Question

In lecture 2 of week 1, healthcare was proclaimed to be the most complex industry. Discuss this claim and whether you agree or disagree. Support your position with appropriate references

Answer 1

In 2015, the U.S. spent $3.2 trillion on health care, an astounding 17.8 percent of GDP and about $10,000 per person. A significant portion of American healthcare spending — more than $323 billion in 2016—is going to cover prescription drug costs. Therefore, it makes sense that the pharmaceutical industry which accounts for almost 2% of the country's annual economic activity is unprecedented in its size when considered alongside other powerhouse sectors such as retail, manufacturing, professional services, and even real estate.

While each is complicated on its own, drug marketers face a vast set of challenges in engaging with customers— and monitoring their conversions. Unlike most products and services, buying decisions related to prescription pharmaceuticals almost never fall to the end user (i.e. a patient) exclusively. Usually, a patient's health care provider (HCP) has the most direct control over whether Drug A is administered rather than Drug B, but insurance companies and government entities Medicare, Medicaid, VA also often exert influence.

The problem for marketers is that such queries occur completely offline. It is effectively impossible to tie a particular ad impression whether it is delivered online, on television or elsewhere to a patient question, let alone to a conversion (i.e. a decision prescribing HCP). There may well be a link between an ad campaign for a particular drug and an increase in the popularity of the drug, but it is difficult to define causality as they can, say, in an ecommerce setting where a click on a banner ad leads directly and, importantly, to a purchase "traceably."

Likewise, hospitals and other care facilities create integrated delivery networks (IDNs) to harness the strength of collective purchasing. Within one operational umbrella, an IDN integrates diverse health care providers across the entire care spectrum, standardizing their clinical activities — in terms of treatment protocols, brand preferences and procurement procedures.

The drug advertising landscape is undeniably labyrinthine— end users, clients, are "hidden" behind HCPs, frequently hidden behind hospital boards, hidden behind GPOs and IDNs, but that doesn't mean all the effort is futile. In general, the rapid digitization of healthcare gives drug advertisers an unparalleled opportunity to speak in new and exciting ways to each of these product segments.

Source- Economic Times