Why price increases will no longer work-a thought for the CEO's of life science companies.

So this article in FiercePharma on Friday (5/13) caught our eye.  What is the moment when reality and perception converge for the Pharma industry?  What will happen when the CEOs of all the top life science companies need to tell their boards there is no more room for growth.  We hope someone in these organizations is spending some time on this subject, because the time is now.


We have always suggested there is a new way to engage with customers.  Regardless of the marketplace conditions, we believe that treating a customer as you would like to be treated as a person is the best approach. But why has the industry through the years continued to see things differently, then when faced with the patent cliff the drug industry faces, we seem to be out of answers.


Our advice, start to manage the expectations of your boards that lower earnings and revenues are going to be a way of life.  Look to BRIC nations for your future growth and develop harvest strategies for Europe and the US.   Several are still looking to research and development for the answer, but we believe the best thing you can do is to ensure you keep the business you earn.


Ask your senior leadership team what they are doing to make sure refills, re-orders and customer complaints are managed more effectively than the constant focus on creating demand for your products/services.  We realize you have a big number to fill every year!  It seems we spend a lot of time (and money) doing some of the same things.  Medication adherence programs work!  Why not mandate that all your products and brands make them an integral part of their marketing plan. 

Transparency and Health Advocacy Organizations

The release of the American Journal of Public Health study [here’s the abstract ] showing that the vast majority of health advocacy organizations (HAO) did not reveal that they had received grants from an industry member raised the predicable media ruckus. The industry member was Lilly, and only because Lilly was the first member to disclose its HAO contributions. The study year was 2007 – four years ago.

According to the study, only 25 percent of the 161 groups – mainly mental health organizations -- acknowledged receipt of the money on their Web sites, and 10 percent admitted that Lilly was a sponsor. The concern, of course, is that the Sunshine Law only requires that industry members make public its financial arrangements with physicians –- not with nurses, not with HAOs. You can find the groups here.

We’ve decided to present another side of the picture, one other press outlets didn’t mention, at least that we could find.

Thomas Sullivan, who writes the blog Policy and Medicine, says the study is essentially skewed: it was funded, he says, by organizations and individuals he considers industry critics – the Pew Charitable Trusts, George Soros, the Rudin Family Association – who want to present this data “in a negative light."

Industry, he says, already has adopted transparency via the Sunshine Law. Forcing HAOs to do the same is wasting money and time. What is needed is more collaboration between industry and HAOs “to focus their research and development budgets on diseases and new breakthroughs.”

“While transparency is important and it should certainly be feasible for HAOs to disclose their corporate grants, the information and data must not be used to discredit the organizations or programs… that help improve health care for patients,” he writes. “However, that is exactly what Rothman’s [AJPH] article attempts to do.” The study asserts that the HAOs’ lack of transparency is “disappointing because [the grantees] ‘pursued activities that promoted the sale of Lilly products.’ But this claim is overstated.”

He continues. “What is really disappointing is that the authors use their anti-industry bias to present the HAO programs as marketing endeavors, when in reality, these programs taught patients and physicians how to treat deadly and chronic diseases, create a strategy to end breast cancer, and to utilize the latest breakthrough in medical science."

As we’ve written time and again, all industry-initiated financial transactions should be made public. What we hope for, but doubt is happening, is that all parties involved here -- industry, its critics, and so on -- are mindful of the unintended consequences of these actions.