How companies can create competitive advantage by addressing social issues through their business
CHDR・2 minutes read
The speaker from FSG explores the concept of shared value in the pharmaceutical industry, emphasizing the potential to transform global healthcare through innovative business approaches. Examples from companies like Novartis and Novo Nordisk demonstrate how shared value strategies can improve access to essential medicines and drive revenue while addressing societal needs.
Insights
- Shared value, a concept distinct from traditional philanthropy, focuses on creating economic and societal value through core business activities, potentially revolutionizing the healthcare sector globally by addressing social issues at scale.
- Successful implementation of shared value initiatives in the pharmaceutical industry involves adapting products to local needs, forming strategic partnerships, and innovating business models to improve health outcomes for underserved populations, showcasing the potential for companies to enhance competitiveness while positively impacting communities they operate in.
Get key ideas from YouTube videos. It’s free
Recent questions
What is shared value in business?
Shared value is a concept that focuses on solving social problems through core business activities, creating economic and societal value in the process. It is distinct from philanthropy and corporate social responsibility, aiming to address social issues at scale by integrating them into the company's business model.
How can shared value benefit pharmaceutical companies?
Shared value can enhance a pharmaceutical company's competitiveness while advancing social and economic conditions in the communities they operate in. It offers opportunities to transform health outcomes for underserved populations, generate revenue, and innovate in various aspects of the business, such as product development, market adaptation, and value chain optimization.
What challenges exist in the pharmaceutical industry regarding shared value?
Challenges in the pharmaceutical industry include the distribution of benefits primarily in developed countries, leading to significant gaps in access to essential medicines in developing regions. Overcoming these challenges requires a focus on creating shared value initiatives that address the specific needs of underserved populations globally.
Can you provide an example of shared value implementation in healthcare?
An example of shared value implementation in healthcare is a project in India targeting diarrheal disease. This project highlighted the complexities of implementing a product in a health system and emphasized the importance of understanding local dynamics for effective impact. By addressing a critical health issue through shared value initiatives, companies can create positive change while driving business growth.
How do businesses measure success in delivering health outcomes?
Success in delivering health outcomes requires businesses to measure both social and business success, as they are interconnected. Companies need to develop skills to identify unmet health needs within markets and improve health systems, which may not traditionally be found within pharmaceutical companies. By focusing on measuring impact and outcomes, businesses can ensure that their shared value initiatives are effective in creating positive change.
Related videos
NextMed Health
The Future of Pharma with Jeremy Levin
Sustainability Illustrated
Creating sustainable value for YOUR business
Starweaver
Understanding the Pharmaceutical industry | Starweaver
Welcome to the Jungle
Découvrez la culture d'entreprise chez Coca-Cola European Partners France
TEDx Talks
TEDxLincoln - Jay Wilkinson - Company Culture
Summary
00:00
"Transforming Healthcare: Shared Value in Pharma"
- The speaker works with a non-profit management consulting firm called FSG, founded by Harvard Business School professor Michael Porter, focusing on the relationship between business and society.
- FSG delves deeper into the concept of shared value, initially introduced in a Harvard Business Review article, by examining its application in various industries, starting with pharmaceutical and medical technology.
- The speaker, a management consultant, has experience working with pharmaceutical companies, global health funders like the Gates Foundation, and organizations involved in global health initiatives.
- Shared value is seen as a transformative approach that can revolutionize healthcare globally and potentially save the pharmaceutical business model.
- An example is shared of a project in India targeting diarrheal disease, highlighting the complexities of implementing a product in a health system and the need to understand local dynamics for effective impact.
- Shared value is distinct from philanthropy and corporate social responsibility, focusing on solving social problems through core business activities and creating economic and societal value.
- The potential for shared value lies in its ability to address social issues at scale through an economic engine that reinforces activities targeting social problems.
- In the pharmaceutical sector, shared value can enhance a company's competitiveness while advancing social and economic conditions in the communities they operate in.
- Challenges in the pharmaceutical industry include the distribution of benefits primarily in developed countries, with significant gaps in access to essential medicines in developing regions.
- Shared value offers opportunities for pharmaceutical companies to transform health outcomes for underserved populations, generate revenue, and innovate in product development, market adaptation, value chain optimization, and local cluster development.
16:37
Innovative Healthcare Solutions Expand Access in Asia.
- A company faced a challenge to grow their business in India, where they only had a 2% market share at the time.
- They developed a portable ECG machine, initially priced at $800, significantly lower than GE's versions costing $2,000 to $10,000.
- Engineers in Bangalore reduced the machine's cost to $500, making cardiac monitoring affordable to rural Indians.
- Over 10,000 units were sold primarily to individual physicians, expanding access to testing services.
- GSK and Pfizer partnered to create Vive Healthcare, combining their ARV portfolios with an 85-15 revenue split.
- The partnership aims to provide consistent HIV medicines through a low-margin, high-volume model.
- Novartis entered India with a for-profit social business, serving 750 million Indians earning $1-$5 a day.
- Their portfolio includes 11 therapeutic areas with products adapted for local conditions and affordability.
- Novartis broke even in less than three years, covering 42 million people in 30,000 villages.
- Novo Nordisk adapted insulin products for the Chinese market, opened local facilities, and focused on physician training and awareness campaigns to improve diabetes management.
32:45
Measuring Success in Health Business Partnerships
- Success in delivering health requires measuring both social and business success, as they are interconnected. Businesses need to develop skills to identify unmet health needs within markets and improve health systems, which may not traditionally be found within pharmaceutical companies.
- Businesses are urged to form new partnerships, challenging conventional relationships between industry and non-profit organizations, to address market failures and innovate business models for improved health outcomes. Ongoing collaborations with pharmaceutical companies like Lilly, Novartis, and Merck aim to push boundaries and potentially revolutionize the healthcare industry.
