Internet trends like big-data, social networking, and mobility aren't just affecting various industries, they're changing them in dramatic ways. And companies that don't understand this metamorphosis are bound to get left behind.
That's one takeaway from a recent brief report from McKinsey & Company that outlines how the Internet data explosion is changing the pharmaceuticals industry.
In "Biopharma in the coming era of 'connected health'," several of the consulting firm's authors describe how demand for more and better healthcare information is bound to affect suppliers of medicine and consumer healthcare services:
Information transparency will allow customers, regulators, and competitors to understand the performance of biopharma products as well as, or even better than, the manufacturer does...
This transparency will probably drive down the margins of biopharma's innovative products by restricting access, challenging reimbursement rates, and highlighting safety issues.
The analysts compare the shift that social media, big-data, and mobility are forcing on the biopharma industry with what occurred in the computer industry over the last 20 years: "Value shifted away from the computer industry's physical product -- hardware -- to the software and services surrounding it."
The McKinsey & Co. analysts advise biopharma companies to take action now in order to be prepared for making less from medicines and consumer health services. They suggest investments in big-data and analytics and in new models of collaboration and partnerships.
By allocating resources in these areas now, McKinsey says that biopharma firms will be prepared to engage in alternatives to their traditional revenue models.
For example, biopharma firms are well positioned to track and predict what medical protocols will fit specific populations or patients. They can also offer monitoring services for use once medicines have been prescribed. And by managing the flow of insurance information, companies can create new sources of revenue.
The point is well taken for leaders in any industry sector: Social media, mobility, and big-data are changing the very nature of business, and taking steps toward accepting and building on these new realities are essential to corporate survival.
Great points, Mary. Your emphasis on the opportunities in analytics is right on target as a strong value proposition. It follows the trends you have outlined where profiting solely from goods is evolving into more services, and those services involve industry expertise and consumer information.
It truly is a new business model and the leading companies will follow your prescription.
Big data is surely going to be of great assistance when it comes to pharmaceutical research, just as its playing a role in genomic analysis and clinical diagnosis.
Yes, being more connected and interactive has surely changed a few industries. Good point. But big data, along with social networking and mobility, is forcing some dramatic shifts. Sure, it has to do with improved communication and connectivity. But the analysis factor goes beyond that, I think.
I wonder, though, if this is really something new. Remember the consumer revolt a few months back when Bank of America tried to instate (some might argue reinstate) a $5/month fee for using debit cards for transactions.
I was struck by the similarity of that consumer revolt with the idea of doctors and medical providers (among other tasks) challenging reimbursements. You correctly alluded to it, I think, when you referred to the effect on the IT industry in first few years after the IT/Internet boom and bust.
It seemed like the authors of that study thought this was something new. Perhaps within the covered sector, but I think it's more about connectivity, interactivity, than about big-data per se.
Yes, it sure seems that management advisors are really pushing enterprises to start moving into position relative to big-data. Since a strategy around analytics takes time to implement, it's going to be important to get started before the trend builds so much momentum that it will be tough to build the rocket when everyone else is already on the moon.
I see research and development as one of the sectors under Pharmacy that will benefit a lot from big data. The mobile monitoring, ordering of drugs, and other kinds of trackable transactions will enable a lot of patterns that were previously not analysed to be and this will give a great push towards development of new products.
And by managing the flow of insurance information, companies can create new sources of revenue.
@Mary, I feel companies have to adopt and start learning how to use Big-Data because competition is very tough. Companies which will not use Big-Data to create new sources of revenue will miss out on huge oppurtunity.
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