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Drug reimportation impact on pharmaceutical sector

If you objectively assess the approach taken by the pharmaceutical companies in responding to drug reimportation, you really start to wonder the foundation of their strategy and how self-destructive their approach is. Since iProceed.com has always emphasized the importance of customers to high-value companies and how you don't exist without a whole bunch of happy customers cheering you, we wonder how can the drug companies employ such a poor strategy and antagonize their customers.



Let us briefly analyze the current situation in the pharma sector with regards to drug reimportation:

  1. Almost all companies are scared (despite the fact that the impact is still next to negligible in terms of dollar value).
  2. While proclaiming that no matter where drugs are manufactured or sold, the quality is consistent, they are also saying that they can not guarantee safety because it is coming from Canada. It is such a difficult argument to understand because we are a nation that relies on imports (and a lot of it from Canada) for so many things that we consume.
  3. The companies are crying like a bunch of spoiled kids and hoping that the FDA (and regulation) will save them and life will be beautiful again.

Advice to pharmaceutical business leaders

  1. Stop being in denial and stop hoping that the problem will simply go away because of regulation.
  2. Start accepting the power of market forces. Just study those companies that refused to recognize the threat from offshore competitors in IT.
  3. Do what is best for your customers; so stop screwing American consumers. They deserve the best price possible. It just doesn't seem right to screw senior citizens and sick people. No business model will survive too long for screwing your core customer base. Just because they are a helpless bunch does not mean a business needs to screw them to make profits.
  4. Change your business model. That is the only way to create long term shareholder value. There are many options: offshore R&D (Related article: Reduce R&D through offshoring R&D), partner with other companies to expedite drug development, improve the supply chain efficiencies, eliminate middlemen, etc.
  5. Finally, stop treating the drug reimportation issue as one that can be resolved through lobbying and by scaring consumers. It is plain and simple a risk management issue. So put together a team of risk experts and start dealing with it as you would any other business risk.

Recommended article: Risk management frameworks