We are learning new things about how we make choices and decisions. The work of people like George Loewenstein, Robert Cialdini and Daniel Kahneman have introduced us to new thinking linking psychology and economic behaviour. This has translated into the health sector in a number of ways, including recent reports from both the UK and French governments on how to use the research from neurosciences and behaviour in public health.
This means that corporate strategists in the pharmaceutical and medical device industries as well as public policy makers will need to rethink many of the underlying assumptions driving their strategies, as simply put: there is a better way.
Coupled with our understanding of the complexity of regulated health markets, strategic thinking will need to look anew at market drivers, the logic underlying the assumptions of who key customers are, and the consequences changes in these assumptions have for commercial priorities.
For example: Novo Nordisk rethought who its customers were for insulin, and with new delivery technology, see the diabetic not the doctor as the customer. Bayer developed a little gadget to encourage children to maintain their insulin levels by aligning this health objective with Nintendo games.
Yet, device companies continue to target doctors as key decision-makers with technologies for patient use. The results are plain to see and most people would rightly reject such poorly designed equipment in their homes. The major device companies persist, despite falling market performance.
The pharmaceutical industry in prescription regulated markets continue to target doctors with a field force, much like door-to-door salespeople, when the real determinants of medicines use lie in patient behaviour. While ‘share of noise’ seems to be the reason for large sales forces, improving the calibration of their market objectives with new learning on decision-making opens up new avenues. In emerging markets, retail medicines are just like FMCGs. The challenge for the industry is how to market what is in effect a premium product (it costs more to develop a new medicine than all the developmental research (if any) undertaken by the luxury goods industries), without marketing “sickness”.