Category: Strategy

Prioritization

Screen Shot 2017-06-14 at 9.28.47 AM Check this out! What you will see are guidelines for creating healthcare apps that people will love. More difficult, the blogging physician believes, than one would think. Why? Priorities! For example, many apps for hospital use are created with the priorities of the clients, i.e.,  hospital administrators, in mind. Their priority? Efficiency! Unfortunately, these apps have to be used by physicians. Their priority? Quality! Whoops! Bottom Line. There is a general learning here. In virtually any endeavor, failure to take priorities into consideration can lead to major disconnects. Project failure. Make sure to consider the priorities of all of the key players in an any venture before deciding how to proceed.

Performance Based Rebates For Diabetes Drugs

screen-shot-2017-01-03-at-12-30-02-pm Entering into the realm of performance-based deal making, Merck has signed a contract with Aetna to base the rebates for Januvia on clinical outcomes. Read about it here. Payers clearly like this kind of deal, and pharmaceutical companies are willing to enter into them in order to increase access and sustain sales of products that otherwise have plateaued. Bottom Line. Let me get this straight. Doctors are compensated based on performance. Drug companies are compensated based on performance. What confuses me here is how do you tease out the interaction of physician performance and drug performance? And where does patient adherence fit into all of this? Not simple!

$39.35 To Hold Your Newborn Baby

Skeptical Scapel What? You heard me. Check out this post, in which we see a copy of the actual bill levying a charge of almost forty bucks for a post-C-section mom to have “skin to skin” with her new baby. Two things come to mind here. First is the question as to how a hospital could be so stupid as to actually show this charge, with this wording, on a patient’s bill. Second is the question as to why this goofiness is not even a unique case, but rather only one of the silly charges that hospitals impose, even at the time of joy as parents enjoy their new child. Bottom Line. I’m not sure I have one here, except to note that if healthcare is going to avoid a public image that continues to worsen with every passing day, somebody has to pay more attention to “optics.”

Selling Quality?

GlaxoSmithKlineCheck out these videos. Together, they provide fascinating insights on how GSK has changed its selling model. Their PSR’s, the speakers explain, are no longer incentivized based on volume or market share, but rather on the “quality” of the information that they provide to their customers. Recapturing trust, according to the second speaker, is a major potential byproduct of this shift. I’ve been watching this GSK initiative for some time now, and have done so with great interest. Several things have me scratching my head about it, the most telling of which is that no matter how you dress it up, the job of a sales person is to sell. Bottom Line. I’m truly hoping that I am missing something here, and that the GSK initiative turns out to be a substantive change rather than just window dressing. Time will tell.

Fitbit Goes To China

AlibabaScreen Shot 2016-05-06 at 9.18.43 AM Picture the people gathered around the executive conference table at Fitbit. How, they asked themselves, can we make a giant leap ahead in terms of user base? Ah, one manager observes, we need to get our devices a greater user base in China. And the rest, as they say, is history. A history with a chapter that finds Fitbit striking a deal with Alibaba to get their products key placement on the Tmall. Read about it here. Bottom Line. There is no question that there is substantial customer loyalty among users of wearable activity devices. Once someone has sprung a couple of hundred bucks to buy one, and becomes accustomed to its supporting apps and other nuances, it is not so easy to get that person to make an impulse purchase of another manufacturer’s device. Therefore, it makes tons of sense for a manufacturer to strike all of the partnerships that they can to get their devices into every nook and cranny of the marketplace. Penetration is everything. Watch for more of this to happen in the near future!

Spit Kit Coming Soon to a Pharmacy Near You???

