With fewer blockbuster products hitting the market, a focus on treating more narrow patient populations, and more competition than ever before, pharma companies’ ability to drive success through their products alone is shrinking. As a result, companies are realizing they need to capture more value—both with and for their customers—a prospect that’s caused the industry to rethink the selling model and adopt a more customer-centric mindset.
This represents a huge shift for companies accustomed to selling physicians on their products’ features and attributes and has prompted reflection from leaders about what exactly “customer centricity” will mean for them going forward. For many organizations, still, a definition of customer centricity is elusive.
We expect to see broad variation in the ways customer centricity is delivered across the industry as companies continue to fine tune their approach. To help pharma leaders adapt and define what customer centricity means for them, we’ve broken down how we are seeing different players—big pharma, midsize pharma and emerging pharma—invest in their journeys towards customer centricity. Then, we identified variations in each of these players' paths that leaders need to keep in mind to truly deliver for their customers.
Many big pharma companies, which we’re defining as multi-product companies such as Pfizer, Merck and Novartis, are facing a patent cliff in the next few years and they’re feeling the impact of declining value associated with each pipeline asset. Because of this, they’re taking the lead in evolving the selling model towards customer centricity to fill the gaps in the revenue stream and extract more value from pipeline products to future proof the business model.
Customer centricity for big pharma will mean leaning into personalization of the customer engagement model. This means engaging customers with the right message, at the right time, with the right channel and expanding services and solutions that capture value beyond the molecule. With pressure on the bottom line, big pharma will drive standardization across portfolios and business units and leverage their size to capitalize on economies of scale. Historically, big pharma has focused on selling to the physician. But with cost pressures and access to physicians becoming increasingly restricted, they must continue to move the selling model up the value chain. We see companies starting to expend significant focus and investment on health systems and provider engagement strategies. The term “customer” in big pharma organizations will be used broadly to capture this wide range of stakeholders that now need more attention and focus.
For organizations that pride themselves on product innovation and science, we expect some companies to be hesitant to abandon that mindset in favor of customer centricity. But we expect to see continued investment in research and development (R&D) innovation, business development and licensing (BD&L) and operational efficiencies in clinical development. With the focus on strengthening early product development and acquisition, we expect to see these companies discuss how they are delivering customer value earlier than ever before. They’re likely to intensify their investment in establishing partnerships and innovating on platform solutions to serve customers across therapeutic areas (TAs) and products.
To deliver for a broader range of customers, we expect companies to evolve the organizational model from one that’s brand centric to one that’s organized around customer types. TA teams will become more prominent and functional silos will start to blur as teams work in a more unified way around each customer.
Big pharma will struggle to move towards customer centricity if they continue to believe that the path to success means winning on the product alone. There are three areas big pharma should pay attention to:
- To be truly customer centric, leaders should make their teams accountable for meeting customer centricity metrics rather than just product sales metrics. Customer excitement, satisfaction and engagement are emerging as the new terms of success. While these metrics are a good start towards embracing customer centricity, a bolder move is measuring customer enablement. This metric will help companies evaluate whether their customers are achieving their objectives and desired outcomes. Organizations that invest in customer feedback loops will see a stronger adoption of customer centricity in the ways they work across teams.
- Most pharmaceutical companies hedge on solutions and services development until the phase 3 data is in. Companies should apply a broader TA or business unit lens to meeting customer needs by investing in platforms and partnerships earlier on.
- Breaking out of the functional, product-centric silos requires strong leadership from the top. Leaders can’t just pay lip service to customer centricity—they also must incentivize the behavior they want to see. Organizations that focus on redefining ways of working will be better equipped to make the change and start delivering for the customer.
Midsize pharma, or companies with focused TAs, such as Gilead and Biogen, have historically had to make choices around where to play. As these companies look to compete in their TAs, they see themselves being “all in” because each customer and TA is so critical to the success of their business model. As competition in their markets intensifies, these organizations will need to shift to win with patients and capture additional value.
Patient centricity will become core to how midsize pharma delivers for customers as they weave their services into patients’ individualized journeys. With this laser focus on patients, we expect to see companies build content for patients who may need disease area education management and support in their daily lives. Instead of using big ad budgets for TV campaigns, we expect companies to adopt more targeted, digitally driven approaches.
We expect midsize pharma to move quickly to activate the new customer engagement model, making strategic, incremental changes rather than large transformations. These companies will be looking for plug-and-play, but customizable off-the-shelf analytics and automation solutions to manage customer relationships and personalize the engagement model across channels. Companies that implement a fail-fast culture will likely see faster gains in adopting new engagement models.
