Value not volume drives US life sciences
Harrison Shapira, Vice Consul for Life Sciences with UKTI in Los Angeles outlines some key market changes in the US Life Sciences sector ahead of the UKTI East event in Cambridge on ‘Building Success in the US.’
What are the key opportunities for East of England companies from your sector in main areas of the US?
The US life science sector offers opportunities in biotechnology, pharmaceuticals, medical devices, healthcare IT, research tools & reagents and for life science service providers.
Key areas of the US that East of England companies should be aware of are Boston, Washington D.C./ Research Triangle Park North Carolina, New York/New Jersey, Texas, California; San Francisco Bay Area, Los Angeles, Orange County and San Diego, the Mid West Region; Chicago, Minneapolis, Indianapolis.
These life science cluster regions are home to the major markets for the industry. Any US major city will have hospitals according to its population demographic, as such if you need to access healthcare providers, you should be aware of the major cities.
What would be your advice to East of England companies from your sector looking to develop business in the US?
In regards to East of England life sciences companies looking to develop their business in the US, I would advise having a clear understanding of your unique selling point.
Knowing very clearly, what makes your company, service, or product; interesting, better, cheaper, faster, or some process easier is essential to being competitive in the US market. This should be clearly explained on your website and in marketing collateral as well.
Additionally, I would advise conducting market research on the competitive landscape of the market. Knowing the major players, how they do business, the innovations coming to market, the regulatory and financing conditions facing your segment of the industry, as well as how might health care reform and reimbursement affect your business in the US is essential.
How are you and your team able to help companies looking to get involved in relevant US opportunities?
UKTI are able to assist UK based companies via our Overseas Market Introduction Services (OMIS) that typically takes the form of a structured research and outreach project, conducted by UKTI with the goal of identifying potential partners, customers or key influencers. OMIS can also be tailored to provide more strategic market intelligence, hosting events & receptions or press release services.
UKTI can also introduce UK companies to local legal, accounting, banking and professional service providers to advise on doing business in the US.
What’s the view in the US?
Deloitte LLP’s vice-chairman and U.S. Life Sciences sector leader, Terry Hisey, has recently given an upbeat view of the market pointing to encouraging signs of growth in 2014, with companies gaining greater clarity on implementation of the Affordable Care Act (ACA), becoming increasingly better at capitalising on emerging market opportunities, and incorporating commercial evidence into their strategic decision-making.
Additionally, developing trends in demographics and disease are expected to continue boosting drug consumption, while the inclusion of millions of uninsured Americans under the ACA (via health insurance exchanges and Medicaid expansion) is forecast to increase revenue for drug makers.
The shake-up in the market driven by the reforms will force life sciences companies to focus on value rather than volume to ensure their ability to compete. Companies will need to deal with a new range of stakeholders and customers than they traditionally have done - such as patient groups and hospital administrators. New business models will be needed to recognise the power of new decision makers in product pricing and selection.
To prosper, Terry Hisey suggests organisations will need both corporate and individual capabilities in advanced analytics, population health management, market trends and customer segmentation, as well as account management to deal with more powerful/non-clinical buyers. On-going strategy will require a strong programme in place to access meaningful, data from the patients and healthcare provider organisations to not only support product approval but also communicate key values to the market.
To foster growth, firms should explore non-traditional external relationships; increase value-based contracting; use alternative distribution channels; and define a value proposition beyond the pill or the device for example being a care management partner independent of a product.
R & D will continue to be an important focus. Thorough market research, effective clinical studies and accessing big data will help companies better appraise their products when deciding which to move forward to clear the hurdles of FDA approval and marketplace adoption.
• ‘Building success in the US’ will take place on Thursday March 6 at the Trinity Centre, Cambridge Science Park, starting from 9:00am to 15:00 with tickets costing £25+VAT.