Covid-19 impact on Pharma Commercial Models

    Impact of COVID-19 on the Commercial Models of Pharmaceutical Companies in the US

    5 mins read



    “The Chinese use two brush strokes to write the word 'crisis.' One brush stroke stands for danger; the other for opportunity. In a crisis, be aware of the danger--but recognize the opportunity.” 

    John F Kennedy

    The US pharmaceutical industry, which is racing to develop a vaccine to beat the novel coronavirus, is facing never-before-seen challenges. The hurdles include public policy mandates (e.g., shelter-in-place orders and closing of non-essential businesses) and sweeping restrictions placed on industry representatives from entering offices and hospitals to meet healthcare professionals (HCPs). These policy mandates and restrictions are causing pharmaceutical companies to rethink their go-to-market strategy.

    Three major dynamics introduced by COVID-19, which will affect the commercial models of pharmaceutical companies’ in the US post-crisis are:

    1. Drop-in Patient/HCP Interactions: According to a McKinsey report, about 80% of HCPs (surveyed from 10 countries, including the US) report a significant drop (62%) in patient volumes. Furthermore, the reduction in patient interactions varies by specialty.1 For example, the decline in the number of oncology-related visits is much less than that of cardiology (possibly reflecting patient or physician perceptions of urgency). Additionally, medical claims data indicate considerable geographic variations in the timing and severity of the patient-volume decline in the US. While the number of remote patient/HCP engagements have spiked, it has not offset the loss of in-person interactions.
    2. Decline in Total Sales Rep/HCP Engagements: Compared to pre-crisis interactions, HCPs in the US expect a 15% reduction in overall interactions with sales reps, according to the McKinsey report.1 HCPs also expect remote engagement with sales reps to be a more prominent part of the interaction mix post-crisis.
    3. Acceleration and Deepening of Global Recession: According to the International Monetary Fund’s (IMF) World Economic Outlook Report (April 2020), the global economy will experience the worst recession since the Great Depression.2 In June 2020, the unemployment rate in the US was 11.1%, higher than at any time in six decades (toward the end of the Great Depression). In comparison, during the Great Recession, a decade ago, the unemployment rate peaked at 10%.3

      foreign-linkLearn More - Can The Coronavirus Contagion Economically Infect The Global Pharmaceutical Industry?

    The short-term and long-term impact of these three major dynamics on the US pharmaceutical industry provides several implications for pharmaceutical companies as elucidated below:

    Force Short-Term Impact Long-Term Impact Implications for Pharmaceutical Companies
    Drop-in non-COVID-19 patient/HCP visits
    • Patients postpone well-being and follow-up visits
    • Reduction of vaccines
    • Trial of phone/ video visits
    • A backlog of visits will consume HCPs’ time after restrictions are lifted
    • A decline in patient visits4,5
    • Patients may seek more phone/ video visits
    • Increase in the relevance of direct to consumer (DTC) advertising
    • Educate on patient adherence and link between compliance and outcomes
    • Greater use of digital and video communication with patients
    • Increased focus on patient-centricity and measuring of health outcomes (HEOR and RWE)
    • Encourage and enhance patient disease management programs
    Drop-in face-to-face interactions between the pharmaceutical industry/HCPs
    • Minimal face-to-face interactions, programs, and conventions
    • HCPs busy with a backlog of visits
    • Drop-in promotion likely to reduce demand (sales impact)
    • Access to HCPs will decrease and phone/video, non-personal remote engagements will increase

    Sales Force Strategy and Operations Implications

    • Disruption of sales operations: call planning, incentive compensation (IC), sales management (coaching), Sales Force Automation capabilities (approved email and remote detailing), and reporting metrics
    • A movement to more indirect sales and digital interactions with HCPs
    • Avoid sending sales reps to meet HCPs while they address patient visit backlog
    • Missed speaker events and canceled local meetings
    • Reduced access increases $/call which could necessitate sales force reduction, realignment, and changes to call planning and targeting

    Marketing Strategy and Operations Implications

    • Increase in importance of brand messaging
    • Need to change marketing-mix
    • Increase in non-personal promotion
    • Greater need to capture non-personal promotion data
    • Increased requirement for omnichannel marketing
    • Impact on existing segmentation and need for new segmentation
    Acceleration and deepening of severe recession
    • Loss of commercial insurance
    • Patients will either be uninsured or covered with fewer benefits/higher deductibles, or Medicaid
    • Increase in affordability issues will need patient assistance
    • Reduction in medication compliance and adherence will produce lower health outcomes
    • Recession moves people to low benefit/high deductible plans and Medicaid
    • Provider and payer financial hardships lead to consolidation (on top of existing trend)

    Payer Market Implications

    • Reduction in commercial patients and an increase in Medicaid and low benefit/high deductible plans result in lower margins for pharmaceutical companies
    • Payers may look to more aggressively manage higher cost brands into generics, biologics into biosimilars, and press for greater lower-cost brand use
    • Payers may focus more on managing therapeutic classes that were once sacred such as HIV, oncology, and rare disease
    • Accelerated growth of health technology assessments by bodies such as the Institute for Clinical and Economic Review (ICER)

    Patient Access Implications

    • Uninsured and under-insured commercial patients require patient assistance to access many high-cost brands impacting profitability
    • Medicare patients also require patient assistance through charitable organizations that are non-promotional
    • Need to understand the role of samples versus bridge programs, vouchers, copay cards, and point of purchase copay offsets

    Sales and Marketing Implications

    • Increased pressure to enhance HCP engagement and demonstrate value to HCPs 
    • Uncertainties increase risk of forecasts, and lower estimates lead to reduced budget for promotions, which leads to further sales erosion
    • Increased need to understand ROIs and optimize marketing-mix per brand and across the portfolio

    In the future, it will be critical that pharmaceutical companies build new ways to work and interact with customers (including patients, prescribers, and payers). For some, that imperative might serve as a catalyst for changes in the pharmaceutical commercial model that companies have been looking to make for years (such as a shift toward customer centricity, digital engagement, and value-based outcomes).

    foreign-linkLearn More - Will The Coronavirus Pandemic Force The Life Sciences Industry To Shatter The Sales And Marketing Silos?

    Axtria recognizes that there is danger in any crisis, but there is also, often unrealized, opportunity for positive change. During the current COVID-19 crisis, Axtria can support clients with the following critical requirements:

    • Build artificial intelligence (AI) and machine learning (ML) capabilities for future local economic conditions and next best action (NBA)
    • Develop approaches for long-term patient adherence
    • Create robust analytical capabilities for actionable insights
    • Understand managed market access, plan control/design, and government control
    • Develop an efficient and integrated data management solution

    foreign-linkLearn More About Axtria's Commercial Model Design Capabilities


    1. Cohen O, Fox B, Mills N, and Wright P. COVID-19 and commercial pharma: Navigating an uneven recovery. McKinsey & Company (April 2020). Available at:
    2. Gopinath G. The Great Lockdown: Worst Economic Downturn Since the Great Depression. IMF Blog. Published on April 14, 2020. Available at:
    3. Iacurci G. Unemployment is falling. But it may be short-lived: ‘There’s no cause for celebration’. CNBC. Published on July 2, 2020. Available at:
    4. Aitken M, Spaeder J, Staub R, Resnick J, Grenfell A. COVID-19 Global Executive Briefing. IQVIA (April 20, 2020). Available at:
    5. Mehrotra A, Chernew M, Linetsky D, Hatch H, Cutler, D. The Impact of the COVID-19 Pandemic on Outpatient Visits: Practices Are Adapting to the New Normal. The Commonwealth Fund. Published on June 25, 2020. Available at: