It’s common knowledge that not every segment of our healthcare industry operates with lucrative margins. Strict regulatory guardrails, expensive R&D costs and complicated rules of play have kept even the largest of corporate giants out of the space – until now.

Today, nearly 20% of the U.S. GDP is healthcare-related. The sheer size of healthcare expenditures, coupled with patient demand for better outcomes and easier access, is drawing outside players. Spurred on by the attention started by COVID-19 and perpetuated by our 24-hour news cycle, more and more firms are looking for a piece of the action.

Retail leaders disrupting the healthcare landscape

To no surprise, the first to dive into the pool were firms with the existing infrastructure and a logical fit. Players like CVS and Walgreens are leveraging acquisitions and joint partnerships. They are currently doubling down on healthcare tech investments, with the opportunity to rapidly scale across their large brick and mortar footprints and expansive network of care providers.

Non-healthcare retail leaders like Target, Walmart and Amazon are also diving into this space. Walmart is currently dabbling in telemedicine, primary care clinics and health screenings by partnering with health insurance providers to offset care costs for their customers. Amazon is taking the inverse approach, capitalizing on its wide digital network to partner with companies like PillPack (medication dispensing) and Health Navigator (telehealth) to revolutionize patient access to care.

Tech giants harnessing the power of data in healthcare

Historic Silicon Valley tech leaders, including Google and Apple, continue to stake out their territory by leveraging both hardware and software to improve patient monitoring systems. These tech giants possess a wealth of customer data and insights, which they can harness to bridge the gap between providers and patients. Tech-driven solutions that reduce overall healthcare costs by improving patient outcomes and providing earlier detection will mean big money for firms who lead the way.

New competition on the block

Big health systems and investment firms also aren’t shying away from a decoupled market. Big health systems are entering even larger joint partnerships. One key area of interest: Digital technologies that expand their reach through virtual delivery of care. Meanwhile, investment, venture capital, and private equity firms are snapping up smaller healthcare startups, and hedging their bets with both new innovation and existing brand leaders.

Navigating transformation

As the healthcare industry continues to evolve, existing organizations may find it difficult to keep up with new competition while adapting to changing consumer demands.

No player is off the table, and a consistent pulse on the industry for these established organizations is key. On the road ahead, we can expect a continued expansion of competition, which will require flexibility and openness to disruption in your organization’s current perceptions. Digitally-led, consumer convenient models are here to stay. How can the savvy marketer stay competitive during this evolution? Here’s a good starting point:

• Clarify your brand message. Be sure the vision, mission and messaging you communicate are distinct, relevant, and strategically sound.

• Know your core audiences. Not just in terms of demographics, psychographics and geography, but in terms of how their demands and expectations are changing.

• Broaden your “competition radar.” While your traditional rivals will still be a factor, your real future competition may be coming from outside players and emerging disruptors.

• Re-examine your alliances. Are your current partnerships the best strategic fit for tomorrow’s challenges? Are you overlooking any potential allies?

• Keep innovating. The best response to competition from outside innovators is to outpace them — in your strategic direction, in your service offerings, and in your marketing. 

If you are looking for a partner who is nimble and positioned to evolve with you, consider Schaefer Advertising. Our team of experienced professionals brings a wealth of knowledge, expertise, and creativity to the table, helping you to effectively address your challenges head on. Contact us today to schedule a consultation.

In recent years, biotechnology has been one of the fastest-growing industries globally. Biotech has been responsible for many innovations that have had a positive impact on society, including new treatments for previously incurable diseases, advances in healthcare technology, and more efficient manufacturing processes. Within this rapidly-growing sector, we’ve seen particularly dramatic growth among small biotech companies exploding into the market.

However, this type of growth and innovation comes with a large price tag, with research and development (R&D) costs skyrocketing into the billions of dollars. With rising inflation and cost of capital, how does our industry continue to bolster much-needed innovation when aiming for potentially narrower or more specialized markets?

Innovation demand

Some of biotech’s most dynamic and rapidly growing markets reside within the pharmaceuticals sector. The demand for innovative products spans a broad spectrum,  from non-opiate pain medication to cures for diseases, such as Type 1 diabetes, and beyond. Coupled with these demands is the expectation that pharmaceutical sales are expected to rise around the world as the global population continues to age. This industry is primed to take center stage.

As innovations evolve, they will create tangential benefits in other categories. For example, breakthroughs in biotech will be leveraged within the agricultural industry to address crop yield waste and food security. As healthcare service providers look to create systems around patient-centered care, these types of collateral innovations are likely to move in parallel.

Cost of new innovations

Along with the social and economic benefits of biotech innovations comes an extremely high cost of developing new treatments and technologies. In fact, the average cost of bringing a new drug to market is currently estimated at approximately $1.1 billion.

The high, upfront R&D cost of launching new drugs and technologies means that many biotech companies can expect to operate at a loss for several years before their products become profitable. This long lead time may pose a barrier to entry for new investments, as innovative ideas struggle and compete to secure the funding needed to reach commercialization.

In recent years, we’ve seen heavy investments from private equity firms and venture capitalists, who seek to take advantage of the high demand and equally high payouts. With increasingly high price tags, however, this is not an industry where failure is welcomed.

