By Yann Gaslain
I am thrilled today to announce kick off of Procare Health. After few months of reflexion, I have finally decided to give a go and create my own company and launch it!
It is, on one hand, exciting but, on the other hand, a bit scary. Yet, I love the new venture of being an entrepreneur!
It is exciting because you feel like no one will tell you what to do, no need to spend night long recommendation to convince upper management, and it is exactly for the same reason that you can feel scary about the proper decisions making process.. No one will tell you either if it is right or wrong…you are somehow alone in the decision making process!
Additionally to the above, acknowledging Procare Health will focus its activity into the Spanish pharmaceutical market, some will say I am just crazy or they will just ask why in Spain?
Well, everybody will have notice that the pharmaceutical industry is in a deep crisis situation and Spain is just one of the countries in Europe the most affected.
Recent study has shown that the Spanish Pharmaceutical industry will loose up to 32% of its global revenue in 2020 vs 2011 levels. The study results, run by pwc, have been presented during the Pharma event organized by El Global “the future of the pharma industry: from vision to decision” and were just astonishing!
Experts have been warning the industry about the structural changes stemming from the increase in the total cost of health care, the rise of consumerism, generic entrants and significant governmental intervention combined with a drop in innovation and R&D productivity. Some analysis shows that the industry has passed a turning point in the way the market will quantify the value of drugs. Companies must redouble their efforts to morph their business models to achieve higher performance.
Time to change Pharma Business Model
Unless pharmaceutical companies act now to adjust to the new climate, they will be pressured to sell their proprietary drugs at low profits because the market will no longer stand the premium price. To achieve high performance, pharmaceutical companies need to reexamine their business model, decide the business they are best positioned for and restructure their operations to support their chosen focus.
No month goes by in the European market without a new Government policy to reduce public spending on health care. From restrictive measures limiting brand prescriptions and encouraging API prescriptions, to mandatory measures ordering the prescribing of generics or even cutting or refusing to reimburse drug prices…
These governmental measures imply the need for quick adaption by pharmaceutical companies in the face of the potential fall in drug margins. This is why we have seen many anticipative reactions from pharmaceutical companies to significantly reduce mid-term financial risks via immediate structure redesign (i.e. severance plans).
While margins have fallen over the last few years, in certain business categories and products there is still the possibility of improving P&L by looking at alternative promotion solutions and thus maximizing short-term profit margins.
As the pharmaceutical industry has looked in the past at reducing the financial risk and the cost of delivering innovation through externalizing R&D, it is time now to look at externalizing sales promotions and finding the right partners for the right business categories and products in order to reduce risk while maximizing short-term revenues.
There are very good reasons why pharmaceutical companies should outsource their R&D, manufacturing and promotional activities where third party alliances can provide a wider range of opportunities, specialist skills and market access.
So, here we go! Procare is committed at “playing” into the Spanish pharmaceutical Industry because we want to be part of the solution and offer to be the right partner which bring the added value that your business require!