Is pharma's future not in pharma? That's the contention of Pricewaterhouse Coopers, the consulting firm that periodically offers a state-of-the-industry address. This time, the PwC report recommends collaboration with non-drugmakers, particularly on disease management programs. Partnering with other companies on "holistic solutions" rather than "narrow treatments" is a more flexible and "value-enhancing" strategy than, say, mega-merging.
Say what? Well, after running the report through our MBA-speak translation machine (patent pending), we found that PwC is simply applying a principle that's worked in other industries to the pharma world. Data and technology are where it's at now, the firm says. Drugmakers are going to have to think of themselves more broadly: They can't be makers of drugs. They have to be health gurus, project managers, hospital partners ... and so on. They have to see their strengths--such as dealing with regulators, managing intellectual property, etc.--as moneymakers in their own right, rather than simply means to a new-drug end.
Outsource R&D, one PwC partner suggests. Outsource manufacturing. Outsource sales and marketing, even. Then forge some links with tech companies--Google, anyone?--and insurers, healthcare providers and benefits managers. Reinvent yourselves, pharma! Don't you know that's the latest trend?
It's all a bit loosey-goosey, especially when you set it up against the easy-to-grasp, readily quantifiable approach of M&A. But PwC may have a point, even if it expresses itself rather, er, obliquely, long on jargon and short on real-world examples. Drugmakers that can offer more than just drugs--say cholesterol drugs plus nutrition counseling plus take-your-medicine reminders plus exercise-motivation programs--will do best. What is your company doing? Let us know.