At Strategic North we like to constantly build our own knowledge and challenge current thinking, after all, being ‘Pioneering’ is one of our core company values. As part of this commitment we regularly undertake our own research into pharma industry issues and challenges. In one of these initiatives, we have recently been researching joint working between the industry and its customers (in this case the NHS but I think the findings on the current status, benefits, challenges and the potential for a new model of joint working, apply across markets).
The results have been unexpected and illuminating, they highlight that there is so much more which could be achieved by industry-provider partnerships. Pharma has not been perfect in some of its partnering practices, but neither are our customers in terms of building trust, relationships and loyalty.
Speaking with a client recently, highlighted beautifully some of these challenges and how a change of mind-set is required to shift the partnership paradigm. Here are the details of this case study (names have been omitted to protect the innocent). The pharma company in question developed (over more than a decade) an innovative and ground breaking product that for the first time provided a treatment option for a severe, chronic and degenerative condition. It was such a new therapy that no clinical services even existed for the condition. The company spent a huge amount of time, effort and not to mention finance with NHS providers on service design and support, so that patients could benefit from this treatment, which they have done and great outcomes are being achieved. A ‘miracle’ cure has been delivered. A very successful partnership, mutually beneficial to both parties and with the patient at the heart, has enabled this delivery; the very definition of joint working.
However, a new competitor product has now been launched with a slightly different regimen and a slightly different evidence base, but without any significant difference (and arguably a lesser cost and clinical benefit). However they argue that the NHS will save money by prescribing this new product. They would do wouldn’t they? And of course they can – they have not spent millions on building a patient service and infrastructure which did not exist previously, together with training and educating healthcare professionals and patients alike. I am clearly not against innovation, healthy competition or product differentiation and positioning; it is what we do for a living. But it is the response of many of the company’s NHS customers which raises some queries and concerns.
The response of some of our client’s key accounts has been to immediately switch to the new competitor product (and partner). I understand the financial constraints healthcare systems are under but I cannot think of another industry where this would happen so quickly, and long-term partnerships built over many years would be jettisoned so easily.
At a time where the NHS and other healthcare providers are being encouraged to invest in this area what does this tell us about the attitude to partnerships and the industry in general? In this case, and others, they appear to have very short memories. How does this encourage industry investment in service design and development? And what does this type of behaviour do to encourage innovation? If you know that you can enter the market after your competitor has spent millions on building the infrastructure and expertise, but where relationships mean little, why would you take the risk to drive the next innovation?
There are benefits to partnership working, but it needs commitment and trust on both sides.