Midsize pharma is also expected to be more bullish, relative to big pharma, in activating social platforms. They will work rapidly with their compliance teams to establish the appropriate terms and boundaries for managing these channels, and they will seek out partnerships with social platforms to quickly drive awareness and activate patients as a critical driver of their success. The degree of change for midsize pharma will be more modest than with big pharma. We expect continued organization around TAs and BD&L within specialties will persist. We also anticipate that of all organizations, midsize pharma will likely be the first to break the traditional brand manager model, and in some areas may look to have more of a franchise focus or customer focus rather than an individual brand focus.
With the limited scale of midsize pharma, their ability to capitalize on the benefits of automation of the customer experience will be much more limited. As midsize pharma looks to deliver for patients, there are three areas we think they need to pay attention to:
- Addressing the tension of personalization and lean execution. Midsize pharma is well positioned to re-evaluate the terms of compliance for more modularized content, but they need to make sure marketing teams are ready.
- Investing in talent. As models shift, there’s a need for skillsets around human-centric design, as well as content and channel savvy that leaders need to focus on.
- Midsize pharma can wow the industry with novel partnerships for patients and providers. This should be an area of sustained investment.
When we talk about emerging pharma, we’re looking mainly at biotech organizations that deliver high-specialty or rare disease products, including gene therapies and other boundary-pushing therapeutics. While there are strong examples of biotechs bringing mass-market products to the market, we’re focusing on companies looking to launch products for more targeted, high-unmet need patient populations.
Emerging pharma and biotechs hire passionate, scientifically minded people that are often focused on solving some of healthcare’s toughest problems and most underserved patients. Many believe emerging pharma is deeply customer centric. They frequently have direct lines to key opinion leaders (KOLs) and know specific patients by name.
But as emerging pharma companies launch their first products, they will be focused on what customer centricity means from a single-brand level. They’ll also look at what makes sense for their brand today to ensure their product, their company and their future science are viable and profitable. Customer centricity in these organizations is synonymous with product centricity to the point that it’s challenging to decouple the two mindsets.
When we talk to emerging pharma leaders, we aren't hearing a lot of pre-commercial talk about having a customer centricity program. The lack of scale across products limits the value of creating such programs. But while they aren’t programmatizing customer centricity, they are actively thinking about how to engage with their individual customers and the broader customer engagement strategy.
With a mindset that the product and the customer are inherently linked, emerging pharma companies tend to be more open to exploring how they can add more value to their products through unique partnerships for services for patients. Their agile, digitally native nature and mission to scientifically serve unique patients has strong cultural alignment. This gives them a higher likelihood of success compared to big and midsize firms with other startups and tech partners.
Emerging pharma has an opportunity to reinvent the model and truly deliver on customer centricity, but there are forces working against them. Emerging pharma and biotechs do not have the benefit of scale. Their go-to-market approach typically starts with a focus on very big accounts, with an understanding of the parent-child mapping of the account network. As their product matures and they expand their portfolios to include their second and third launch products, they should start to make connections across customers and products.
As emerging pharma optimizes resource deployment, they will find value in off-the-shelf but customizable data and analytics solutions that enable them to understand their customers and optimize channel engagement strategy. As they continue to demand innovation from their providers in this area, we expect to see easy-to-leverage, customizable platforms become more available. This should help emerging pharma meet their scale and affordability needs.
Emerging pharma has a unique opportunity to do something different. They are unbound by the foundations of legacy pharma organizations, but they view the industry through a very narrow lens of one or two products. We see several ideas for emerging pharma to consider:
- Start with customers more broadly. In emerging pharma, marketing teams sometimes assume that all their customers are like their KOLs. In the absence of formal customer centricity programs, emerging pharma should continue to challenge the mindset that’s focused on product value rather than customer needs.
- Challenge the big pharma model of relying on in-house resources for things like marketing and patient program services. Leverage external partnerships instead, where it makes sense.
- Due to the lean nature of emerging pharma, every employee needs to pull significant weight to be successful. What we see again and again is that emerging pharma companies and biotechs hire seasoned big pharma talent to de-risk their anticipated launches. While this ensures that they follow the playbooks for launch best practices, it risks missing opportunities to explore more innovative models for customer activation. Teams should try to expand the talent profile to include not only those with launch experience, but also people with experience in building partnerships, operating in Agile working models and early advocacy development.
For pharma organizations of all sizes, the industry is at an exciting inflection point where the need to do more with each product will fuel innovation in favor of the customer. While customer centricity will manifest itself in different ways, organizations that define it clearly, invest in the right talent and explore new models of partnerships will be able to shift organizational mindsets and serve customers better.