Darshan.K, Correspondent, India Pharma Outlook
One of the world’s largest synthetic opioid makers in 2019 faced bankruptcy, with legal settlements worth more than $200 million to be paid out to the respective parties. This consequence was a result of them promoting their niche drug aggressively, which drew the attention of regulators and resulted in a bad episode for the pharmaceutical industry.
The above incident is one such example of how companies fall into issues when they try to expand their business inorganically with their niche products. Attempting to expand the ways in which one’s market share can be increased tests a company’s intellectual prowess, perseverance, and willingness to try new things and take a risk. Experts have studied numerous companies and have recognized a pattern of companies with organic growth over the years. They have identified the following common strategies employed by all of them.
Success is a path that is rarely achieved by the efforts of a single individual. One of the foundational pillars of success in the pharmaceutical industry is the establishment of strong partnerships. Collaboration with reliable distributors, suppliers and logistical service providers is critical for ensuring a seamless supply chain. Building relationships on the foundation of trust with key stakeholders, like healthcare providers and pharmacies, has proven to do wonders for the reputation of the player in the industry.
In addition to traditional partnerships, embracing digital platforms and e-commerce can be a game-changer. Creating user-friendly online platforms for ordering and managing pharmaceutical supplies can streamline the distribution process, making it more efficient and accessible for all stakeholders.
McKesson, one of the largest pharmaceutical distributors globally, emphasizes building solid partnerships. They collaborate with pharmaceutical manufacturers, healthcare providers, and pharmacies, ensuring a reliable and efficient supply chain. Such partnerships contribute to McKesson's reputation for dependability in the pharmaceutical wholesale industry.
In a world defined by technological prowess, with technology implemented in every possible corner, it has proven fatal for companies that showed negligence in developing their existing technology. It is rapidly transforming the pharmaceutical industry, and companies that have leveraged it have seen a tremendous uptick in their market value.
Blockchain technology, for instance, has provided transparency and traceability throughout the supply chain, reducing the risk of counterfeit drugs and ensuring compliance with regulatory standards. Integrating artificial intelligence (AI) and machine learning (ML) into inventory management systems has improved demand forecasting, minimizing excess inventory and reducing the likelihood of stockouts.
AmerisourceBergen, a leading pharmaceutical distribution company, leverages technology to optimize its operations. The company employs cutting-edge warehouse management systems, track-and-trace technologies, and data analytics to enhance efficiency and maintain a competitive edge in the rapidly evolving pharmaceutical wholesale landscape.
The most common yet complicated tactic for increasing market share is to set up shop away from home markets. Venturing into new geographical regions comes with its own set of challenges, but it is a necessary step that major players have taken. Identification of potential markets and moving at the right time is a high-risk-high-reward challenge.
Market diversification is another critical aspect of expansion. Pharma companies should consider diversifying their product portfolios to cater to a broader range of therapeutic areas. This not only broadens market reach but also mitigates risks associated with dependence on a specific product or therapeutic category.
Novartis, a multinational pharmaceutical company, strategically expands its market share by venturing into emerging markets. By identifying regions with growing healthcare needs, Novartis establishes a robust global presence. Additionally, the company diversifies its product portfolio, covering a wide range of therapeutic areas to capture a broader market share.
Regulatory blunders have cost billion-dollar companies their reputation and have led them to bankruptcies. Given the nature of the pharmaceutical industries, the regulations here demand strong adherence to local and international standards. Staying informed about regulatory changes, investing in compliance training for staff, and maintaining open communication with regulatory authorities are vital components of a successful regulatory strategy.
Companies may find it beneficial to collaborate with regulatory affairs experts or consultancies to navigate the nuances of different regulatory frameworks. This proactive approach not only ensures compliance but also positions the company as a responsible and trustworthy player in the industry.
Johnson & Johnson places a strong emphasis on compliance and regulatory strategy. The company invests in robust regulatory affairs practices, ensuring that its pharmaceutical products meet or exceed global regulatory standards. This commitment to compliance enhances Johnson & Johnson's reputation for quality and safety in the pharmaceutical industry.
Expanding market share in the global pharmaceutical wholesale industry requires a multifaceted approach that combines strategic partnerships, technological innovations, global expansion, compliance, and a commitment to research and development. By staying agile and responsive to market dynamics, pharma experts can navigate the complexities of the industry and position their companies for sustained growth and success.
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