普華永道：COVID-19醫藥衛生保健行業影響分析報告 - （英文版）（7頁）.pdf

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1、Epidemic Response to COVID-19 in Pharmaceutical and Healthcare Industries Series Issue 2 Impact of COVID-19 on the health industry and how certain sectors will cope and use it as an impetus for change The outbreak of Coronavirus Disease 2019 (COVID-19) has caused enormous challenges to Chinas econom

2、y and peoples lives. With the epidemic on the rise, society has paid more attention to the healthcare and pharmaceutical industries, which will impose both positive and negative consequences across different sub- sectors. In the short term, there will be a variety of impacts on pharma companies, hea

3、lthcare institutions, pharmaceutical distribution and retail, and health insurance (Fig.1). In the medium to long-term, the impact on the healthcare and pharmaceutical industries are relatively positive: Societal awareness for disease control, prevention and healthcare will be enhanced; The Governme

4、nt will drive the development of hierarchical medical systems, strengthening the competence of community medical institutions; The value of development and commercialization of medicine, vaccines and medical devices by the capital markets will be enhanced; Digitalization of the industry such as inte

5、rnet hospitals will speed up; The demand for private health insurance will increase, currently dominated by state social benefits Focusing firstly just on the pharmaceutical industry, this public health emergency may push the process of medical reform of the “tripartite” of healthcare, medical insur

6、ance and medicine, where players in the industry will face new challenges and opportunities. Framing these impacts against the pharmaceutical industry value chain together with our experience, PwC has identified three significant trends and has proposed the strategic problems which enterprise leader

7、ship should focus. Trend One: With the drive of Government policy and advantaged resources, China drug innovation will become more globalized 2015 was a milestone year in which the State Council issued “Opinions on the Reform of Review and Approval Process for Drugs and Medical Devices” (No. 44), wh

8、ich marked the launch of a comprehensive reform plan for drug innovation. Another milestone was China joining the International Conference on Harmonization (ICH), setting the foundation to accept clinical trial data from abroad, which opened the China market further to innovative companies. At that

9、point, China innovation officially entered the global game and now competes with top innovators across the globe. Meanwhile multiple superior resource advantages have provided the necessary conditions for the development of China drug innovation. First of all, as a country with a large population, t

10、he patient pool is enormous. For example, China has more than 25% of the global patients with lung cancer or esophageal cancer. Pharmaceutical companies can recruit patients much faster and at a lower cost, expediting new drug launches. Furthermore, talent resources for scientific research keeps gro

11、wing and more papers are published in high quality life science journals, signaling that China has stepped up into the worlds top ranks. Finally, national major special funds and the Sci-Tech Innovation (“STAR”) Board have provided capital backing and financial support for drug innovation. Facing th

12、e COVID-19 emergency, government regulators, universities and colleges, and pharmaceutical and device manufacturers have responded and adjusted quickly: decoding genomic sequencing, developing and manufacturing nucleic acid diagnosis kits, and urgently screening potential drugs and conducting clinic

13、al research, publishing policies and technical guidance on clinical trials and medical device reviews. All of these demonstrated encouraging progress for comprehensive and collaborative innovation in medicine, especially when compared to the SARS outbreak in 2003. Hence PwC suggests that pharmaceuti

14、cal companies develop a mindset of “In China, For China and In China, For Global” in R production cycles are more focused and logistics networks and distribution efficiency are expected to lift enormously With medical reform, the concentration of pharmaceutical companies has increased: BE evaluation

15、s and Volume Based Procurement will eliminate many companies that are weak in drug quality management and cost control. The New Drug Administration Law will increase compliance requirements for quality control and product tracing. Meanwhile, with Chinas environment protection policy tightening, many

16、 API or intermediate manufacturing companies may not be able to cope. The industry has really moved toward companies with “high quality, low cost, and steady supply”, which will further push the consolidation of API and formulation manufacturers. In the course of COVID-19, the Chinese production of

17、API not only impacts the local market, but it could cause supply chain disruption all over the world. According to reports by the Times of India on Feb 18, more that 60% of API for the Pharma manufacturers in India rely on importation from China. Since some of the API manufacturers in China could no

18、t return to work due to COVID-19, some Indian companies for generic drugs were exposed to production disruption risk, which then further impacted their exportation to the European and American markets. 3 4 Fig.2 Models to evaluate capabilities of production management for pharmaceutical companies St

19、rengthen the validity of quality control Set-up automatic controlling system (online confirmation and feedback) Optimize time-length of production process, accelerate cycles of bottleneck production Optimize production line structure and operation conditions Optimize production process Streamline tr

20、aining plan and increase training quality. Clarify roles and responsibilities, cut down unnecessary communication cost Evaluate opportunities to control material cost Optimization plant layout and stock plan Decrease transportation cost Assessment Dimension Reduce production materials turn-around ti

21、me Reduce non value-added activities Reduce procedures in operation process We suggest that pharmaceutical companies utilize the current COVID-19 situation as a “pressure test” to improve the capability of their supply chain management. For procurement, pharma companies should strengthen their contr

22、ol of key upstream resources. Many pharmaceutical companies can take advantage of willing capital to lock supply for core materials via business acquisition. Companies need to examine their supply network with a global outlook, and try to hedge the impact of any future “black swans” by applying the

23、principles of multi-point supply. In the end, we suggest pharmaceutical companies and their distributors investigate logistics distribution. During the outbreak, Governments, enterprises and public have paid special attention to Jointown Pharmaceutical Groups distribution network, SF Expresss drone

24、delivery and JD.Coms digital supply chain management services. With the advance of medical reform, innovative medicines need to reach their sales peak as soon as possible. Established medicines need to reach broader and deeper markets, from public hospitals to retail, private hospitals, and online p

25、harmacies, etc. Besides commercial strategy, product characteristics could also affect the delivery network: requirements for storage and delivery of biological products are very strict, flu products have seasonal sales peaks, inventory cost and sales loss caused by stockouts need to be balanced for

26、 antineoplastic and orphan drugs. More and more pharmaceutical companies have built Regional Distribution Centers for broader market coverage and more flexible stock allocation. Pharmaceutical retail groups are also building “cloud warehouses”, to combine sales orders from offline and online pharmac

27、ies, sort and package in the center, and deliver to the patients home or inpatient hospital department. The model could decrease the operating cost for DTP special medicines and optimize the stock level for high-value drugs. Extra capital and other budgets need to be set aside for these new initiati

28、ves, which will widen the gap between leading companies and disadvantaged players, thus drug production and distribution will be of focus. Pharmaceutical companies should invest more in manufacturing management and quality control. Taking bio-macromolecular drugs as an example, manufacturing cost an

29、d quality control are the core competencies. Not only specialists but also experienced generalists are needed for product and process development, process optimization, and operations management. For chemical drugs, a reliable, efficient production management team with the capability to drive and su

30、stain improvement is needed when facing consistency evaluations, inspections and downward pressure on price. Evaluating capabilities of production management (Fig.2) and developing plans and executing against these are major issues for companies to survive. 1. “Classic Model”3. “New Model”2. “Transi

31、tional Model ” Payer/Buyer Domination Prescription options for Physicians are limited Payers have decisive role on clinical use of drugs, market access and drug price Pharmaceutical companies sign contract with payers Physician Centered Physicians are key decision makers Government regulators dont m

32、ake decisions on procurement or prescription directly Multiple stakeholders Prescription right for physician is limited New stakeholders to have more impact on treatment plan and drug price Physicians Payer Medical institutions etc. Relative influence and decision-making power of key stakeholders Fi

33、g.3 Different stakeholders decision-making power on prescriptions and drug prices directly affects marketing models Hospital Representative Hospital Key Account Manager Retail pharmacy Representative Payer Negotiator Others (Online representative etc.) Marketing Mode Hospital Representative Hospital

