Future of Pharma & MedTech in the COVID-19 Times

Millions infected, hundred thousand dead, other millions filing for unemployment benefits, people under lockdown & governments grappling with the devastating economy. Such is the impact of COVID-19. More specifically to Healthcare (HC) and to the Pharmaceutical & MedTech Industry, the current ecosystem is stressed, uncertain & extremely challenging. What further complicates the situation is the fact that we don’t have visibility on how long will this last & how long will it take to recover & thrive from the impact of COVID-19. However, what is certain is that the organizations must anticipate various scenarios, define the new normal and adapt to the everchanging, evolving & dynamic recovery and to the new normal. There isn’t a choice, but to be planned & dynamic

The future on the industry cannot be looked at in isolation & will entail the future of how other stakeholders of the industry evolve towards the new normal

Governments Must take steps that TRANSFORM Healthcare

Even in developed economies, healthcare was stressed & was found to be inadequate. The situation in other economies was severely compromised & inadequate. Healthcare will now be ever increasingly on top of the government agenda. This will mean the governments, to stimulate the healthcare, must pledge higher GDP spend on healthcare moving forward to ensure the HC ecosystem is better equipped for a future pandemic/outbreak. This also provides the governments with the most opportune time to address long-pending questions around access & equitable HC. Governments will push, more than ever, Digital transformation, Health Economics & Outcome Research (HEOR) & Value-Based Healthcare (VBHC) to achieve this. Businesses need funding to tide over the crisis hence Governments must also additionally infuse investments in building & scaling HC infrastructure besides also unlocking struck payments in the pipeline of various HC benefit schemes. Additionally, the government must further advance universal access to healthcare, maternity, disability and pension benefits for all workers. Crises like this one not only underscore the need for healthcare, but such benefits can also help smooth consumption during times of distress and demand shocks.

All this will mean that immense opportunities for pharma & MedTech sectors will open as soon as we are over with the COVID-19 situation, hopefully from Q3 onwards. The organisations must anticipate the change & build the organisation design to tap this change

Industry Must Make Sweeping Changes to Stay Relevant

Digital adoption remains the lowest in Pharma/MedTech industry among others. With COVID -19 & social distancing becoming the new normal for a sufficiently long time, the organizations must quickly adopt virtual & digital models of promotion to the clinicians departing the conventional face-to-face sales model. Furthermore, Hospitals and health systems will be under significant pressure to reduce expenses, which will pose revenue challenges for the industry. In response, the industry will optimize their selling costs by increasing the use of digital channels. Tools such as chat/video bots, conferencing, content management systems, interactive presentation software, virtual whiteboarding tools, e-commerce platforms, virtual sales aid, virtual reality tools for customer training, and visual assist tools for remote support must be quickly adopted. AI & ML will be increasingly used to enhance the virtual & digital appeal to the clinicians. Engagement models with the KOLs & education of the clinicians will also be fast-paced towards digital adoption. All this will require upskilling/reskilling of the sales force besides also changing the KPIs & CRM tools for tracking & managing performances of the sales force.

Organizations must reimagine their future customer engagement strategy and optimize the mix of virtual and in-person channels to accelerate recovery.

The industry has for long followed the mentoring model of line managers that was apt for face-to-face sales promotion. With sales promotion becoming increasingly virtual, the sales force will need multi skill-based pieces of training that adapt to many new digital & virtual tools. The organization will move from line managers to skill-based verticals of trainers & hence line managers will also need to quickly embrace the changing role they will have

With digital/virtual promotion, data will be captured more than ever, & hence analytics will play an important role in making the operations effective & optimised.

Organizations must build expertise, for good, around analytics to absorb this change.

Providers will play a pivotal role in the changing ecosystem

 Even after the curve has flattened and things begin to normalize, the enduring effects of COVID-19 will manifest. Historically, health care has been relatively immune from recessions, so the demand for medical care is relatively constant across the business cycle. Furthermore, health insurance/empanelment reduces the out-of-pocket costs for HC; thus, many sick people, at least those with health insurance, can still afford to visit physicians

On an immediate basis, providers will be busy building their infrastructure, especially around ICUs, for the management & treatment of COVID-19. One will see accelerated demand for diagnostic tests, personal protective equipment (PPE), ventilators, and other critical medical supplies/relevant pharmaceutical products

The admission rates of hospitals have dropped to 30%-40%, driven by the deferment of elective & planned procedure. The providers are expected to encounter a surge in the demand from Q3/Q4 onwards as we see a possible recovery from COVID-19 & will come back to new normal, with the vaccine & treatment getting available by Q4 2020/beginning of Q1 2021

The providers will also move for an accelerated digital adoption, driven by social distancing & optimising cost. Telemedicine & digital health will see a huge heave. Scheduling will also become more penetrative as providers & patients will become increasingly aware around social distancing

The Pharma/MedTech industry must build appropriate models around these trends to be in sync & to quickly bounce back to accelerated growth

Payers will demand accountable Healthcare

With stressed HC ecosystem & rising cost of HC, as providers ramp up their infrastructure to deflate the current situation, payers will have to manage the expectation of maintaining the cost of insurance from the consumer’s side & reimbursing the escalated HC cost. This will see an accelerated transformation from pay-for-service model to value-based healthcare & increased focus from payers on health economics & outcome research.

The providers & Pharma/MedTech industry should increasingly be accountable for the value of money spent on healthcare & tie it closely with the measurable outcomes

Clinicians will adapt to the new paradigm

Pharma/MedTech sector has historically relied on a direct, face-to-face sales model where field sales force communicates value propositions and develop deep relationships with clinicians and decision-makers in a hospital setting. The salesforce has been the advertising & broadcast medium for the industry

With customers & hospitals becoming sensitive about the social distancing, rules of engaging with customers will change drastically. Penetration of virtual/digital engagement with the customers will likely be a lasting response to the pandemic. Even after COVID-19 fades, a generous portion of the sales process will remain virtual due to continued limited access and lower revenue expectations

Converting face-to-face meetings into virtual meetings will require more than a videoconferencing solution. Sales organization must fundamentally rethink its interactions with customers. Not only should sales teams adapt quickly, but they also should do it well. Ability to adapt well & quickly to entrench worth into every customer interaction will separate the winners from the rest

Organizations must also consider embracing new digital capabilities to enable digital touchpoints with their customers (such as online customer service representatives, webinars with key opinion leaders, professional education, AI & ML based models to showcase & present their solutions).

Organizations will also be expected to expand digital capabilities such as, investment in digital media, digital detailing, or creating digital product demonstration.