Will Tomorrow’s Pharmaceutical Industry Still Shape and Manage the Narrative of its Brands?
- michael.reny2
- Feb 9, 2021
- 4 min read
Updated: Mar 12, 2021
Information is everywhere. Access to it is ubiquitous. Millennials are like cyborgs. Trust is an issue. Access to customers is difficult. The value equation is evolving. Is all of this challenging our ability to frame and manage the narrative of our brands? And are these challenges friends or foes? Let’s have a closer look.
There’s lots of disruption afoot, no doubt about it! And it certainly has the potential to dilute our ability to define our brands. That’s a very serious thing, and I’m not just saying that as a passionate marketer. We need look no further than recent US politics to see what happens when we lose our ability to control a narrative and to frame what’s true. So is all of this disruption an opportunity or a harbinger of doom? The answer is that it can be either – it all depends on how we choose to respond. For context, let’s look at an extreme but analogous example of another industry being disrupted and forced to respond to a changing environment: climate change and its effect on the auto industry.
To understand this example, you need look no further than the richest man on Earth – Elon Musk – and the company he is building, Tesla. In 2020, Tesla sold about 500k cars and generated about $30B USD in gross sales†. By comparison, the largest auto manufacturer in the world, Volkswagen AG, sold >10M cars and generated $280B in revenue*. This is where it gets interesting. Today, the value of each company (defined as their market capitalization) is completely reversed. The largest car company on Earth, VW, is valued at $100B and Tesla, one of the smallest (for now…), is valued at a whopping $700B. How can this be? Two things. One – the global environment is changing and the world is moving towards zero carbon emissions. This means the internal combustion engine is on a path to obsolescence and electric cars are the future. Two – Tesla absolutely dominates the electric car market but it is also perched to dominate autonomous driving, battery technology and manufacturing, solar and energy storage. Tesla has 7 times the value of a company that sells 20 times as many cars because Tesla is, of course, not actually a car company. It’s a technology company that is exceptionally well positioned to dominate multiple future markets that are being transformed by climate change and innovation. And two of those markets just happen to be among the largest on Earth – transportation and energy. Climate change is spurring multiple new industries and, with it, new technology, new jobs and tremendous wealth. Climate change, the ultimate harbinger of doom, is also potentially the largest catalyst for economic growth the world has ever seen. One of the industries most impacted by this today is the transportation industry. Does this mean cars won’t exist in 20 years? No. But it does mean they’ll be transformed. And who will dominate that market? It’s still too early to say but traditional car makers like VW and GM who are embedded in years of doing things one way will need to adapt, even re-invent themselves, or new manufacturers like Tesla and others, whose focus and very DNA is aligned to thrive in tomorrow’s world, will.
The bottom line is that unyielding, transformational market forces can and will upend traditional business models creating both opportunity and risk. The forces affecting our biopharma environment may not be as existential as climate change but they are diluting our ability to define value doing things “the old way”. This is a growing challenge. A look at it through first-principles1 suggests the following about the future of the industry:
the world will continue to make medications to treat diseases and improve lives;
physicians will continue to use these medications to treat their patients;
our biopharma industry will continue to innovate and improve treatments;
physicians will continue to have to learn about those innovations in order to use them;
technology will march forward and increasingly shape how physicians (and all HCPs) consume information, learn and behave
We work in a highly regulated, risk resistant culture with an apprehensive attitude and response to change. This has made point number 5 the rate limiting factor for our industry. The world is changing all around us and it's influencing everything from our social values, to how we apportion our time, to where we go to consume information, to which information sources we choose to trust and use, and which we choose to distrust and ignore. So the question is, who will activate and shape the information portals physicians select and are influenced by in the next ten years? And what time value does overcoming this challenge sooner rather than later carry? Can a company with an average product that is excellent at reaching its target audience and conveying product value outperform a competitor with an exceptional product struggling to reach its customers? Just as the car industry is changing in response to technology and society’s shifting values, and forcing the hand of traditional players to adapt and play a role in defining the future, our industry is changing in response to technology and shifting customer values, and it’s forcing our hand to adapt as well. Herein lies the challenge …and opportunity.
1FIRST PRINCIPLES: Sometimes called “reasoning from first principles,” the idea is to break down complicated problems into basic elements and then reassemble them from the ground up.
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