China As a Digital Transformation Sandbox: a Prescription for Pharma
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China as a digital transformation sandbox: A prescription for pharma multinationals Pharma companies can test their digital commercial engagement models in China—the world’s largest digital transformation sandbox—before scaling them for global success. China’s healthcare market is undergoing a paradigm shift. Long term vision and regulatory reform are the catalysts for a more affordable healthcare system, changing the growth prospects for mature, post-exclusivity drugs of multinational companies (MNC) and forcing a shift from hospitals to retail and online channels. Favourable regulatory changes, such as accelerated approval1 and more frequent and dynamic adjustment of the National Reimbursement Drug List (NRDL), are creating unprecedented opportunities for faster launch of innovative drugs and a significantly larger market potential. The advance of digital technologies and healthcare consumerism are altering the dynamic of China's healthcare system and redefining the path to success for pharmaceutical companies. At the core of these changes, a digital healthcare ecosystem is emerging in China, empowering innovative commercial models in the pharma industry. Leading pharma companies are capitalising on that. China's technology eco- system with at the heart engaged and eager consumers, patient embracing digital and mobile technologies is creating a unique base for this change. They expand their influence by partnering with ecosystem players and implement consumer centric care models that leverage digital interaction platforms. New offerings, engagement models, and technologies are being rapidly tested in the Chinese market, and companies are exploring digital solutions to address unmet needs of health consumers. China's digital transformation brings value to multinational companies beyond solving their growth ambitions in China. They can use China as a testing ground for novel ideas, product launches, and reimagined engagement models. It will enable them to create and test new offerings and services in a swift and agile manner, and accelerate commercialization in China. Done right, it will also enable fast scalability of products and ideas into other markets. 1 China as a digital transformation sandbox: A prescription for pharma multinationals The opportunity in China for digital transformation of pharma models Several elements make China China is also building the necessary conducive to the testing of new infrastructure to enable the COVID-19 accelerates healthcare products and digitally ecosystem digital transformation. healthcare system upgrade reimagined commercial engagement China is committed to being at models. The increasingly favourable the frontier of 5G development The COVID-19 pandemic may market and regulatory environment and application, a key enabler for have changed forever the ways enables faster launch of products, connectivity in the digital age. A recent we receive healthcare in China. greater customer intimacy and better example is the use of 5G technology Multiple virtual healthcare customer engagement, leading to in combating COVID-19, with thermal solutions such as Alibaba’s CT differentiation in a competitive market. imaging to support contagion Image Analytics and epidemic monitoring, remote imaging diagnosis prediction have been launched In addition, China is one of the leading platforms, and SMART medical robots to combat the COVID-19 crisis. countries globally when it comes to for quarantine patient care. With We observe an accelerated digitalizing all aspects of life—from the government's newly announced adoption of healthcare mobile payments and e-commerce to New Infrastructure Stimulus Plan, technologies, and a much telemedicine—and healthcare is no 5G network construction will be a greater interest from pharma exception. Chinese consumers are focal point for investment across companies in enhancing their willing to try and test new products regions, further accelerating digital preventative care offerings. and services on their phones2. infrastructure in China. We also expect collaborations Patients are tech-savvy and hungry between companies looking to as doctors tend to be digitally rather exploit business opportunities well equipped. Hospitals, pharmacies, throughout the healthcare value and insurers are also changing their chain—from prevention and operating model to embrace the early detection to treatment digital trends to stay equipped for follow-up and monitoring. the next growth opportunity. Pharma companies need to do the same. 2 China as a digital transformation sandbox: A prescription for pharma multinationals Consumerism and advances in tech As for the mature products, faced drive new commercial engagement with significant pricing pressure from strategy VBP (Volume-Based Purchasing) and The recent regulatory reforms aimed prescription outflow from hospitals, at increasing accessibility and pharma companies have to expand affordability of healthcare for their omni-channel presence to consumers are creating opportunities reach the huge lower-tier market for pharma companies along with and non-hospital channels. They implications for their commercial have to deepen their patient-centric engagement strategies. With the new engagement with a view to improving dynamic adjustment of the NRDL, patient access and overall outcome to innovative drugs can be included provide value beyond just drugs. on the list soon after launch. Even those products already in the market could benefit from relaunches once added to the list. Many leading multinational pharma companies have set aggressive launch targets in the next 2-5 years as innovative drugs becoming their growth engine in China. With anticipated intensive competition in a crowded market from their global and domestic peers, pharma companies need to formulate post-NRDL relaunch strategies and re- think their delivery channels and their digital engagement model to maximize launch effectiveness3. 3 China as a digital transformation sandbox: A prescription for pharma multinationals Four areas of digital transformation where pharma companies can create value Based on our experience from working a lack of targeted engagement and low data and advanced analytics to target with pharmaceutical companies marketing ROI. Having recently come KOLs (Key Opinion Leaders) more in China, we have identified four under pressure from an increasing effectively and involve them in their emerging areas where companies can number of approved innovative drugs, campaigns and conferences. The MNC create value in the healthcare system: pharma companies are in need of a obtains the data through both its own more cost-effective product launch channels and third party suppliers, Launch excellence and sales and sales strategy. including academic publications and effectiveness citations, EMRs, HCP forums and Traditionally, pharma companies in They can achieve this by leveraging social platforms. It also partners with China have relied on representatives big data and technology. They can one of China's top tech companies to drive sales. Not only was this open also learn from the success of the to outsource basic data processing to potentially compliance risks, but retail industry, which puts customer in order to focus on selection of data more importantly it suffered from value at the center. For example, the attributes and solution development. unclear market segmentation and commercialization strategy in China of identification of growth opportunities, a leading MNC has been to deploy big Figure 1. Traditional barriers to launch excellence and sales effectiveness Pre-launch activity Launch excellence Journey Launch room Patient and Opportunity Patient and Patient and Competition Salesforce set-up HCP persona and HCP targeted HCP feedback intelligence optimization construction KPI definition marketing collection Infrequent Vague market Looking Slow Lack of CRM Infrequent Fixed data update, segmentation backwards to clinical trial use, limited competitor account- contradicting using limited set goals, no recruitment, internal data, progress based sales insights, data, launch touchpoint- poor HCP clinical trial updates, force, costly lackluster BI focused on TA specific education, lack data not used complicated market Pain points dashboard (therapeutic opportunity of targeted to enhance cooperation expansion area) instead of hypotheses, content, engagement for combined to smaller patient journey numerous KPIs no channel therapies locations without clear prioritization focus 4 China as a digital transformation sandbox: A prescription for pharma multinationals Pharma companies should not restrict can leverage technologies such as its approval date, which can be their sources of big data to medical voice recognition CRM tools that obtained from the launch committee’s records and HCPs’ practice data. enable representatives to log in previous success records. In this They could tap into non-medical data timely HCP feedback, and can use context, scenario planning and war from proprietary channels or third live interaction technologies during game exercises are useful tools for party data sources accessed through medical conferences. Natural language predicting the moves of competitors. partnership or acquisition—for processing (NLP) techniques example, doctors' social platforms can then be used to carry out Engagement with healthcare HaoDaiFu and DingXiangYuan or sentiment analysis. professionals proprietary WeChat Mini programs Instead of adopting a systematic, top- and apps.