Perhaps, these may well be the main contribution of the industry to society introducing products that enhance longevity and improve quality of lives around the world.
Pharmaceutical healthcare is a big business and every now and then there are laws being created to change the dynamics of the industry.
These laws pave the way for what I would call “Rxevolutions,” a change in the way companies operate and execute their strategy. I invite everyone to join me in examining “Rxevolutions” from the past and the immediate present as well as in imagining what may be in store for the pharmaceutical industry in the not so distant future.
In 1988, “The Generics Law” came into effect. It allowed relatively smaller pharmaceutical companies to manufacture and market off-patent drugs and required physicians to write the generic names of drugs in their prescriptions. It envisioned a more empowered Filipino patient with a low-cost alternative to common branded medicines but although the law is a landmark achievement for Philippine legislation, it has since been criticized for its rather disappointing implementation.
More recently, an attempt to revise the generics law through “The Cheaper Medicines Act” drew much opposition from the medical community. The law limits the patents of existing products not to mention opening the way for parallel importation among others. Over all, the law aims to increase competition that will lead to the lowering of drug prices perceived to be one of the highest in Asia and the world. While the effects of ‘’The Cheaper Medicines Act” remains to be seen, the potential entry of new competition will trigger rivalries among companies to escalate in the battle for market share.
This necessitates an increase in promotional expenditures that has always been the target of socio-civic groups that attribute marketing expenses to the limiting prices of drugs. Along with this, despite self-regulation among Pharmaceutical Healthcare Association of the Philippines members, delicate questions are constantly being raised on the nature of interaction between medical representatives (MRs) and their targeted doctors. Hospitals are swarmed with MRs and hospital administrators have adopted ways to control the access of MRs in their vicinities using no elevator policies, issuing IDs, including color coding and at times totally banning the MRs’ visit to hospital physicians.
What if these trends continue? What if the societal pressures persist? What if personally promoting to doctors become the next target and not anymore be allowed?
The answers seem complex and these questions raise even more questions for industry stakeholders to answer.
Taking away face time with the doctors would entail a new set of strategies including a new set of competencies for pharmaceutical companies. In this “Rxevolution,” they would need to adjust to a new battleground from the clinic to the drugstore, to a new strategy from personal selling to organizational partnerships, including more emphasis on channel promotions. While this may seem to level the playing field at the onset, I believe that this move will eventually be bad for competition.
The scenario described above demands huge investments toward retooling the company, rendering small players helpless in coping with the situation. More so, this scenario would ultimately favor companies that have proactively built partnerships with medical societies and invested in multi-channel strategies and technological linkage.
At first glance, multinational companies with deeper pockets and bigger clouts may yet again be the big winners.
Competition in the pharmaceutical industry is getting tougher and their world is getting smaller by the day. Companies need to constantly look out through the window and analyze their environments, more importantly they need to look at themselves in the mirror and ask—Are we ready for the next “Rxevolution”?
The author has been with the pharmaceutical industry as a marketing executive for more than 12 years. He is currently a student of Doctor of Business Administration of the Ramon V. Del Rosario Sr. Graduate School of Business, De La Salle University - Manila.
from Managing for Society Column Manila Times (Print & Web Editions), September 23, 2008 Enrique Antonio B. Reyes, RPh, MBA
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