For most of my almost four decades in the pharma industry, the folk wisdom was that healthcare companies were immune to general economic factors since “people always got sick” regardless of market conditions. Not this time, folks. A number of parameters are beginning to demonstrate that as the recession deepens, our industry will be far from unaffected by economic forces.
Early indicators include data that show sales of several OTC medications are up, while prescription consumption is down. While open to interpretation, this reversal would seem to indicate that people are trying to avoid the expense of going to see a physician and/or the impact of multitiered prescription co-pays. Also indicative of important transformations here are the offerings of generic prescription drugs by Wal-Mart at costs as low as $4 per month. Such a marketing strategy pulls business away from distribution channels like chain and retail pharmacies. It also emphasizes the price of medications, doubtless getting patients to make a plea for generics from their physicians.
What are the implications of all this for the pharmaceutical marketing researcher as we look down the barrel of 2009? Most importantly, we are going to have to learn to view the healthcare behavior of our patients more holistically, i.e., as being much less isolated and idiosyncratic than heretofore perceived, and as much more closely linked to the general behavior of the patient in the marketplace up against the realities of tough economic times.
The economic environment seems to be making healthcare behavior more like other economic behavior, and as pharmaceutical marketing researchers we must be prepared to respond appropriately.
Vanderveer is group CEO of GfK US Healthcare Companies