and evolve.

The relationship between new business model development and market access is vital to product launch and relaunch. New business models must restructure the existing launch curve or introduce a new channel of revenue. Designing a customer-centric launch can be achieved by defining the ideal target marketing and refining the communications with respect to that. In-depth knowledge of the stakeholders involved sets the foundation for mapping the value drivers.

The next consideration is managing communication channels ranging from traditional physician detailing to more innovative ones like social media. This will drive decisions in selecting the appropriate channel mix.

6. Commercial Investment Portfolio Optimisation

Commercial Investment Portfolio Optimisation (CIPO) is a component for market analysis and decision-making.

Using analytics and modelling techniques CIPO allows organisations to allocate investment across markets, products, distribution and promotion channels.

Traditional product – centric business models relied on return in investment assessment to make decisions on product portfolio or optimal distribution and promotion channels. This approach is not adaptable.

CIPO takes into account the goals of multiple stakeholders when processing the product. This is to ensure that the final product meets optimal profits. Additional research focused on sales and promotion effectiveness is required. By gaining insight into key stakeholders, the approach to sales channels can be analysed closely to address the needs of the stakeholders involved. Promotional campaigns are analyzed and optimized by modeling and decomposing the individual factors influencing the sales curve.

7. Become a Responsive Organisation

To achieve successful commercial excellence, pharma and medtech organisations must realign dynamically around markets and stakeholders.

The market had shifted from product – centric business models to dynamic business models which respond to changing needs of stakeholders and market factors and also combine market access challenges and product launch processes. The dynamism of the market and the interplay among these activities will require an agile organization with silos removed and enabling functions closely aligned in culture, behavior, management and performance measurement. Rigid organisational structures of the past are not effective in the new business environment. It’s time for pharma and medtech companies to learn from their commercial experiments and adapt in real time.