With the COVID-19 pandemic being recognized as the world’s worst public health crisis of a generation, it is becoming one of the world’s worst economic crises as well. It has forced the world into total lockdown and social quarantine. Although essential to contain the spread, these measures have drastically affected business continuity, particularly for the healthcare and the pharmaceutical industries. Even with governments taking huge steps to support them via tax and debt postponements, liquidity injections, and interest rate cuts, the pandemic is making the world realize the importance of robust healthcare and pharmaceuticals.
The months ahead for the global healthcare and pharmaceutical sectors will not be easy. They will suffer both financially and operationally from the current lockdown and quarantine measures being implemented by almost all of the world’s governments. While no one is certain of what’s yet to come, it is absolutely vital to anticipate the possibilities and take relevant actions as soon as possible to weather the storm in the long-run.
1) Shortage of Drugs and Medical Materials and Equipment
Sharona Hoffman, Professor of Health Law and Bioethics at Case Western Reserve University, expects a huge danger to the drug supply in the US, especially the antibiotics. This is because China, the largest drug and related raw materials producer in the world, is experiencing a huge downturn in its production capabilities and supply chains.
2) Increased Payment Disruptions
According to Transunion, a consumer credit reporting agency, 61% of the surveyed people stated that the pandemic has impacted their household incomes. In such a delicate time, healthcare and pharmaceutical companies will have to defer, cut, or waive off the payments that will hit the revenue hard.
3) Fall in Patient Volume
To ensure the rapid reallocation of the resources of hospitals, medicines, and health-tech to deal with the virus, non-critical healthcare appointments will be deferred or canceled in order to maintain capacity. Moreover, patients will be unwilling to visit physicians in order to avoid cross-infection.
4) Delayed Clinical Trials
According to Reuters, an international news organization, increased focus on developing vaccines and ensuring therapies to specifically combat COVID-19 has stalled the progress of medical treatment development for other diseases. The increased strain on hospitals and research facilities and the safety concerns of the scientists and the trialists has forced many businesses to delay or even scrap their medical testing plans.
The pandemic has exposed some of the core weaknesses of the healthcare and the pharmaceutical sectors. Specifically, their overreliance on countries, like China, to become their sole producer of their drugs and medical equipment. As a result, when things go bad, such as now, their entire financial and operational health is threatened.
As people form new habits and preferences in this lockdown, the health and pharma industries are undergoing a fundamental shift towards digital. Online platforms enable information and products to be available on a single source, which also allows customers to understand, search, and order their required products, all from a single source. Moreover, with orders being delivered directly to the doors and consultations with physicians being done online, digital is expected to revolutionize the health industry.
2) Improved Drug Development
GPU’s (Graphics Processing Units) ability to handle large amounts of data can be the pharmaceutical R&D-game changer. It will enable R&D teams to analyze large volumes of disparate data to discover potential therapeutic applications. Combined with new technologies such as trial simulation and automated trial design, the time and resources required to bring a medicine to market can be reduced.
3) Stronger Healthcare Infrastructure
South Korea, Taiwan, Singapore, and Japan have managed to flatten the curve by adopting a highly innovative digital-powered healthcare infrastructure based on their learnings from managing the recent comparable virus outbreaks like SARS and MERS. Similar outcomes can be expected in several countries around the world once the current outbreak subsides.
Key Takeaways: Plan Ahead
Although the pandemic has created shock waves in almost every industry, the challenges facing healthcare and pharmaceutical companies are urgent – health facilities must get their required materials and devices and patients their therapies on-time. Here’s an action plan to help the health industry operate safely and effectively in the midst of the crisis:
1) Set up a Crisis Management Team
Health-related companies should set up a team consisting of members from critical functions. The team should be responsible for analyzing the current situation and taking appropriate decisions quickly and effectively, without requiring permissions from multiple stakeholders.
2) Ensure the Health of Core Operations
Deloitte, an international consulting firm, recommends the industry to ensure normalcy in the supply and production of critical products, whilst taking the required precautions. The incoming goods must be disinfected, warehouse capacity should be increased, and the health status of every warehouse and plant employee should be monitored on a daily basis. Moreover, non-critical clinical trials should either be delayed or continued based on whether the patients are immunocompromised and trials require a hospital setting.
3) Increase Cross-functional Information Sharing
Facing fast-changing policies and market demands, healthcare and pharmaceutical companies need to become more agile by enabling smooth information transfer across the different departments to increase efficiency and coordination.
4) Enhance Customer Experience
Providing an excellent customer experience is a necessity for businesses to thrive through the crisis. It makes the customers feel good about the company, which leads to additional revenues and faster growth, at the expense of the competitors. Therefore, resources should be mobilized to enhance the collaboration between the internal teams (Sales and Customer Service) and the customers in order to help them make better decisions.
How Integrated eCommerce Brings it all Together?
For both B2B and B2C buyers, the buying experience, even in this critical situation, matters a lot. To retain your existing customers and bring onboard new ones, a seamless experience needs to be offered to the consumers. Pharma, medical devices, and other related industries need to adopt digital ways to sell their products in the most efficient and streamlined way.
Deloitte recommends readjusting the whole operational model to enable digitalization of Sales, Customer Services, R&D, Inventory, and Production departments. It highlights the importance of the industry to utilize this lockdown to go omnichannel to enhance customer experience, and setting up and optimizing eCommerce stores must be central to this.
According to Data Bridge Market Research, a leading market research firm, healthcare and pharmaceutical eCommerce is expected to grow at a CAGR of 21.3% between 2020 and 2027. eCommerce would enable companies to not only expand their revenue channels but also provide an additional customer engagement channel to better understand the customer requirements and improve their product offerings and brand image. Moreover, eCommerce platforms can be synced with each other to ensure streamlined operations without errors, better inventory management, real-time communication, and the automation of tedious and time-consuming operational processes.
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As this crisis unfolds, it’s imperative for the healthcare and the pharmaceutical industries to observe the short-term effects and long-term ramifications. The months ahead may not be easy, but the key is to understand potential risk areas and implement mitigation plans. Whether it be investing in those areas which were previously deemed unnecessary, or reallocating resources to enhance existing technologies and strategies, the industries shouldn’t be afraid to try new things and provide much-needed relief to the most important entity they exist to serve – the customers.