Pharmaceutical commercial models are in a state of flux. As rising costs, stricter regulations, and healthcare provider (HCP) consolidations exert immense pressure, pharmaceutical companies are being forced to rethink their strategies and consider new commercial models to deliver drugs to HCPs, patients, and payers.
Commercial models that previously worked for pharma relied on a large sales force with in-person to drive sales, and lengthy timelines for drug discovery and commercialization. However, this scenario is evolving, and companies are realizing the ineffectiveness of conventional approaches.
Today, HCPs are demanding more personalization in the engagement process with greater emphasis on scientific information, particularly with the rise of specialty drugs and rare disease treatments. With less time for face-to-face engagements and a higher adoption of digital technologies, HCPs prefer targeted and data-driven information across multiple channels.
Pharma operations are evolving to embrace patient-centricity at every stage—from clinical trials to drug delivery. Patients now play an active role in clinical trials and demand better outcomes, more transparency and tailored approaches to their care.
It seems this is a good time for pharma companies to reassess their existing commercial models and embrace modern approaches to remain viable and competitive in the market.
Modern pharma commercial models are built on strategies that align with evolving market dynamics, stakeholder expectations, and digital technologies to drive competitive advantage and meet the needs of healthcare providers, patients, and payers. Below are seven core elements of a modern pharma commercial model:
Drug discovery and clinical trials are costly and time-consuming, spanning an average of 12-15 years, with newer areas of medicine like gene therapy taking decades. Besides rising costs, pharmaceuticals are facing scientific challenges.
Lab models often fail to accurately predict how drugs will behave in humans, causing trial failures, while limited understanding of disease mechanisms makes it harder to develop effective treatments.
To overcome these hurdles, pharma must lower costs and improve research efficiency by adopting new technologies, like AI.
AI and machine learning can aid drug development by:
Facing recruitment and retention issues, increasing complexity and escalating costs of clinical trials, many pharmaceutical companies are now beginning to embrace patient-centric approaches.
This involves designing trials that align with the patient’s needs, preferences, and everyday experiences, using patient-centric engagement strategies and focusing on patient-reported outcomes to assess the drug’s impact beyond clinical measures.
AI can be effective for patient recruitment to identify eligible participants, ensuring diverse populations are represented, which is increasingly important for patient-centric trials.
Better trial design also integrates clinical and real-world evidence (RWE), generating insights valuable to HCPs, patients and payers, while streamlining the drug development process.
Besides streamlining drug development, achieving future commercial success for pharma depends on bold transformations. This requires deliberate change management strategies built on the foundation of patient-centricity and integrating the evolving physician landscape.
Implementing top-down change and establishing agile leadership demands alignment across various departments, clear communication objectives, employee participation, and transparent Key Performance Indicators (KPIs) to drive accountability and performance visibility. But most importantly, it requires a shift in mindset—
Many companies are also focusing on upskilling their employees and sales force through continuous training, especially as they adapt to new processes, technologies and digital tools.
An efficient commercial model requires nimble teams capable of collaborating across departments so that knowledge, insights, and information are shared seamlessly across the entire commercialization process. Early integration of clinical and commercial teams across key development phases and workflows enhances decision-making and ensures the commercial viability of drug development.
It is also important for seamless task and responsibility handoffs, helping teams move efficiently across various complex commercialization processes, especially when activities such as market access, product launch and patient engagement require close cooperation amongst different functions.
Organizing change management for commercial success is critical as pharma navigates rising demand for personalized care and HCP engagement with a shift towards digital solutions—from CRM systems and data-management tools to optimized processes that support personalized HCP engagement and patient care.
Streamlining launch marketing efforts for drugs and treatment products reduces delays, disruption and errors, ensuring products reach the right audience efficiently.
A key strategy is refocusing sales teams on high-value activities, such as engaging HCPs with specialized knowledge, particularly for specialist and rare disease products.
As the reliance on field sales teams decreases, with repetitive tasks delegated to digital tools, pharma can deploy more agile teams to prioritize data-driven engagements and focus on building meaningful personalized interactions with HCPs.
AI-powered platforms, CRMs and digital tools provide real-time insights into engagement metrics, allowing sales teams to make quick adjustments while focusing on strategic interactions and ensuring consistent messaging across all channels of engagement.
