The healthcare industry in America is always expanding. The statistics for healthcare show that by the year 2021, the industry should bring in an incredible $8.7334 trillion, up from $7.077 trillion back in 2015. Pharmaceutical companies have long been poised to benefit from this growth. They seek to expand to take advantage of the aging of the populations not only in the U.S. but in all of the developed world.
Yet with great growth and opportunities come equally great challenges for next year in 2021. The disadvantage to the pharma business’s ongoing expansion is that it has become a victim of its own complexity. Increasing demands have made it much more difficult to manage the various tasks, objectives, and workflow on a practical level. We look at seven of the most common challenges that the health care industry is facing and needs to solve in 2021 in this article.
The Research and Testing of New Drugs Is Rife With Inefficiencies Today
New drugs go through a long-term pipeline to come to the marketplace, in particular in developed countries with rigorous oversight and regulatory agencies (like the FDA in America). Unfortunately, a growing challenge surrounds the inefficiencies that have increased in both the research and testing phases of new medications. These problems range from issues with compliance to missing critical deadlines.
Noncompliance has become an especially costly issue that plagues many of the large companies in the industry today. This ever-present threat now hangs over the pharma industry and individual companies around the world. The sums involved range from $10,000 for preventative and corrective actions to anywhere from $20 to $100 million for changes implemented following the receipt of a warning letter.
Transforming Inventory Management
Inventory remains a critical issue in the pharmaceuticals business. Experts have observed that the biggest problem arising from it results from inefficient inventory systems. Much of the industry is still using a manual inventory management system. It means that they do not have a way to consolidate their information in a single system and place. The manual inventory system prevalent in most pharma companies today is simply counter-productive.
Manual inventory and delivery systems also allow for all too common human errors. These mistakes cause faulty inventory counts and an imbalance in both supply and demand. Manual counting requires significant effort and time, causing the process to be entirely inefficient.
How To Convince Management to Spend on Improvements to Delivery Systems
Delivery systems are an extension of the inventory management challenge. The inefficiencies of accurately getting inventory out are a problem that can not be ignored for needed future improvements in corporate productivity. One solution that has been proposed is to utilize an RFID Radio Frequency Identification that has been demonstrated to boost accuracy in inventory from between 70 percent and 97 percent.
RFID tracking is able to massively transform the delivery system (and inventory management system) for firms in the business that can not keep track of their inventory and a way to get it more efficiently to the end markets and doctors’ offices. Such RFID tracking could eliminate the needs to manually track the arrivals and departures. Its implementation requires software system improvements to support this type of RFID tracking.
Improving the Customer Experience
Customers are expecting and demanding more from pharmaceutical companies today. It is necessary to begin understanding these issues and addressing them. This is not just about the pricing of new and existing drugs. Improvements are needed with consumer interaction so that it becomes streamlined and convenient to the point that their healthcare transforms into a natural part of everyday life for families and individuals. Currently, customer service and interaction are stagnant.
Dealing with Increasing Amounts of Data
Big Pharma is wrestling with addressing new additional streams of data that are not standard, unstructured, and highly variable. This includes Rx, labs, histories, mHealth, sensors, IoT, geographic, socioeconomic, demographic, genomic, and behavioral. The data and analytics can be utilized to improve the outcomes from healthcare, improve efficiencies, and help with the needed transition of going from volume to value. It will also boost the effectiveness between providers, individuals, and payers.
Modifying Business to Adapt to New Payment Models
As costs for medicines remain high, Big Pharma is facing a variety of new payment models that it must adapt to in 2021 and beyond. These so-called next-generation models require the companies to both develop and integrate operational and technical infrastructure with programs that work towards a fairer way of managing the costs, risks, and outcomes. Some of these new payment models include shared savings, bundled payments, risk-sharing, and episodes of care.
Addressing Changing Healthcare Policies in the Developed and Developing World
Healthcare policies are changing rapidly in both markets of the developed and developing world. In the U.S., these policies include the repeal and replacement of existing healthcare legislation and regulations. There is a continued political divide leading to uncertainty for the future direction of U.S. policy. Some other proposed policies that could dramatically impact the pharmaceutical industry include single-payer, Medicare-for-All, block grants, Medicare and Medicaid buy-in, provider directories, short-term policies, association health plans, and still more political mandates.
Meanwhile, in developing markets, the challenge is adapting to governmental policies that favor local pharmaceutical firms over the major international ones. Cost containment justifies this bias towards cheaper generic makers and producers. Protection laws and intellectual property rights may change here continuously to favor the local firms. Yet these are the markets where the biggest growth opportunities are today. Big Pharma management must spend an increasing amount of time on this developing market focus or risk becoming completely shut out of some of these potentially critical future markets in 2021 and beyond.
The challenge is that traditionally slow management teams must move increasingly fast to stay abreast of all the policy changes in both the developed and developing markets in order to remain competitive and retain access to market. It is only one of the most common challenges that need to be addressed in 2021 for the health care industry to succeed in the future. It remains to be seen how the pharmaceutical industry will manage so much adaptation at once in a short period of time.