Profit margins and innovation

What happens when, simultaneously, the biotech industry matures, the economy constricts, governance shifts and access tightens? The result is an environment in which profit margins are likely to narrow. In response to this, the industry is already seeing some consolidation, especially in the pharmaceutical space, with larger companies acquiring and merging smaller ones into their product pipelines.

While this doesn’t spell the end for these smaller companies, it may mean a reduction in innovation as company priorities shift to developing products that have the greatest chance to be winners. One can’t dispute the benefit of innovation that eradicates a rare genetic disease, but the immediate profitability for companies and investors in smaller or highly-specialized niche markets makes the economic justification much more challenging.

To maintain innovation in the biotech industry, policymakers may need to consider further incentives to encourage companies to invest in riskier projects. This could include tax breaks or grants for companies that invest in R&D for rare diseases or other niche markets. Additionally, regulatory agencies may need to consider streamlining the drug approval process in order to reduce the time and cost of bringing new treatments to market.

Maintaining innovation

The biotech industry can make a significant, positive impact on society, but the high costs of developing and administering new treatments and technologies pose significant challenges.

To maintain innovation in this space, it will be critical for organizations to work together, and to look at the collective benefit to society beyond a single ‘sale’ or revenue stream. This collaboration can’t be confined to the U.S. alone; it needs to expand globally, to foster an environment of growth. Support from regulatory agencies and policymakers is also needed to offer streamlined approvals, grants or creative incentives to offset the cost associated with bringing these innovations to market.

Alarmist headlines, endless scrolls of LinkedIn content and countless hand-wringing sessions in boardrooms are currently amplifying the economic uncertainty felt in many industries, including healthcare. Peaks and valleys are natural economic cycles, but the hype sometimes becomes a self-fulfilling prophecy that causes organizations to sacrifice short-term investments at the expense of long-term gains.

During these times, it’s important to remember that, according to the Harvard Business Review, 10% of public companies actually grow during economic downturns and their aftermaths. Still, when a downturn looms, thoughts turn to cutting costs.

Often, marketing is one of the first areas to feel this pull back. There’s a reason for that: too many marketing activities lack a clear, tangible ROI, making those resources seem expendable. In addition to marketing, budgets impacting employee engagement and communication are also often slashed. Cutting back in either of these areas boxes are some of your most valuable assets — people and reputation.

We witnessed and lived this during the COVID-19 pandemic. Organizations were challenged with finding ways to reduce costs, while also maintaining the quality of care or product delivery their patients demanded. Shortages in both supplies and workers lead to burnout, delays and frustrations as overwhelmed healthcare organizations worked to manage through the crisis.

Now, as it was in the shadow of COVID, investing in your people and market reputation creates a durable long-term brand. But what makes an investment “smart?” A strong, aligned internal and external marketing strategy will drive clear ROI and tie to revenue benefits.

So how can you move forward with certainty during uncertain times? Here are some pointers from our experience across pharmaceuticals, devices and services:

1. Scrutinize and narrow your focus on the audiences with the highest potential

Leverage customer insights you have at your disposal or conduct market research to truly understand your patient/customer’s preferences and motivators. Explore tactics that allow you to hyperfocus and drive meaningful ROI with your most important audience set.

2. Leverage digital tactics

Digital tactics continue to be the most cost-efficient tool in a marketer’s tool belt. Double down on channels like paid search, blog content, webinars, email marketing campaigns and social efforts. These tactics support a targeted audience and bolster your organic search results, and also provide hard data and tracking capabilities that allow you to prove out your investment.

3. Capitalize on customer advocacy

Word of mouth is one of the most effective ways to drive someone from consideration to action. Nothing can replace the value of a current customer encouraging the conversion of a new customer (or, for that matter, a happy employee referring your company to a potential employee). Create an environment for current customers and patients to share their experiences. Motivate them to refer others. This will expand your reach, and also create deeper bonds with your existing audiences.

3. Optimize your website

For many healthcare organizations, your website is your hub for all efforts. If it’s not easy to navigate and understand, your ROI from other efforts significantly diminishes. An objective audit of your website can drastically improve SEO and user experience and, in the process, increase your customer visibility, drive measurable results, and enable faster conversions.

4. Empower and support your workforce

Your sales teams, healthcare providers, front office staff and customer support teams are the face of your brand. They directly impact the patient/customer experience. Focus on delivering tools that make their work easier and empower them to effectively do their job. Open lines of communication for feedback and improvements. Prioritize easy-to-execute efforts that help them better navigate patient demands and meet their business goals.

Driving market success during times of economic uncertainty can be like playing a game of Tetris. Your job: to make sure all the pieces fall into place. The key is to prioritize and focus efforts on the most value-driving audience, and target them with trackable, measurable tactics. When you correctly and seamlessly put the right pieces into play, the result is success that is felt across the entire organization.

If you are looking for a partner that can help you navigate the peaks and valleys of healthcare and garner measurable success, consider Schaefer Advertising. Our team of experienced professionals brings a wealth of knowledge, expertise, and creativity to the table, helping you effectively address your challenges head on. Contact us today to schedule a consultation.