Healthcare & Life Sciences

Strategic Growth in Light of Healthcare Market Commoditization

Introduction
As healthcare markets mature, an increasing number of medical device, diagnostic, and pharmaceutical/ biotech manufacturers are dealing with product commoditization and competition from low cost competitors.  Manufacturers face challenges from a new slate of traditional and non-traditional competitors, including fast followers, efficiency-minded “distributor”-like organizations, reprocessers, and generics/biosimilars to name a few.  At the same time, customers are consolidating decision-making processes, and using group-purchasing organizations, and evolving health system-driven processes to increase purchasing power.

Healthcare Market Commoditization Framework

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Healthcare Customer Segmentation Framework

Healthcare providers and health plans are planning for and reacting differently to the continued shift from a fee-for-service to a value-based care environment.  Many sophisticated health systems are aligning their strategies, infrastructures, and staff to be at the leading the charge of this movement, while others are maintaining the fee-for-service status quo until external pressures force a change. 

These two behavioral extremes and the wide variety of intermediate examples have complicated traditional pharmaceutical, device, and diagnostic manufacturer sales and engagement processes, as manufacturers are no longer selling into a relatively homogenous set of customers.  This means different solutions and engagement strategies are often required for different customers based on their internal goals and priorities.

Beacon is often asked to support its clients in addressing this challenge through market and customer segmentation studies.

A Market-Driven Approach to New Product Development

The advent of patent cliffs, value-based care, and increasing cost pressures in the face of heightened levels of investment have spurred numerous articles evaluating the healthcare industry's innovation gap. The task of filling this gap while remaining focused on near-term shareholder value has increased M&A activity across the industry. Although M&A offers short-term benefits designed for immediate survival, this approach may yield less long-term value when companies encounter difficulties extracting future growth opportunities. The principal challenge, as part of the overall value creation strategy, is to fire up the innovation engine of a firm by fostering more robust product development efforts that can both enhance internal research programs and supplement other models of growth. But what are the key forces that make this effort so difficult for pharmaceutical and medical device companies today? This white paper discusses some of the key challenges surrounding new product development efforts in the pharmaceutical and medical device industry and presents a market-driven model The Beacon Group (Beacon) utilizes to help facilitate product innovation

Customer Engagement Framework

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Customer engagement in the healthcare space is becoming increasingly complex due to the rise of new decision-makers and influencers at provider organizations, increasing customer expectations for wraparound or supporting service offerings, and a growing number of channels through which manufacturers and end-customers can interact.  This complexity has made it more difficult for pharmaceutical and medical device manufacturers to prioritize their customer engagement efforts across potential activities.  Manufacturers know there are multiple levers that can be used to create customer value and drive a return on investment, but they often struggle with prioritizing these activities alone or in combination.  Through our extensive work with clients in this field, Beacon has developed a Customer Engagement Framework to assist pharmaceutical and medical device manufacturers in the sales and marketing process. 

What Are ACOs and Why They Are Emerging

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ACOs, or Accountable Care Organizations, are healthcare networks that seek to reduce costs by increasing the efficiency and efficacy of care and streamlining the healthcare process. Beginning in 2012, Medicare service providers that agree to take accountability for over 5,000 Medicare beneficiaries over a 3-year period and allow beneficiaries to participate on the governing board will be able to apply for the ACO designation.

The Growth of the Economic Buyer

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Shifting buying patterns and behaviors have impacted all companies selling into the hospital or office environment. The rise of the economic buyer, committee-based purchasing, and shifting power dynamics have forced engagement models to be reconsidered. This white paper raises some key issues regarding the role of the economic buyer, and examines the implications for the medical device industry in particular.

Network Enablement and the Evolution of Health IT

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Over the past 10 years, technology innovation has been a driving force behind major advancements in healthcare delivery in the U.S. and around the world.  Data collection and storage through Electronic Medical Records (EMRs) promises faster, safer, cheaper patient management, while data analytics and software solutions have already helped to identify best practices, establish new standards of care, improve accuracy of patient diagnosis, and enable better decision-making.