Blue Sphere Health

Posts Tagged ‘pricing’

Rivers of Data

Photo: Chris BrownThe healthcare world of tomorrow will not be the same as the one we have today. As the world gets more affluent, the demand for healthcare will continue to outstrip capacity unless we change the way that it is delivered. This simple fact will drive a revolution in business models across pharmaceutical, medical device, nutrition and related industries. Three of these innovation streams will form big tributaries in the global river of healthcare data that swells by the second. The first area is traceability. Reaching billions of new healthcare consumers effectively and at a price they can afford will mean that the old, inefficient, slow ways of innovating need to change. Pharmaceutical companies are looking to the developing world as the engine of future growth. They sell there because increasing affluence is creating a demand for their products, but they also manufacture there because residual low labour costs make the economics attractive. But exposure to counterfeiting and lack of infrastructure can also threaten the quality of their products. Protecting healthcare products as they move around the increasingly global supply chain will require the use of modern tracking technologies. The next few years will see a boom in serialization – putting codes onto packs – that will generate investment opportunities as well as massive amounts of information to be stored, shared and queried. Secondly, what about the customer? In developed markets, long the cash cows of the healthcare industry, inertia and complacency has allowed business models developed in the fifties to perpetuate into the present day. The industry still focuses on the first sale, not on lifetime value and customer retention. Pizza companies are more commercially innovative than pharma. They recognise that it is not the single sale that brings the big profits, it is the delighted customer who comes back again and again. There are investment opportunities in companies that are improving the appalling rates of compliance/adherence/concordance – the three terms used to describe the process of persuading or reminding people to take the pills that they have been prescribed. The WHO has estimated that up to 50% of people on long term medication do not properly follow their medication regime. If people were forgetting to shave, do you think Gillette would be investing in ways to help them remember? I think so. The third area of investment opportunity and growth potential is the rise of value-based pricing. This idea, or variations of the concept, is starting to pop up around the world as a reaction to high healthcare costs. The theory is that large healthcare purchasers (governments, insurers etc) pay for results and medical outcomes instead of paying for products. This simple but seismic shift in emphasis will have a profound effect on the way that healthcare companies do business and will hugely increase the need for accurate data. The unifying theme between the three areas of serialization, adherence and value-based pricing is data – lots of it. Increasing data flow and the need for number crunching on a massively larger scale is an opportunity that I will explore further in future posts. The next twenty years will be a challenging environment in healthcare and the services around it, but I have a hunch that the next Google or Facebook could well come from this turmoil.
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Pharmaceutical Anti-Counterfeiting

Combating the Real Danger from Fake Drugs has become a must-have primer on anti-counterfeiting and is widely used by drug companies, regulators and others. The book covers the legal, strategic and political issues as well as the technical counter-measures such as process control, digital serialisation and physical security.

Pharmaceutical Anti-Counterfeiting book