Affiliates of the future

A perspective on future-proofing PharmaCo affiliates

Strategy& Blog article: PharmaCo affiliates of the future
  • Blog post
  • October 08, 2024

Dr. Thomas Solbach and Jonas Grefe

The future of healthcare is evolving through transformative technologies, reinvention of traditional business models, and ecosystem partnerships, all aimed at creating a more collaborative and patient-centric approach to health. As the crucial link between PharmaCo headquarters and global markets, affiliates cannot afford to stand still. To be commercially fit for the future, today’s affiliates need to anticipate change and prepare accordingly by tailoring go-to-market models and their organizational setup, identifying their differentiating capabilities, reassessing their culture and ways of working, and considering how technology and AI can both enhance and facilitate change.

Challenges driving change for affiliates

Healthcare systems worldwide are grappling with the rise of chronic and rare diseases, increasing treatment and service costs, and broader macroeconomic pressures. Consequently, local markets are evolving through shifting health policies, changing stakeholder expectations, and the emergence of new delivery models. This has significantly heightened the challenges for pharmaceutical affiliates, altering how they engage in the market, meet stakeholder expectations, and manage profitability.

Emerging challenges for affiliates

Stakeholder engagement
  • Increasingly diverse stakeholder ecosystems are requiring broader, yet integrated, engagements across the value chain
  • The shift towards customer-centric approaches necessitates holistic, omni-channel engagement models that cover more aspects of the patient journey
Product portfolios
  • Diversification within product portfolios is changing the skills and capabilities required to drive growth of new products and meet the needs of distinct patient sub-populations
  • The emergence of advanced therapies is creating the need for distinct operating ecosystem needs (e.g., bi-directional supply chains), and fostering novel partnerships with third parties
Technology and data
  • The growing use of AI-based solutions and data analytics is redefining how affiliates understand and engage with their customers
  • The rise of telemedicine and digital support tools is transforming HCP-patient interactions, as patients increasingly demand more digitally enabled healthcare experiences
Financial pressure
  • The rising costs of innovation are increasing the pressure to maximize margins and deliver strong returns on investment
  • Inflation and people-related costs are driving up operational expenses, making it more expensive to bring new products to market
  • The emergence of new commercialization models (e.g., value-based) is redefining how affiliates make money while increasing financial and operational risks

Considerations for affiliates of the future

These emerging challenges influence how affiliates operate today and prepare for the future. In light of regular reviews of an affiliate’s strategy and operations, we have identified four critical building blocks that ensure the future readiness of affiliates.

Building blocks for PharmaCo affiliates

PharmaCos must carefully consider each building block by answering key strategic questions on how to best position their affiliates in the current market environment and set them up for future success.

  • How do go-to-market models evolve to unlock opportunities, address challenges, and respond to product portfolio changes?
  • What organizational structures will enable the greatest flexibility to change in the market and product portfolios?
  • What capabilities are customers demanding today, and what trainings are required to meet their needs and operate effectively in the market?
  • What will the employee of the future look like, and how can organizations build up the competencies needed across multiple generations?
  • Which future working styles, such as agile and collaborative methods, should organizations implement to empower their employees?
  • How can organizations cultivate a mindset focused on innovation and continuous learning, to foster a dynamic organizational culture?
  • What are the right innovative tools and systems needed to facilitate tailored stakeholder engagements and drive efficiency?
  • How can organizations maximize the adoption of global capabilities while encouraging local innovation?

Addressing these questions can be challenging for affiliates. However, a fact-based portfolio analysis approach can help simplify this process by identifying the necessary capabilities for an affiliate’s portfolio and outlining optimal resourcing profiles.

An objective approach to prepare for the future - 'product archetypes'

Affiliates can streamline their operating models by categorizing their products using distinct archetypes. The maturity and nature of an affiliate’s portfolio may determine how to engage the market and organize teams. Innovative products or therapies in a new disease / therapeutic area commonly require increased engagement to effectively communicate their value in the market, while legacy products often need less effort to maintain sales. Affiliates can reallocate effort across their portfolio by clustering products into distinct archetypes, categorized by:

  1. Future brand potential: This considers factors such as revenue potential, profitability, growth, pricing pressures, and competition to assess the potential of a product
  2. Customer engagement: This evaluates the level of customer engagement required for specific products, whether it involves medical, commercial, or a combination of both resources
Product archetype framework

The outlined archetypes provide affiliates with guidance on deploying commercial, medical, and digital capabilities, which in turn inform product go-to-market models.

Resource allocation by archetype

Specific actions for affiliates

Once affiliates have successfully clustered their product portfolio across archetypes and identified respective resource allocations, the four critical building blocks must be addressed to support these archetypes.

Starting with the first building block, go-to-market models and organizational setup, product archetypes are translated into tailored engagement models through analysis of product pipelines and existing therapeutic capabilities. This includes balancing customer-facing teams (such as commercial and medical teams) with enabling roles to ensure these teams have the necessary resources to compete effectively. The next step is designing an organizational setup that aligns functional teams with sales priorities, establishing clear roles, responsibilities, structures, and reporting lines.

The implications for capabilities, culture, ways of working, and technology should subsequently be addressed to best complement and enhance the new organizational setup. The primary focus is on empowering affiliates to equip their workforce to meet and surpass market demands, enhance internal collaboration for better outcomes, and achieve maximum operational efficiency:

  • Differentiating capabilities: This involves identifying and organizing the critical capabilities that create added value for affiliates and their stakeholders. These capabilities should be aligned with product archetypes, and organizations must determine how to build, acquire, or recruit them
  • Culture and ways of working: A culture of continuous learning and collaboration is crucial in dynamic customer markets. Affiliates should assess whether their current culture supports cross-functional integration, the adoption of agile methods, and the leadership necessary to drive change
  • Technology and AI: Leveraging technology and AI can transform affiliate operations and provide a data-driven competitive advantage. Understanding which tools and systems drive productivity and enhance the employee experience is key to achieving operational excellence. See our “Re-inventing Pharma with artificial intelligence” report which explores how AI is transforming the sector

The time to act is now

As market and healthcare system challenges continue to evolve, PharmaCos cannot afford to let their affiliates fall behind. Ask yourself: Do your teams have the right go-to-market models? Are they using the right tools to drive productivity? How well do they adapt to their markets? Now is the time for PharmaCos to evaluate their affiliates and equip them for future success.

Tim Auret and Rahul Khatri also contributed to this report.

Contact us

Dr. Thomas Solbach

Dr. Thomas Solbach

Partner, Strategy& Germany

Jonas Grefe

Jonas Grefe

Director, Strategy& Switzerland

Hide