As the ACA is implemented and a few score million American citizens sign up for health insurance with the Government, strategic planning has become imperative for all organizations in the pharmaceutical distribution system (PDS). Current changes in reimbursement mechanisms, broader health regulations for coverage and a humongous effort to serve millions has forced managers of pharmaceutical manufacturers, wholesalers, and community and institutional pharmacies to strategically plan for the future. Government agencies and third party payers expect the provision of pharmaceutical products and services to be cost-effective, keeping costs to a minimum and demanding excellence in patient care.
The PDS strategically plans for the future by using the following framework:
- Specification of goals and objectives: review mission statement, identify stakeholders, define customer and market needs
- Internal and external assessment: strengths and weaknesses (evaluating personnel, product lines, geographic outreach, R&D initiatives, development of cost effective therapies); understanding competitive forces (e.g. community vs. hospital pharmacies) and the advent of alternative delivery systems, including managed health care organizations and mail order pharmacies
- Generation of strategy alternatives: generate strategies based on research and development of medical breakthroughs, new marketing techniques to improve quality of care, and formation of collaborative programs with managed health care organizations. Wholesalers may consider offering more services to current customers, negotiation of prime vendor contracts and increased distribution of generic pharmaceutical and over-the-counter products. Possible strategies for both community and hospital pharmacies include improved documentation of pharmaceutical services in an effort to justify reimbursement by third party payers, increased use of technology (computerization, automation, robotics) and public relations programs to educate the public regarding the mission of pharmacy practice.
- Evaluation of strategy alternatives: alternatives both feasible and infeasible
- Strategy selection and implementation: these projects and programs include pricing, and additionally defining warranties, labeling etc. for pharmaceuticals products
- Monitoring and feedback: evaluating macro and microenvironment; various strategic tools like the Balanced Scorecard, the BCG Grid and Porter’s Five Forces are used to constantly update the system.
I am interested in studying the roadblocks which might emerge as we see a shift in the healthcare system in terms of coverage, services and delivery routes. While long term planning is more structured, in the current scenario of chaos, what tactics will the entire industry use to streamline processes?
- Strategic Planning, The Economist, March 16th 2009 - http://www.economist.com/node/13311148
- Igor Ansoff, The Economist, July 18th 2008 - http://www.economist.com/node/11701586
- Strategic Planning in the Pharmaceutical Distribution System by Stephen Birdwell, Ohio State University - http://archive.ajpe.org/legacy/pdfs/aj5802193.pdf