For several years now, the pharmaceutical industry has been faced with numerous structural upheavals that have profoundly changed the nature of the businesses operating in the sector.
Financial constraints (increased R&D costs) and recent regulatory developments (government pressure on drug prices, powerhouses becoming publicly traded, emergence of barriers to reimbursement) and the increasing use of generics are testing the ability of those in the market to adapt.
The healthcare sector in general is in a state of upheaval. Dealing with regulatory constraints, healthcare reimbursement and cutting costs is new to most in the sector. They must take decisive action to address the challenges posed by more demanding patients who require more personalized care, particularly in terms of technological innovation and optimization of resource management (staff, infrastructure, equipment, etc.) as well as organization and governance (collaboration between hospitals, collaboration between hospitals and front-line services, collaboration between disciplines within or outside healthcare centers, logistics platforms, continuity of care, etc.).
How to meet the challenges of the industry
To overcome the difficulties resulting from these new constraints, the market has been subject to growing concentration since 2017 (according to Bloomberg, mergers and acquisitions amounted to $95 billion in one year). This trend is partly explained by the opportunity to achieve economies of scale and strengthen the presence of those in the sector in a multiplicity of markets by reaching critical size. In addition, these types of operations are making it possible for those in the sector to acquire innovative technologies (biotech firms) or enter the market in new therapeutic fields.
What’s more, hospitals and other specialized care centers face another major problem in terms of internal and external organization. Most of them are facing increasing difficulties in managing and rationalizing their financial resources. The key is to achieve critical mass, become multi-specialists and rationalize spending.
How can we help?
Zalis has the means to provide strategic support to its clients to implement processes to adapt or even transform their business model by delegating a team of experts in managerial and financial reorganization.
Health and Pharma
As an example, Zalis was mandated by a manufacturer of radioactive isotopes used in the diagnosis and treatment of cancer to carry out a study to recommend measures to reduce costs and improve the service and efficiency of its distribution network. The client wanted to reorganize its logistics for the delivery of products that have very short shelf lives to hospitals and clinics.
Zalis’s report presented a situational analysis and recommendations to optimize the company’s logistics costs. It essentially covered the following three topics:
- Optimized distribution of finished products
- Optimized return of empty crates and drums
- Options to renegotiate with regular suppliers
Zalis also helped the business implement the recommendations:
- Upstream of its supply chain to reduce supplier costs
- At various sites to optimize logistics schemes
- With central management to optimize logistics planning
Zalis advised a group of clinics on financial and strategic aspects of a debt restructuring and reduction plan. We helped another group that was in the process of selling one of its subsidiaries (clinic). Zalis helped several clinics by modeling their activities to make the right decisions and anticipate:
- The use of resources for the benefit of patients (optimized customer journey);
- Complementary hotel offer to improve their profitability;
- Trade off to achieve critical size and exchange specialties.