Pharmaceutical Executive Europe - IMS Sales Environment Supplement - February 2008 - (Page 9)

New Model Pharma The German pharmaceutical industry is at a crossroads. Frank Wartenberg and Markus Gores ask which commercialisation model will provide the path to future success. he operating environment for the German pharmaceutical industry is changing dramatically through accelerating integration of stakeholders and growing economic pressures. As a result, pharmaceutical companies are facing increasing commercial risk due to more volatile demand and being dependent on new, fewer and more powerful customers. They must innovate their business model to meet those challenges. T An industry in turmoil For the German pharmaceutical industry, 2007 was a year of upheaval. The implementation of the GKV-WSG (Sick Fund Competition Act: legislation to strengthen competition in the statutory health insurance) in particular triggered and accelerated mechanisms which will transform the pharmaceutical landscape. There are three underlying forces which are driving change in the German market: horizontal integration, vertical integration and the rise of an economic mindset (Figure 1). Horizontal integration drives the like-with-like consolidation of healthcare stakeholders, which has already started to re-shape the German market place. Physicians, for example, are forming networks (such as the Kinzigtal doctors’ network) or are joining forces to set up medical care centres (which may also cooperate with hospitals — see below); as the private hospital sector continues to expand, we are witnessing the rise of private hospital chains, as operators try to exploit economies of scale while at the same time creating centres of excellence. With restrictions on multiple ownership being relaxed, pharmacy chains are likely to become a common sight in German high streets in the near future. Sick fund mergers can also be expected in response to changes in the funding model by the national health fund, which will unleash market forces in the hitherto protected German statutory health insurance sector. The result is a new customer landscape where demand, and therefore negotiation power, is concentrated in fewer entities. Vertical integration combines different players along the healthcare value chain and results in new types of stakeholders. Managed care models integrate payers and care providers and strongly align their traditionally independent agendas and interests. This scenario has also been provided for within the legal framework underpinning medical care centres. For example, it is 9

Table of Contents for the Digital Edition of Pharmaceutical Executive Europe - IMS Sales Environment Supplement - February 2008

Pharmaceutical Executive Europe - February 2008
Sales Force
Commercialisation Models

Pharmaceutical Executive Europe - IMS Sales Environment Supplement - February 2008