It used to be that pharma companies could start with the new drugs—their inventions—when planning their go-to-market strategies, but that inside-out approach doesn’t work in an increasingly customer-centric marketplace. It’s time for drug manufacturers to transition from their inside-out business models to an outside-in approach, realigning their structures and rethinking their research and resources to better assess and adapt to the changing healthcare ecosystem, and to better meet their stakeholders’ evolving needs.
Taking an outside-in approach is about moving away from the traditional pharma commercial model of starting with the product or innovation and rather starting with the needs of customers and stakeholders, including patients, providers, payers and PBMs. An outside-in approach involves taking a step back to look at what is going on outside the laboratory.
That’s challenging for an industry that has historically been internally focused—from drug creation/innovation through clinical trials and on to regulatory approval. In the past, it was only after that internal process was complete that pharma companies would turn their attention externally, targeting physicians who, at the time, were the driving influencers of a drug’s success.
According to Pratap Khedkar, a managing principal at ZS and leader of the firm’s global pharmaceutical practice, pharma’s evolving customers are one of many driving forces behind this transformation. “The industry needs to change because the customers are also changing,” Khedkar said. “Payers and providers are trying to evolve as they see the healthcare ground shifting under them, and as a pharma company, you better get ahead of some of those effects before they reach you. The industry will look very different 10 years from now.”
The U.S. healthcare system as a whole is evolving, and regardless of which way the regulatory winds are blowing, healthcare will continue its shift from volume to value, according to ZS experts. Even as pharmaceutical customers’ mandates continue to shift and their performance metrics remain in flux, a move to the outside-in approach will allow pharma companies to evolve and adapt in line with their customers’ changing needs. It will enable pharma companies to think about what value they’re bringing to the various stakeholders within the healthcare ecosystem: value to patients in the form of improved outcomes and more affordable treatments; and value to providers in the form of improved patient outcomes, which will help providers meet new outcome-based performance metrics and standards for reimbursement.
It requires companies to look beyond the pill and to think more holistically about how to become truly customer-centric. “That absolutely has to be the path,” said Paul Darling, a principal at ZS who leads the firm’s efforts on understanding how the U.S. healthcare system is evolving and how to do scenario planning. “It’s going to be a journey to unwind and unlearn the old view so that you can learn the new, nimble centricity. You can’t do it all at once, so identify the customers and teams that are ready to do that migration so you can learn from that process.”
To learn about the four fundamental steps for transitioning to an outside-in approach—and for more insight into how pharmaceutical companies can reinvent the way they go to market—check out ZS’s new e-book, “Rethinking Pharma From the Outside In.”