Digital strategy is critical across the pharmaceutical value chain

Many regard the pharmaceutical industry as having a fairly simple business model. Therapeutic products are discovered or licensed in from other pharmaceutical or biotechnology companies, developed through a series of clinical trials, manufactured and finally marketed and sold. In reality, the pharmaceutical value chain is indeed fraught with complications. For example, the main customer of a pharmaceutical sales representative is the physician who prescribes the drug. Yet the drug is used by the patient and may be paid for by an insurer or another party. The situation is further complicated by the social, political and health economic environment in each country. While outside the scope of this discussion, we believe that the major trend in the pharmaceutical industry in the forthcoming years will be increasing pressures on margins. National and private healthcare providers around the world are working with tighter budget controls that are transferred into pressure on pharmaceutical prices and thereby pressure on margins throughout the entire supply chain [1]. Pharmaceutical companies will need to offset pressures on margins by lowering transaction costs and increasing revenues. Digital technologies are undoubtedly part of the solution set, as they introduce efficiencies and offer innovative channels for pharmaceutical marketing. Examples include the setting up of an e-supply chain and the disintermediation of wholesalers and pharmacists or a gradual changeover from large, expensive sales forces to new channels for e-sales [19].