Beyond the Pill : Moving from products to value-added services in the pharmaceutical industry

Abstract

Background: The pharmaceutical industry is experiencing a period of far-reaching changes. Increased competitive pressures, patent expiries and payers’ outcome focus pose high challenges to the industry. Offering value-added services to a product as a measure to improve health outcomes and to achieve competitive advantage is currently being discussed and implemented to face these challenges.

Objective: This paper’s aim is to analyse to what extend service strategies “beyond the pill” are and will be integrated into the pharmaceutical business model, and to assess if industry really is moving from a product-only focus to value-added services. The scope of the study is global and concentrates on manufacturing companies of branded pharmaceuticals.

Method: The research covers a literature research on strategies “beyond the pill” covering potentials for value-added services, the current service landscape and challenges to service implementation. The literature research is complemented by a survey on 56 experts working for the pharmaceutical industry and their perceptions on the current situation of service strategies within the industry. Results: Both the literature research and the survey revealed that service strategies will gain importance. However, there are still multiple challenges to overcome. Legal restrictions, difficulties in measuring return on investments, conservative business philosophies and mistrust towards the pharmaceutical industry are factors slowing down the advance of service strategies.