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Accenture sees right cost optimisation models and skilled workforce to give Indian pharma competitive edge
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Nandita Vijay, Bengaluru
October 31 , 2018
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Accenture sees that Indian pharma companies can gain a significant competitive advantage over its global counterparts with the right cost optimisation models, outcome-based approach and skilled workforce.
Tackling costs will require adopting a zero-based mindset. This entails looking at every cost line item and setting it to a zero base across the organization from sales and marketing to manufacturing and everywhere in between, he added.
In a dwindling revenue environment, austerity and pricing pressures across key markets present an unprecedented opportunity for pharma companies to tighten their grip in a way they have never done before. In today’s competitive scenario, pharma companies need to leverage existing portfolio to expand in alternate emerging markets. The sector needs to diversify into specialty generics and biosimilars where competition is expected to be lower.
The future holds immense potential for the Indian pharma. The sector needs to recognize that digital technology adoption and innovation are essential to spur growth specifically in manufacturing, supply chain and commercial operations, said Rishabh Bindlish, managing director, AAPAC Life Sciences Lead, Accenture Strategy.
Moreover there are the sector is undergoing seismic changes as it shifts from a product to an outcome orientation and embraces all forms of exciting new science, ranging from digital therapeutics to gene therapy.
Data is more available than ever before. Companies are starting to connect disparate data sets and develop more personalized treatments based on real-world evidence. Healthcare is attracting significant investment from global tech giants, like Amazon, Google and Apple, which are looking to disrupt traditional care models and change our understanding of wellness. This is by leveraging AI, analytics, blockchain and other emerging technologies in the process. As the healthcare landscape changes, pharma companies should develop a collaborative mindset. By embracing multiple data sources and developing partnerships in the technology space, companies can advance treatment and play a leading role in delivering better outcomes for patients and the healthcare system, said Bindlish.
In the face of disruption, pharma companies need to reinvent themselves by employing comprehensive change in each component of the operating model. While there are no quick fixes, companies can start with cost optimization needed for growth. Three priority areas for cost optimization include grow leadership commitment, intensify focus, and provide a structure for category ownership.
Yet another issue is the rising active pharmaceutical iIngredient (API) costs. Anti-pollution measures by the Chinese government has led to a sharp price spike of APIs. Considering 60 per cent of India’s API imports comes from China, the impact is expected to continue for foreseeable future, he said
With pressure on profitability coming from all quarters, there is a clear need for pharma players to strengthen API sourcing capabilities and critically review their cost structures holistically to identify avenues of operational efficiency. Strengthening API sourcing capabilities will entail launching structured alternate vendor development programs, collaborating with suppliers to develop local manufacturing capabilities, amongst others, said Bindlish.
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