Pharma, Lean on Your Supply Chains to Improve Your Reputation

By Barry Blake | February 21, 2017 | 0 Comments

Supply ChainPower of the Profession

These days, pharmaceutical companies don’t enjoy the best of reputations. At a news conference last month, President Donald Trump opined that the pharmaceutical industry is “getting away with murder”. This may be a simple case of overheated rhetoric, but you do get a sense that the sharks are circling in the waters and have found public enemy #1.

In fact, a 2016 study by the Reputation Institute shows that pharma is at the bottom when it comes to industry familiarity and reputation among the public.Chart illustrating how pharma companies are falling behind in terms of reputation.This is dismal for an industry that most of us would depend on if we or our loved ones were faced with a life-threatening illness. “Getting away with murder” is something you’d expect to hear in reference to the tobacco industry, not an industry bringing life-saving therapies to needy patients.

Pharma’s poor reputation doesn’t sync with my experience in interacting with the supply chain executives managing global pharmaceutical supply chains. Most of the executives I know are humble people, who look at the role they play in healthcare as deeply meaningful. And they love healthcare. They certainly aren’t monsters (even if the industry they love is perceived as monstrous).

What’s the Root Cause of this Reputational Weakness?

On the surface, the main culprit is pricing. There’s a total lack of clarity for the public when it comes to skyrocketing year-over-year drug costs. This is magnified by the number of obvious outrages that truly make the public’s blood boil; for example, in the US, little-known Marathon Pharmaceuticals slapping an $89,000 price tag on a drug that would cost $1,200 per year elsewhere. (Also, Martin Shkreli is still out there Twitterizing his life for the benefit of humanity.)

Pricing issues, however, at least in my mind, are symptomatic of the struggle that pharma is facing to change in an environment where value is no longer the sole domain of the pill or product, but a whole host of factors that other industries would characterize as the ‘customer experience’. The strength of the customer experience, again in other industries, is proportional to the strength and creativity of the supply chain organization.

No one should underestimate the sea change of this value shift. Imagine the change that must occur in a sales rep who for years and years has simply moved a product into the market, and whose only thought of supply chain was having an endless inventory pool to draw from. Expecting them to seamlessly shift to value selling and supply chain partnership is a lot to ask.

Supply Chain can Help Increase Industry Familiarity

The other struggle highlighted in the Reputation Institute’s study is that people don’t really know pharma. Ask a pharmacist at a local CVS or Rite Aid where a product originated, and he or she will probably mention a distributor, not a manufacturer.

This strikes me as a clear supply chain opportunity. If it’s true that customer loyalty and supply chain ingenuity are directly connected (and I think Amazon has proved this), then supply chain organizations should begin owning more and more of the story of the value they can bring to an industry undergoing massive change.

Patient and physician preferences are changing, metrics on value are changing, access points are proliferating, and new technologies are all changing the type of value that supply chain brings to the table. Pharma supply chains have a real opportunity to reduce the lack of understanding that exists around these fundamental changes occurring in the broader healthcare industry. At the same time, the menu of services that supply chain can deploy will become clearer, hopefully leading to changes in regulatory schemes to speed adoption of these services.

At our 2016 Live Americas event in Miami, Pfizer delivered an inspiring keynote presentation that mapped in detail how its supply chain worked as one to bring a life-saving cancer therapy into the hands of one patient. Anyone who witnessed it left with a new understanding and appreciation of supply chain’s role in healthcare.

It’s up to the industry as a whole to continue to refine the story of supply chain and lead the change we desperately need. Pharma can’t be public enemy #1 – and supply chain can help to change this perception.

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