Russian Conditions to the health care market – How could the industry adapt?
This spring, I was as lucky to be invited to the Russian Pharmaceutical Phorum, May 23rd, in St. Petersburg (Adam Smith Conferences ).
In the preparation to my key note speech I prepared myself to learn the health care conditions of Russia.
The Phorum started with an introduction to the very topic: People from health authorities introduced their interpretations of the current situation, like Elena Maksimkina, Director of the Department of State Control for Drug Circulation of the Ministry of Health of Russian Federation, Larisa Popovich, Director, Health Economics Institute and others.
Although all speakers at the symposum didn’t very much agree on their views on the market, I understood the actual situation.
Also, there was a symposium from industry leaders to reflect on the Russian health care market conditions. A symposium that appears to be held at every year’s edition of the pharmaceutical phorum. At its 2012 edition, this CEO symposium was asked the following question by its moderator:
“What makes your influence as a pharma company?”
The striking answer was this:
“What you actually DO in the market will make that your voice can be heard..
It makes the difference between being seen as “helping” instead of “exploiting”Â ..”
It is not your intentions that makes the difference to your customers, as well as the actual market activities you deploy will do. If you put your energy into promotional actions, you will be seen as a commercial company, as sales persons. But, to the contrary, when you work with health care professionals’ attempts to create better care for patients, then you can get to be seen as a partner to care, as a colleague maybe.
It relates to your business directly: when you only sell medicine, your business coincides with the price of your product. But when you work together with stakeholders to care for patientsÂ you might be a collaborator and your value will go beyond your product’s price. To escape the commodity trap, the main quest to the pharma company is:
How can we help the health care professionals help their patients better?
This will create a better position to your business, as health care will always look for better care. What you need to do is helping out, create better conditions for care in working together with health care providers.
The Russian market is growing better indeed, but as in all health care systems, there is much to be gained anyhow.
In my presentation (below) I summarized some of the drivers and barriers to the health care market of Russia, on slide 12. Russian health care is in need of much. A lot can be gained!
In my actual talk to the Phorum, I gave an example about how aÂ bit of facilitation to general practitioners and pharmacists for their cooperation with each other, could make the difference to patients with chronic conditions. But to see these opportunities, the perspective of pharma should really change from promotional to helping or, if you like, to consulting.
Adapting to local conditions
For pharma industry with a longstanding tradition and internal routines to the rep-promotional model it will not be easy to change their current business. I was for instance highly surprised to see that the very distinctive conditions between internal health markets in Russia had not lead to any distinguished difference in approaches by the industry. Also, there seems to be no noticeable accommodation in market approach of reimbursed care and in the approach of the market of private payers/patients . How could one think that the traditional promotional rep strategy would lead to great results in all different types of markets?
In my presentation I outlined sequential steps to change the market approach. See this: