Tactical Diversity In The Evolving US Health Market

Just before Management Center Europe's annual international pharmaceutical conference took place in Paris earlier this month, US House Speaker Newt Gingrich had assured The Wilkerson Group chairman John Wilkerson that US health care reform legislation will be passed this year. However, as to what this might mean in terms of deregulation and "wonderful things for the industry," Dr Wilkerson told the meeting: "I will have to see it to believe it."

The turbulence in the industry is generating forces for both consolidation and fragmentation, said Dr Wilkerson. There is still mass confusion; management and boards have not come to grips with the fact that the industry is shifting from the product era of the past to the present horizontal consolidation and into the future of integrated care. Companies should not be dismayed at the dynamic tension which now exists between the industry's historical and emerging business models; this is the way of the future and will continue for the next six to 10 years, he forecast. Bonded instability leads to creativity and changeability, he said, and while few companies have a sufficiently rich pipeline to rely on this for growth, the rest must experiment with new models, and there is enormous value to be created.

The Era Of The Incredibly Well-Informed Consumer We are moving into the era of the incredibly well-informed consumer, Dr Wilkerson told the meeting; consumers now arrive at the doctor's office armed with computer printouts on every kind of treatment from snakeoil to the latest therapeutic advances. The Internet offers huge opportunities to influence the consumer, plus a whole series of other programs now being funded by the venture capital community; he advised companies to take a page on the Internet and "set the channel." Among other initiatives, he noted that one US company, RxRemedy, distributes disease-specific magazines free of charge, the only requirement of the recipients being that they fill out a number of questionnaires relating to the health of themselves and their families. Thus the company is building up a phenomenal database of lifestyle information, of invaluable use in repositioning ethical products.