23andme Interesting. Up until now, you had to order your 23andMe sample kit from the company and wait for it to arrive before you could provide a saliva sample for genotyping. But, according to this article, you may soon be able to pick up your “spit kit” at your local Walgreens. Why does this article pique my interest? I’m thinking that partnerships and distribution channels will become increasingly important in the future of health care. Pick the right strategic combination for your product and you can win big. Screw up these choices and you can go down the tubes pretty quickly. But how does one evaluate such choices? Here, my initial thinking is that by putting their kits on shelves, 23andMe can appeal to those people (like me!) who are sort of “fire, ready, aim.” You know, us folk who like immediate gratification and who might not take the “extra step” of having to order the kit and wait for it to arrive. BUT. How about the impact of their using this distribution channel on the popular perception of the science behind the product? Does the pharmacy environment enhance it, or does the “rack job” display detract from it? Bottom Line. Time will tell. Let’s see what we can learn from this!  

Who Am I To Disagree With Clayton Christensen About Disruptive Innovation?

Disruptive Innovation After all, Professor Christensen is the father of Disruptive Innovation. He literally wrote the book on the topic. BUT. In a recent HBR article, he bemoans the fact that, in his opinion, the term is being overused. Many shifts are indeed innovative, but some fairly specific defining characteristics need to be met in order to achieve the “disruptive” moniker. In this article, as you would expect a Professor to do, he briefly lays out the “theory” of DI, and specifies its criteria. So far, so good! BUT. He then goes on to state that, using these criteria, Uber doesn’t make the DI cut. Now I’m lost. Apparently taking liberties I didn’t know I was taking, I usually cite Uber as the poster child of DI. I read the article 3 times. I still don’t get where I am wrong. Bottom Line. But forget my confusion. Spend a couple of minutes reading the article. I guarantee you will find it a great review of DI and its applications. You will also find how DI can be used as the basis of developing business strategies, both offensive and defensive. All good. But I still think Uber is DI. What do you think?

Huge Price Hikes As Strategy

Screens We’ve talked many times before about press coverage of the pricing of pharmaceutical products. For some reason, however, I find this article to be especially bothersome. Check it out and see if you have the same reaction. Here’s the kicker. While pharmaceutical companies typically attempt to legitimate high prices by explaining that much of the money goes to R & D, Valeant offers no such protestation. Rather, it is quite straightforward about its buying old products that are “sort of mispriced,” thus offering an “opportunity” to jack up the tariff several fold. There is, for Valeant, no R & D defense. In fact, there is virtually no R & D! Bottom Line. Based on its low risk, high return strategy, Valeant had become one of Wall Street’s favorite healthcare stocks. BUT. Fear of government intervention has paired off about half of the company’s market cap in recent weeks. Here, you can read a little about some of the alleged operating irregularities that are co-packaged with this pricing strategy. This story is unfolding fast, so you can Google Valeant to get the latest updates that come out after this post. What should we learn from this?  

This Guy Is Good!!!

Yancopoulos He is also very rich. He is George Yancopoulos, the industry’s first BILLIONAIRE chief of R&D. His drug finds and drug discovery system have also made a few dollars for his employer, Regeneron, and for their stockholders and business partners. Bottom Line. Read the Forbes article about this man. Think about what the real backstory is here. What has made this man? When I read the narrative, I focused in on two things. First is the report that “George sees and feels biology in ways very few scientists really can.” Intuition. Second is the fact that he has had good people who have remained with his team despite, I am sure, being actively recruited by everybody and his twin brother. Intuition and a talented and loyal staff. How can you lose?

Good Grief!!!

Good Grief Here we go again. We have been down the “Pharmaceutical companies have to justify their high prices and miserable existences,” path so often that we need not dwell on the point. BUT. Here is another NYT article, yet again calling for pharmaceutical companies to rationalize their pricing structures. Above and beyond our past discussions on this topic, this article also calls out several pieces of legislation moving toward demanding that drug companies do what Bill Clinton told an industry meeting in Philadelphia last month that they must do, “explain, explain, explain and disclose, disclose, disclose.” Bottom Line. If we can stop thinking for a moment about the irony of Bill making this statement up against the backdrop of such Clinton historical gems as White Water, Monica and Hilary’s private email server, I am thinking he may be on to something here. The industry has not chosen to explain its pricing schema voluntarily. It may be made to do so in the not too distant future. Either way, it needs to think this one through very clearly and make a very cogent case for itself. This could get interesting.