Focusing on Product Development and Improving Operations to Drive Growth
SAN MATEO, Calif. — September 15, 2020 – According to a new survey released today by Model N (NYSE: MODN), industry professionals in pharmaceutical and medtech companies are identifying new priorities to address the business challenges and recovery around COVID-19. Companies are predicting a strong second half, with 55% of respondents focused on growth in current products or on new product development in 2020. Other key priorities for the remainder of the year include leveraging technology to eliminate system or process inefficiencies (45%), enhanced regulatory compliance procedures (33%), uniting disconnected company systems (27%), and eliminating revenue leakage (21%).
Model N, the leader in cloud revenue management solutions, fielded the survey to pharmaceutical and medtech professionals in July 2020 in order to understand more about key industry concerns around the pandemic. Survey topics included financial challenges and the industry’s response to the pandemic, as well as plans for new business activity, future product launches, a longer-term economic recovery, and attitudes around technology.
The survey findings reveal that other factors that create financial challenges for companies include complications with government regulation (31%) and the fact that companies are running outdated or inefficient technology (21%). “Our customers are at the forefront of important frontiers in life sciences, including diagnostic and pharmaceutical development,” commented Model N General Manager of Life Sciences Melonie Warfel. “Our research is designed to shine a light on their priorities – providing valuable industry insights which are especially critical during these uncertain times.”
Revenue Impacts and New Priorities
In terms of impact on company revenue, respondents indicated that 40% of limited investment in emerging technologies negatively impacted revenue, while others cited changes in government regulations (38%), workforce training (30%), and discount and rebate pressure (27%) as issues.
The survey also found that nearly half (49%) of pharmaceutical and medtech professionals say that recovery from COVID-19 is a top priority for the remainder of 2020. Current opinions about the recovery are in line with today’s unpredictable pandemic reality — 37% think recovery will take one year. About one-fifth of the respondents (22%) predict a two-year recovery, while 18% say it will take only six months.
Market Challenges and the Impact of Technology Adoption
Technology is integral to the success of today’s leading pharmaceutical and medtech companies. According to Model N’s research, over two-thirds of respondents (68%) said companies need to invest more in technology to solve financial and revenue management challenges, with 40% reporting that digital transformation and similar initiatives were yielding the most promising solutions.
Even in the absence of a pandemic, contract compliance and government regulations, along with pricing issues, present consistent financial challenges to pharmaceutical and medtech firms. When asked about fixing these common problems and avoiding “leaving money on the table,” 21% cited better management of rebates, and 20% said that more consistent pricing across buyers would help. Some 26% noted that better management of government regulations could help fix pricing issues, while 25% indicated contract compliance could help.
“The survey data tell us that pharmaceutical and medtech companies are looking forward, and they see technology as a positive enabler,” continued Warfel. “Executives are ready not only to recover from the current pandemic, but they’re also eager to address key ongoing issues like driving regulatory compliance and eliminating revenue leakage – while continuing on a path of innovation.”
About Model N
Model N is the leading provider of cloud revenue management solutions for life sciences and high tech companies. Driving mission-critical business processes such as pricing, quoting, contracting, regulatory compliance, rebates, and incentives, our software helps companies know and grow their true top line and maximize every revenue moment at speed and scale. With deep industry expertise, Model N supports the complex business needs of the world’s leading brands in pharmaceutical, medical technology, semiconductor, and high tech manufacturing across more than 120 countries, including Johnson & Johnson, AstraZeneca, Novartis, Microchip Technology, and ON Semiconductor. For more information, visit www.modeln.com.
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