Model for pharma growth?

imagesPOST SUMMARY: The model for pharma growth seems to be to merge or buy smaller biotech companies, but is this a viable business decision?AbbVie Inc. said late Wednesday it will buy cancer biotech Pharmacyclics Inc. in a $21 billion deal that returns the North Chicago, Ill., drug company to deal-making after backing away from a big tax-lowering takeover last year. This is not going to be the last big deal and, strategically, it’s going to put more pressure on sales to erase the debt taken on to purchase these companies.  It means more “sales driven” organizations which is going to result in less emphasis on patients.


DTC marketers are still chasing the elusive ROI in their marketing at a time when patients have a lot of resources to help them make key healthcare treatment decisions.  If you ask the majority of DTC marketers “what is the objective of your DTC marketing?” most are going to say “to drive new Rx’s”, but is that really true?

First, let’s look at the current healthcare marketing environment.  In research that I either led or was part of last year we found that patients do not make the decision to ask for an Rx based solely on a visit to a website; they usually visit several online health sites.  The extent to which drug websites are meeting patient needs tends to be very low as I have data on patients that visited and ranked 15 drug websites.  We asked “does this website, alone, want to make you ask for an Rx?”, the answer was that 90% said “no”.  When asked “what would you do?”, the vast majority said “do more research and see what others had to say”.


Now to an optimist this highlights a significant opportunity, but an opportunity that is going to require a bigger budget to get right at a time when mergers and acquisitions are forcing tighter financial controls.

I am also concerned about “sales driven” cultures.  Most of the fines levied against big pharma have come because people have put sales ahead of patients.

Maybe pharma can’t get out of their own way and in doing so, they are doomed to become just another industry, but unless organizational innovation is implemented mistakes and fines are going to continue and patients are going to find that pharma is not meeting their healthcare informational needs.