Medicines as a Service
A New Commercial Model for Big Pharma in the Postblockbuster World
The past decade has not been kind to large pharmaceutical companies. Their share prices have been lagging the market after many years of outperforming it. Many had to undergo painful restructuring and workforce reductions because their traditional blockbuster model is becoming extinct. More and more top-selling drugs are being replaced by cheap generics, and developing new drugs is more difficult because fewer opportunities exist and more-costly research and development (R&D) productivity has declined. Although this diagnosis is not disputed, the best course of treatment is not clear. Companies have tried to stop the bleeding with the help of mergers and reorganizations and infused new blood by acquiring biotech companies or their innovative products or by diversifying into products other than prescription drugs. In this paper, the authors propose that the pharmaceutical industry can reconfigure its considerable resources to develop innovative and meaningful business models that are based on services that improve access and adherence to prescription drugs for chronic conditions. They argue that such innovation beyond drug development is consistent with the core capabilities of large pharmaceutical companies and has the potential to achieve profit levels similar to those of its traditional models. Their argument is based on the fact that, although effective medicines for most chronic conditions exist, access and adherence to medicines is far from what would be needed to achieve full treatment efficacy. Therefore, value can be created by getting and keeping more patients on their drugs, and innovative business models would allow pharmaceutical companies to capture that value.
Download Free Electronic Document
|PDF file||0.3 MB||Best for desktop computers.
Use Adobe Acrobat Reader version 7.0 or higher for the best experience.
|mobi file||0.1 MB||Best for Kindle 1-3.
On desktop computers and some mobile devices, you may need to download an eBook reader to view mobi files. Amazon Kindle is the most popular reader for mobi files.
|ePub file||1.6 MB||Best for mobile devices.
On desktop computers and some mobile devices, you may need to download an eBook reader to view ePub files. Calibre is an example of a free and open source e-book library management application.
- Copyright: RAND Corporation
- Availability: Web-Only
- Pages: 12
- Document Number: OP-381-HLTH
- Year: 2012
- Series: Occasional Papers
This occasional paper results from the RAND Corporation's Investment in People and Ideas program. Support for this program is provided, in part, by the generosity of RAND's donors and by the fees earned on client-funded research. The work was conducted in RAND Health, a division of the RAND Corporation.
This report is part of the RAND Corporation occasional paper series. RAND occasional papers may include an informed perspective on a timely policy issue, a discussion of new research methodologies, essays, a paper presented at a conference, or a summary of work in progress. All RAND occasional papers undergo rigorous peer review to help ensure that they meet high standards for research quality and objectivity.
Permission is given to duplicate this electronic document for personal use only, as long as it is unaltered and complete. Copies may not be duplicated for commercial purposes. Unauthorized posting of RAND PDFs to a non-RAND Web site is prohibited. RAND PDFs are protected under copyright law. For information on reprint and linking permissions, please visit the RAND Permissions page.
The RAND Corporation is a nonprofit institution that helps improve policy and decisionmaking through research and analysis. RAND's publications do not necessarily reflect the opinions of its research clients and sponsors.