Medical affairs play a key role in bridging the knowledge gaps among HCPs by enabling scientific exchange across various platforms. However, with accelerated digital adoption in healthcare and an increasing emphasis on patient centricity, medical affairs teams are now adopting technology to provide real-time, evidence-based information through digital platforms.
Integrating medical affairs and marketing functions with technology ensures cohesive communication, allowing both teams to collaborate seamlessly on campaigns that align with HCP and patient needs, and offer consistent messaging with better compliance.
Personalization is key in all these efforts, made possible with data analytics, behavioral science, and AI. Technology also supports seamless omnichannel marketing through multiple touchpoints—such as email, webinars, mobile apps, and social media—delivering consistent, valuable content for both HCPs and patients.
With data-driven personalization, pharma can reduce mid-launch adjustments, leading to smoother commercialization and more effective product launches.
For customer-centric commercial models to be successful, pharma companies must listen and learn from customer engagements and behaviors to create personalization at scale. By centralizing customer data across connected platforms, companies can gain a 360-degree view of HCPs, patients, and factors that affect market dynamics, enabling them to make better customer-centric decisions.
An integrated data system offers complete insights and knowledge about customers and their context. It enables personalized data-driven strategies, seamless communication, and consistent messaging across products, functions, and teams.
Predictive analytics is another vital decision-making tool for:
It helps pharma optimize supply chains, target high-value HCP segments, and tailor HCP marketing efforts effectively, allowing for quicker course correction on campaigns and boosting return on investment (ROI).
Tracking ROI also allows pharma to assess the effectiveness of their strategies and evaluate the performance of various commercial activities. These insights are valuable in optimizing campaigns and allocating budgets, allowing pharma to focus on high-impact activities. Transparent ROI also fosters accountability in teams, encouraging them to align with common objectives.
Integrating ROI tracking with predictive analytics, along with leveraging AI and machine learning algorithms for real-time insights and operational planning, can further enhance strategic decision-making and drive commercial success.
Today, commercial success is not possible without focusing on customer-centricity, largely driven by increasing competition, fewer blockbuster drugs, and narrow patient populations, especially as rare diseases and specialty treatments now dominate much of the pipeline.
At the same time, the shift toward value-based care means companies not only offer products but provide integrated solutions that address both clinical and lifestyle needs, enabling companies to increase market access and remain competitive.
As pharma continues to interact with multiple stakeholders—HCPs, patients, payers, and key opinion leaders (KOLs)—each with distinct needs and playing a critical role in treatment decisions, it becomes essential for companies to offer customer-centric experiences to all stakeholders.
Customer-centricity for pharma means aligning products, services, and communications with the needs and preferences of customers and offering personalization at every touchpoint. Essentially, it is about providing value beyond just the products.
To successfully transform into customer-centricity, pharma must change both internal and customer-facing operations, while aligning business strategies with the evolving needs of all stakeholders.
Here are some ways many pharmaceuticals are embracing customer-centricity:
Lifecycle management (LCM) is essential for maximizing the value of pharmaceutical products throughout their entire lifecycle—from conception to end of life (EOL)—including design, development, production, commercialization, and ongoing support or optimization.
LCM planning should begin early during the New Product Planning (NPP) phase to align commercialization with strategies that extend a product’s relevance and profitability throughout the life cycle.
In the past, pharmaceutical companies primarily focused their LCM efforts on the period from drug launch to the expiration of patent protection. However, modern LCM strategies focus both on achieving market success during the patent-protected period and on sustaining value during the post-exclusivity phase, where up to 30% of lifetime sales can still be generated.
With LCM strategies, companies can still generate revenue by leveraging the residual value of the product and planning its transition to mature or legacy status. This involves fine-tuning legal and intellectual property strategies, and adjusting the pricing, marketing mix, and sales tactics to remain competitive in a landscape increasingly dominated by generics.
However, pharma can minimize the impact of these challenges and set themselves up for commercial success by developing data-driven commercialization strategies that integrate effective market access initiatives.
Line extensions—such as new formulations, indications, or delivery methods—can improve patient engagement and maintain pharma’s commercial viability.
