In a landscape of growing competition and new distribution channels, how can branded pharmaceutical devices compete against their generic counterparts? It turns out the answer is quite simple: by leveraging the one asset a generic product doesn’t have — brand.

By “brand” we don’t mean just a new logo on a product or a proprietary name for an active ingredient in a drug. We have in mind a more holistic definition of brand that encompasses the entire experience of a product. Every interaction at every step in a customer’s journey is the manifestation of a brand’s promise to its customers.

Key points in this blog:

  • New distribution channels and patient choice
  • The impact on medical products and services
  • Designing for experience with brand

Do new distribution channels truly increase patient choice?

The consumerisation of healthcare is causing a monumental shift in the way people view products and is forcing organisations to re-evaluate who their customers are and how to target them. As people begin to take a more proactive approach to their own healthcare and new digital distribution channels expand to make it easier than ever to compare, order and deliver medical products, patients are offered the opportunity to take an increasingly active role in choosing the products and services they use. But do new distribution channels truly increase patient choice?

Well, yes and no. The introduction of these new distribution channels doesn’t mean that patients can simply choose which prescription suits them best — they still have to be prescribed and issued a medicine by a qualified professional. However, the prescription itself may allow for more choice, and this choice is amplified in the context of new distribution channels like online pharmacies.

In the UK, 81% of all drugs in primary care are now written generically [1]. That is, they prescribe a medicine by using a non-proprietary name. If a medicine is prescribed by brand, pharmacists are required to dispense only the prescribed brand (they will also be reimbursed to do so). However, with a generic prescription, pharmacists have the choice to dispense any suitable product, generic or branded.

This trend towards more generic prescriptions doesn’t seem to be slowing down. Healthcare systems like the NHS continue to push for increasing the percentage of generic prescriptions in order to save costs, and in the US the shift has been somewhat more prolonged, but no less dramatic, with the proportion of generic prescriptions growing from 50% in 2005 to 86% in 2019 [2].

In the past, the ability of patients to influence the product that a doctor prescribed was informal, relatively weak, and limited. The prescribing decisions of doctors were often influenced by incentives from pharmaceutical companies. Payors and pharmacy benefit managers also limit the choices of patients to only those covered by the healthcare plan, and drive these patients towards drug products for which they have negotiated preferential rebates. So, even if the prescription was written generically, in physical pharmacies, patients have had little influence over the product chosen and issued by the pharmacist. This misalignment of incentives means that patients had been left out of the picture and opens a space ripe for innovation and disruption.

As more distribution channels open, more choice is offered to patients with generic prescriptions. Online pharmacies change the context in which patients make purchasing decisions by empowering them with the ability to compare, read reviews, shop around, and find the product that best suits them.

For example, Amazon recently launched “Amazon Pharmacy”, which empowers patients with the opportunity to “browse medications and compare name brands with generic brands” [3]. Online pharmacies offer the opportunity to strengthen the patient feedback loop and influence medical products and services based on demand, use, feedback, and preference.

How does this impact medical products and services?

This ability to influence choice is fast becoming a major driving force behind the shift in consumer expectations. Medical devices are no longer looked at as second-tier products serving only a utility function, they are a fundamental part of people’s lives — they are lifestyle products. Poor product experiences can truly make a person feel like a “patient” rather than a “person”. Because of this, expectations are dramatically shifting.

As online pharmacies gain strength, medical products are slowly brought from the unseen shelves of a local pharmacy to the front of a webpage, in the same way a consumer product might be viewed. When viewed in this context, the disparity between product experiences offered by medical devices and other consumer products is more apparent than ever.

The context and dynamics around the purchasing experience of medical products is changing completely. Products are no longer viewed from the shelf of a pharmacy, they are now viewed on a screen. Recommendations no longer come from your community pharmacist, they are now driven by algorithms, online advertisements, and platform incentives. Decisions are no longer made on what’s available, they’re based on trust and values.

This means that competition is no longer with products in the same category, it’s with all categories — the bar for product design and experience is set high and anything less is considered sub-par. It’s important to note that this doesn’t mean that consumers expect a premium experience, but rather, thoughtfully considered products and services that resonate.

This shift opens an opportunity to design products which are integrated seamlessly into people’s lives and live outside of the medicine cabinet. Everything from acquisition to unboxing and daily use should be considered, thought through, and designed with people and their values at the core.

The power of brand

So, how do we navigate in a world in which patients are taking a more active role in their healthcare products and services? With the power of brand.

Brand lives at the intersection between the promise a company makes to its customers and the delivery of that promise through experiences. Brand is experience, experience is brand — the two support and reinforce each other.

Brand holds tremendous value because it unlocks opportunities for differentiation beyond the functionality of a device or drug. Digital experiences, services, and peripheral products all have an opportunity to flourish when tied to an ecosystem anchored to a central brand, philosophy, and ethos. Brand also opens the opportunity to drive emotional engagement to disarm purely cost-driven purchase decisions and reinforce trade based on quality and trust. New ways of purchasing medical devices allow people to make decisions based on what they feel resonates with them, their values, and lifestyle. Brand is an opportunity for organisations to promote preference, engage with customers, and build the foundations for customer loyalty.

Every interaction throughout the entire lifecycle of a product experience is an opportunity for a brand to live up to its promise and build brand equity with customers. It’s critical to gain a deep understanding of people, context, and values to create solutions which truly resonate. Understanding how a device is viewed on a digital platform, how a decision is made, how customers receive packages, the unboxing experience, the “click” of a cap, how a device is carried, and even how products are re-ordered all inform the perception of brand in the mind of the patient / customer.

As the healthcare industry continues to evolve, customer expectations will rightfully continue to increase. The impact of this transformation will inevitably result in drastically improved products and services. It’s also not unreasonable to imagine that creating solutions which resonate with customers could even lead to additional benefits such as an increase in adherence and therefore improved efficacy.

Forward-thinking organisations need to start re-evaluating who their customers are and how they can better meet their needs to stay relevant in this new landscape. Brand is an especially powerful tool to help customers navigate this new world of seemingly infinite choice.

To hear more on our thoughts on the shifting landscape in healthcare and the power of brand as a tool for designing healthcare product and service ecosystems, please feel free to reach out.

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TTP — The Technology Partnership

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