By David Pyott

Most companies that provide a good or service widely profess “our customers are our highest priority.” That’s no surprise; without customers, you can’t be in business. But for those of us in the pharmaceutical, biotech and medical device industries, “customer” has taken on an expansive definition. To succeed, we have to understand and fulfill the needs not only of patients who use our products, but physicians who decide what therapy and treatment pathways are best for patients and payers who determine what products will go on their formularies.

As concern over the cost of health care has grown to a fever pitch not only in the United States but around the globe, payers – whether private or public – have become an increasingly more important – and powerful – customer. In turn, payers have focused on the need for a demonstrated value in biopharmaceutical and medical device products.

A 2012 report by the Economist Intelligence Unit (“The Value Challenge,” sponsored by Quintiles) – based on findings of a survey of 399 senior executives from the life sciences industry – points to the challenges of proving “value.” The report argues that the value challenge is not just a temporary symptom of current economic conditions, but a long-term issue that is a leading concern for a majority of drug companies worldwide. And while difficult economic conditions have prompted some payers to concentrate on reducing pharmaceutical and medical device spending, this need to show proof of value has been evolving for decades. It’s clearly influencing companies in our sector: 68% of respondents in the survey saw the growing demand to provide value has had an important impact on their business models; 85% have made at least one change to their model for this reason, 82% to their R&D strategy, and 78% to their commercial plans.

From my perspective, “value” is subjective. We DO need to prove the value of our products, but there will not be a universal definition. It puts the onus on us to foster good relations with payers to recognize and accommodate their needs at the start of the product development process. But even before that, we must be well-versed in our specialties and have deep and enduring relationships with physicians and patients. Understanding what needs they have that are not being met is the true starting point for establishing value.

Reprinted with permission from Allergan. Please send any feedback to corporate_communications@allergan.com