The pharmaceutical and medical device industries are facing financial and perception hurdles that will fundamentally change the way they go to market in the future and produce meetings and education.
The pharmaceutical and medical device industries are facing financial and perception hurdles that will fundamentally change the way they go to market in the future — and in turn, affect the way they produce meetings and education, said Kim Slocum during his keynote address at the Second Annual West Coast Medical Device and Bio/Pharmaceutical Meeting Management Forum. Organized byand the Center for Business Intelligence, the forum was held December 8-9 in San Diego.
Faster Than Inflation
Running through some of the current trends, Slocum, who is president of KDS Consulting LLC, a healthcare consulting firm in West Chester, Pa., painted a dire picture of healthcare in the U.S.
“Healthcare costs are growing faster than the rate of general inflation,” he said, adding that although healthcare was not an overriding issue in the last election, it will likely increase in importance in the future since voters age 50-plus represent a growing segment of the voting population. Health benefit expenses are reaching all-time highs, making it more difficult for companies to provide medical insurance to employees. More than $2 million in medical-related bankruptcies are reported in the U.S. each year, Slocum said. In 2007, 19 percent of families reported having trouble paying their medical bills — up from 15 percent in 2003, according to the HSC 2007 Health Tracking Household Survey.
Medicare funding will be one of the most important healthcare challenges facing the new administration, he added. “Medicare is the next big bailout. … It has a huge long-term funding issue [equating to] a $30 trillion to $40 trillion unfunded liability by about 2050.” Medicaid is also facing challenges. It is jointly funded by the states and the federal government and is “often the first thing to get cut when things get tough,” said Slocum.
Pharmaceutical companies are experiencing the fallout from these financial pressures, he said, pointing to the following statistics:
Prescription drug sales declined for the first time ever between 2007 and 2008, according to the IMS National Sales Perspective.
Pharmaceutical sales are growing faster in emerging-market countries than they are in the U.S., according to IMS Health.
New Business Model
These trends will result in increased regulation and pricing pressures for suppliers, said Slocum, requiring pharmaceutical companies to adopt a “completely different business model over the next 10 to 20 years,” he said.
The next big thing for pharma, according to Slocum: genetic testing and the sale of preventative drugs. “The industry will start to shift from treating diseases to treating the possibility of developing a disease.”
As for the medical device industry, current sales growth is robust, but device marketing has come under scrutiny, said Slocum. The medical device industry is now experiencing the regulatory, public relations, and promotional challenges that faced the pharma industry 20 years ago — and it is likely to face similar regulations. “Expect to see more convergence over the next few years between med device and pharma companies,” he said.
Tying the discussion back to meetings and education for physicians, Slocum told the group to expect “a tighter hand on the purse strings in the short term.” Marketing functions may start to fall off, while investigator and research-and-development meetings continue to be essential for demonstrating value, he added.
In addition, meeting planners should “think global” as a focus on emerging markets and “a decrease in U.S.-centric business will also dominate the marketplace in the coming years.” The new boomtowns, he said, are Brazil, India, China, Korea, Mexico, and South Africa.
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Harry A. Gallis, MD, has retired from his positions as vice president, regional education, Carolinas Healthcare System; and director of Charlotte (N.C.) Area Health Education Center. He is now an independent. contractor in medical education. Reach him at email@example.com.
Medical meeting management expert Carol Krugman, CMP, CMM, has left her position as director of client services at George P. Johnson and is now a consultant, focusing on international meeting operations and crisis management. Reach her at firstname.lastname@example.org.
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The 14th Annual Meeting of the Global Alliance for Medical Education will be held at the Université Claude Bernard in Lyon, France, from June 7- 9, 2009. For more information, visit www.game-cme.org.