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'''Introduction'''

In this digest, we introduce a new collection on our portal: [[:Category:Pharma | '''B2B Digital Commerce In Pharmaceuticals''']].

Today, the pharmaceutical industry’s value chain is defined by pharmaceutical giants with significant resources and market power who focus primarily on working with HCPs (healthcare professionals), who, in turn, influence the ultimate demand for pharmaceuticals.

At the same time, we know from our experience that B2B relationships with distributors, wholesalers, pharmacies, clinics, and other entities are characterized by complex contracts and restrictions that result in high transaction costs.

As a result, the primary motivation for integrating B2B digital commerce solutions in the pharmaceutical industry is to reduce transaction costs, rather than to improve the customer experience for B2B buyers, as we've seen in many other industries. We've even seen B2B pharmaceutical marketplaces run by multiple vendors simultaneously, using them as a common B2B sales channel.

Pharmaceutical companies are also experimenting with the direct-to-consumer (D2C) model. This is driven not only by the desire to increase margins by eliminating unnecessary links in the chain (which is not always possible due to a large number of regulatory restrictions), but also by an attempt to address the emerging challenge of channel fragmentation, caused by the growth of the precision medicine segment, the number of very expensive drugs, and other specific market changes.

These changes will significantly alter the vision of the role of digital commerce in new distribution channels.

See below for our new collection of relevant materials on this topic. If you know of other resources that you think would be valuable to this collection, please add them using [[B2b-expert-wiki-contribution-policy|'''this submission link''']].

'''Pharmaceutical B2B Digital Commerce Today'''

'''[[Transforming-traditional-pharmaceutical-distribution-with-commerce-innovation]]''' by Zaelab: a well-structured and informative white paper that describes the critical capabilities that enable pharmaceutical companies to disrupt their markets. It provides insights into traditional pharmaceutical distribution models, explains the inefficiencies of the models, the aspects that make pharmaceutical companies ready for disruption, and so on. A pretty good description of the modern state of the pharmaceutical industry from a digital commerce perspective (Zaelab, 2023). 

'''[[Pharma-b2b-ecommerce-what-it-takes-to-win-online]]''' by Corevist describes five key functionalities that are important for a successful B2B eCommerce solution in pharmaceuticals. Although the article is a bit vendor-focused, digital commerce professionals looking for insights into B2B eCommerce in the pharmaceutical industry will find some useful takeaways (Corevist, 2021).

'''[[Trends-disrupting-pharmacy-value-pools-and-potential-implications-for-the-value-chain]]''' by McKinsey is a relatively old article that is still valuable for its particularly good analysis of key disruptive trends in the industry value chain, including the invasion of Amazon. The Amazon case (which illustrates the larger trend of traditional distribution models being disrupted) is described in detail, which is very valuable. While things are happening more slowly than expected, the trend is there, and the Eli Lilly case (see the article below) confirms it (McKinsey, 2018).

'''Upcoming Changes: The Role of Digital Commerce in the Pharmaceutical Industry of Tomorrow'''

The articles below will provide you with insights into important industry trends that are dramatically changing the pharmaceutical value chains, as well as the future role of digital commerce channels owned by pharma brands.

'''[[The-future-of-pharmaceutical-distribution]]''' by Zaelab focuses on predictions for pharmaceutical distribution and explains how digital commerce technologies will change B2B interactions in the industry, considering industry-specific challenges such as heavy regulation. Several parts of the article describe expected changes in the industry’s value chain, focusing on the upward trend in the application of the D2C model (Zaelab, 2023).

'''[[Channel-fragmentation-and-diversifying-product-archetypes]]''' Pharmaceutical Commerce is an in-depth analysis of the industry’s distribution models. The author, William Roth, explains the industry-specific challenges that result in the need to develop new business models for the entire value chain. Although the digital commerce topic is not the focus of this article, it is clear that building new digitally native business models is the most efficient (and probably the only) way to respond to these industry-specific challenges. The article will be useful for anyone involved in B2B digital commerce in the pharmaceutical industry (Pharmaceutical Commerce, 2023).

'''D2C Trends in the Pharmaceutical Industry: How It Works'''

Direct-to-consumer (D2C or DTC) is the rising trend in the pharmaceutical industry, illustrating the response of pharmaceutical brands to the new challenges of the industry. This trend will have a huge impact on the entire value chain and shape the vision of the role of B2B digital channels in pharma.

'''[[How-pharma-can-overcome-inflation]]''' by Pharma Manufacturing is a short article that describes the potential benefits that pharmaceutical manufacturers can achieve by integrating the D2C business model. According to the article, it can reduce costs, increase user adoption without sacrificing margins, and more (Pharma Manufacturing, 2022).

'''[[Insulin-pricing-could-an-e-commerce-approach-cut-costs]]''' by Pharmaceutical Technology provides a good illustration of an attempt to apply the D2C model that the industry is experimenting with (Pharmaceutical Technology, 2022).

'''[[Eli-lilly-partnership-with-Amazon-to-boost-presence-in-diabetes-and-obesity-markets]]''' by Pharmaceutical Technology reveals some aspects of the D2C strategy of Eli Lilly, the largest pharmaceutical company by market value, and announces Eli Lilly’s collaboration with Amazon. This is another illustration of the D2C trend in the pharmaceutical industry. It also mentions that Eli Lilly’s recent changes should push the direct competitor Novo Nordisk to strengthen its digital distribution channels, which is a sign of the growing digital competition in the industry (Pharmaceutical Technology, 2024).

'''Check previous B2B Experts Digests'''

* [[B2B-experts-digest-2024-03-march-omnichannel-in-B2B]]
* [[B2B-experts-digest-2024-03-march-ecommerce-search]]
* [[B2B-experts-digest-2024-02-february-b2b-marketplaces]]
* [[B2B-experts-digest-2024-01-january]]
* [[B2B-experts-digest-2023-12-december]]

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