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The 2020 State of Revenue Report: Key Findings Interpreted

June 9, 2020

As we close the 2nd quarter of 2020 amidst global economic uncertainty and a pandemic, life sciences companies are facing more change than ever before. In a recent study conducted by Model N, the 2020 State of Revenue Report (SORR), we looked closely at how companies across industries were managing, growing and optimizing their revenue management capabilities. The study surveyed 306 revenue management executives across industries, including 77 from the pharmaceutical industry and 76 from the medtech space. The SORR aimed to understand the reality of modern revenue management and sought to identify the key areas in which companies can do better, the role of technology and how leaders are dealing with the challenge.

Earlier in June 2020, we held a webinar in which a panel, including two of Model N’s business and regulatory leaders, Melonie Warfel and Jesse Mendelsohn, and Odalys Caprisecca, a market access leader at AstraZeneca and a Model N customer, presented and interpreted the findings for the audience. Key highlights from the SORR and discussion included:

  • Revenue management is more challenging than ever before. 82% of life sciences respondents to the SORR indicated revenue management had become more challenging in the past year. Our panelists were unsurprised at this number and joked that they were surprised it wasn’t higher! The panel explained it wasn’t just complexity that was growing but also scrutiny and regulatory compliance demand, as many more data sources are being used to track and monitor performance. In addition, more conditional agreements like value-based agreements require analysts to triangulate multiple sources of information.
  • Challenges abound in revenue management. Respondents reported that the top challenges were volatile pricing and market demands, managing global pricing, and controlling revenue leakage. Odalys Caprisecca of AstraZeneca commented on this issue, noting that there is “increasing demand on our gross-to-net as our markets become extremely competitive,” referring to the ever-growing gross-to-net bubble, the difference between the list price of a drug and the net price after rebates and other discounts are applied, an issue which challenges manufacturers to deliver fair and transparent prices to patients. Panelists also discussed consolidation in the industry, visibility into information and tracking products in the supply chain as obstacles.
  • Regulatory compliance is leading to lost revenues. When asked how their companies experience revenue loss as a result of regulatory compliance, the top reasons were accepting lower price points to avoid regulatory risk, missing out on new customers where there are regulatory concerns, and delayed revenue as a result of reviewing regulatory requirements. According to panelist Jesse Mendelsohn, “it’s a shame that manufacturers in good faith are working towards finding new ways of expanding access, and improving and optimizing pricing, but at the same time, because of either perceived or actual regulatory risks, they’re not able to do that.”
  • Regulatory requirements have failed to adapt. A whopping 86% of respondents in the life sciences indicated they are concerned that new or additional regulations could impact future profits. Our panel had a lot to say about this issue, stressing that regulations had failed to adapt to the new care settings and product types they were introducing. The coronavirus crisis was noted as a factor, with the treatment of patients and the sites where treatment happens changing even more rapidly as a result. But the problems predated this, as AstraZeneca’s Caprisecca noted, “we’re going to continue to see changes [that] could lead to complexity with reimbursement contracting … and government reporting as well.” The panelists continued to expand, noting that regulations were stifling innovation, hampering technologies like digital medicine, targeted therapies and biologics, extending to “just about anything that’s not standard bottles of pills,” said Mendelsohn.
  • Digital transformation will help. Respondents to the SORR survey are counting on digital transformation to make a difference, citing artificial intelligence as a key technology. Technologies associated with digital transformation like cloud, AI and analytics are expected to have the greatest impact on data visibility (47%), the speed and accuracy of doing business with partners (43%) and identifying and reducing revenue leakage (42%) for life science manufacturers.
  • This too shall pass. The panelists noted that eventually, after the coronavirus crisis and the 2020 election have passed, the problem of drug and healthcare costs will resurface, and all can agree that drug prices are too high and healthcare is too expensive. It’s clear that more regulation of these issues will come to pass but the exact content of that regulation has yet to be determined.

Prior to the latest upheaval, revenue management was already challenging and is now even more critical. The SORR provides valuable insight into revenue management leaders views on the future of the industry. For more insights from our panelists, visit our website for the replay of the webinar. For a closer look at the 2020 State of Revenue report data, please feel free to download the full report. If you’d like to speak to someone about Model N products and services, email us at

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