34、 Key Account Manager Retail pharmacy Representative Payer Negotiator Others (Online representative etc.) Marketing Mode Hospital Representative Hospital Key Account Manager Retail pharmacy Representative Payer Negotiator Others (Online representative etc.) Marketing Mode 5 Trend three: Cross-functio

35、nal cooperation to face the challenges of market access; digitization to lead companies transformation In recent years in China, the medical insurance reform of the “tripartite system reform” changed marketing models. Price negotiation for innovative medicines, centralized procurement for off patent

36、 and generic drugs, negotiation for placement onto the national reimbursement drug list (NRDL), provincial tendering and hospital drug listing have all increased the importance of market access. Pharmaceutical companies in China need to realize the era of the classic commercial model relying on medi

37、cal representatives has ended and China has entered a market dominated by payers (Fig. 3). This has driven organizations to be more agile, and to increase their capability for market access. For example, during pricing negotiations, leadership teams need to determine the magnitude of sales value and

38、 volume changes in very limited time. Information sharing, data lakes and collaborative decision-making across strategy, marketing, sales, finance, government affairs, bidding and tendering are very important. If each function still develops a “silo” operational plan or adheres to out of date proced

39、ures, pharmaceutical companies wont be able to react quickly enough to survive in this new highly competitive market. To avoid COVID-19 cross-infection caused by crowd gathering, many patients have had to cancel or delay previously planned visits to the hospital. Instead, internet hospitals gained p

40、opularity, and Apps allowing search for drugs and drug delivery services arose. The National Health Commission published two documents to support internet medical care. The Beijing and Shanghai Healthcare Security Administrations have announced policies to include internet medical care into the soci

41、al security reimbursement system. Academic promotional activities for the most part ceased in many districts. Leveraging the mature technology of electronic social security cards, Chinese patients may experience a new care model of “online diagnosis at home, online drug purchase, online payment by m

42、edical insurance”. The model provides a new window of care for chronic and common diseases, and potential touch-free digitized epidemic disease control. We suggest in this rapidly changing market, pharmaceutical companies should build an agile organization ready to adapt to rapid and uncertain chang

43、es. First, pharmaceutical companies need to develop a market access strategy based on the characteristics of the portfolio and build the key capability for cross- functional cooperation. Generally speaking, the focus for innovative medicines that are not on the NRDL, should be up for national price

44、negotiation. For those that have been adopted by NRDL, the focus should be on quantity and the key is access to hospitals. After the patent cliff, off patent and generic drugs will compete in centralized procurement. Besides lifecycle considerations, competency in a target area and product sales str

45、ategy are also important factors when developing market access strategy. Pharmaceutical companies should not simply re-design their organization structure by benchmarking, as a market-back approach needs should be the basis for organizational changes. While conducting organizational optimization, ke

46、y scenarios in market access should be referenced to design and practice how to effectively operate cross-functionally. Second, pharmaceutical companies should explore digital transformation for marketing. When the leadership team is considering the value of digital transformation proposals, they co

47、uld assess whether or not digital solutions can achieve three goals (Fig.4) Fig. 4 Three strategic goals for digital transformation for pharmaceutical and medical device companies Optimize key stakeholders experience (including patients and physicians) Develop unique, differentiating competency for

48、the products Increase operation efficiency by cross-function information sharing and strategic coordination Patients referral based on electronic medical record Prescription supported by electric medical insurance card Internet hospital and prescription e-commerce Chronic disease management outside

49、hospital Diagnostic Devices with digital solutions Customized patient education and product/service recommendation Supply chain management Equipment utilization and spare parts management 6 The setting of strategic goals should be based on product characteristics. For example, in patient-centered innovative business models, pharmaceutical companies should evaluate unmet needs from the perspective of patients knowledge of the drug, prescription accessibility, affordability, and medication compliance. Its not difficult to imagine the clinical needs from in