Strategic LCM efforts also involve tracking market dynamics and planning updates to meet the evolving landscape.
Patient access to drugs and medications can be hindered by many barriers—from lengthy clinical trials and delays in drug approval to regulatory hurdles and post launch coverage restrictions.
With early LCM planning, pharma can explore “beyond-the-pill” innovations, such as digital therapeutics, biomarkers, and new drug delivery mechanisms that differentiate the product in the long term and enable companies to enhance their product offerings beyond traditional medications.
Market access for pharma involves strategies and processes that ensure patients who need a particular drug can receive it and that and the drug is covered by payers, such as insurance companies, government programs or healthcare systems. It focuses on demonstrating the value of the drug to stakeholders through clinical outcomes, health economics, and real-world data, while establishing competitive pricing and overcoming regulatory and access barriers.
To ensure availability and affordability for patients, many companies offer creative reimbursement strategies, such as value-based contracting and pay-for-performance programs. These strategies link the cost of a drug to its clinical effectiveness in the real world, aligning interests of pharma, payers, and healthcare providers by focusing on patient outcomes rather than just the volume of drugs sold.
Further, reimbursement strategies encourage collaborations among stakeholders—incentivizing pharma to develop highly effective treatments, motivating healthcare providers to adopt therapies that demonstrate clear value and reducing financial risks for payers.
With outcome-based reimbursement, pharma can improve patient access and promote higher quality care without undue financial burden on patients and healthcare systems.
Pharma companies often face pushbacks from employees and leadership, as the sector is deeply rooted in traditional processes and regulatory compliance.
Employees may perceive new technologies or strategies as disruptive, leading to fear or discomfort over the changes. Leadership may hesitate because of perceived non-compliance or fear of failure.
To address internal resistance, organizations must foster a culture of change by communicating clear objectives and benefits, gathering feedback from employees, and promoting cross-department collaboration.
It is equally important to align leadership with the benefits of new strategies so that leaders can demonstrate their commitment and encourage employees to embrace the transformation. A phased rollout helps employees adapt to new processes, while giving them the opportunity to provide feedback.
Training employees to utilize new technologies and foster a digital-first mindset is crucial. Comprehensive training programs improve employee competency and ensure smooth adoption of digital tools and AI-powered platforms, empowering them to understand how technology streamlines processes and improves outcomes.
Regular upskilling initiatives help employees stay current with evolving technologies and industry changes. By aligning training with compliance frameworks, employees can responsibly use digital tools and mitigate any regulatory risks.
It is also essential to define clear metrics when adopting modern commercial models to track the success of commercial strategies, innovations, and digital tools. By defining metrics—such as sales growth, time to market, customer engagement, patient outcomes and market access—pharma can evaluate the impact of their strategies at each stage and advance their growth in the market. Companies can avoid risks, gain leadership buy-in, and promote agile and efficient decision-making with clear metrics to track.
Balancing innovation with compliance is a critical challenge as the pharma industry operates under strict regulatory frameworks. New technologies and digital strategies can invite risks related to data privacy, advertising regulations and clinical trial transparency.
To balance innovation with compliance, pharma must:
Integrate compliance from the start of the innovation process.
Ensure regular training for employees so that they remain aware of regulatory changes and are less likely to violate regulations.
Use government frameworks to monitor performance and compliance.
Develop KPIs to assess progress and adherence to regulations.
Have open and clear communications between regulatory bodies and pharma to navigate gray areas.
Adopting modern pharma commercial models requires integrating key elements—such as customer centricity, market access strategies, lifecycle management, and digital-first approaches—while developing strategies to address the challenges pharma can encounter during the transformation. By evolving their commercial models, pharma has the opportunity to improve efficiency, enhance patient outcomes and remain competitive in a rapidly changing market. Now is the time to assess your current operations and adopt modern pharma commercial models to align with evolving market realities.
Newristics is the market leader in pharma messaging-related services, including content development, market research, messaging analytics, and more! Combining the power of behavioral science and messaging AI, Newristics optimizes omni-channel messaging for the Top 20 out of 20 pharma companies and 100s of pharma brands. Reach out to learn more!
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01 Feb 2024
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