Axtria Blogs have continued to follow the uncertain course of the US economic recovery, like an “accordion” or repeating “W-shape” induced by the COVID-19 pandemic [1-2]. Newly released data and economist predictions now suggest that recovery of the US economy will take years (until 2022), not months, in returning to a pre-coronavirus economic level . Federal Reserve Chair Jerome Powell has likewise cautioned that the US economy needs continued stimulus from Congress to maintain the recovery, something that appears unlikely before the presidential election, given the political stalemate between Democrats and Republicans .
Every year, many life sciences organizations host speaker conference events, or speaker programs, across the globe. These speaker programs are one of the most successful sales and marketing strategies used across the industry. For most companies, these events are a beacon of product launch announcements and promotion, executive networking (on technology, patient care strategies, and synergy avenues), and balanced information exchange between industry representatives. Key Opinion Leaders (KOL) and Healthcare Professionals (HCP) interact with one another to discuss relevant subjects such as therapy areas, drug development, clinical outcomes, patient population trends, and patient interests. The expected results of such events include appraising HCPs of the latest industry developments, educating them, and retaining them as customers, as well as new lead generation, and an overall increase in sales productivity and marketing ROI.
Choosing Between Food and Medicine
The COVID-19 induced recession has taken another ominous turn as the Census Bureau recently reported that almost 30 million Americans responded in a survey that they did not have enough food to eat at some point during the week before July 21 . A record number of people are also going to food banks . The reason for this situation is the combination of COVID-19 mandated shutdowns with their resulting effects and the economic consequences from high unemployment generated from these business closures. This turn of events is not surprising as similar effects were seen during the Great Recession of 2007-2009. The economic fallout from the COVID-19 induced recession is much more severe, with the unemployment rate still above 10% (the Bureau of Labor Statistics reported a 10.2% rate for July 2020) . This means people are increasingly having to make tough choices about where to spend scarce dollars for necessity items like food, medicine, rent/mortgage, or essential utility bills.
“U.S. Economy Sees Record Downturn”
The headline on the record drop in U.S. GDP for Q2 2020 at an annual rate of 32.9% and 9.5% from the previous quarter, The Wall Street Journal, print published July 31, 2020 .
Many in the pharma industry currently fear that the broad use of price controls, once thought of as being theoretical and a remote possibility, is now an inevitability. This author has previously noted in articles published on the Axtria Research Hub that the imposition of price controls represent an existential threat to the industry. The political forces that once shielded the industry from the imposition of direct price controls for federal reimbursement on programs like Medicare have been severely weakened. The imposition of such federal program controls will effectively spillover into private insurance markets.
“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.
“VIRUS WIPES OUT 5 YEARS OF ECONOMIC GROWTH”
The headline on the record drop in US GDP for Q2 2020 at an annual rate of 32.9% and 9.5% from the previous quarter, The New York Times, print published July 31, 2020.
With the increase in the number of touchpoints for a Healthcare Physician (HCP), it has become more important for pharmaceutical companies to personalize marketing efforts at the HCP level. Segmentation forms the backbone of customized marketing and is a critical step in converting brand strategy into actionable tactics. A robust segmentation process enables effective targeting – a potential group of customers receiving communication through preferred channels from the pharmaceutical companies.
Will the recovery of local economies from the coronavirus pandemic take the shape of a V, U, Nike Swoosh, or W? The “W” shape is gaining more acceptance from economists as they consider the recession at a national level.1,2 Here we consider the possibility that local economies may go through an "Accordion Effect": a series of W’s as they navigate the next several quarters. Each of them waxing and waning differently; an ensemble of accordions.
On June 27, 2020, CNN reported the somber news that five states: Florida, Georgia, Tennessee, and even significantly low population density states like Utah and Idaho recorded their highest number of coronavirus cases in one day. Global deaths have reached half a million. 125,000 people have died in the United States.
Over the last several months, federal, state, and local governments as well as individual towns have made difficult decisions around applying and relaxing restrictions around social distancing to curb the spread of the pandemic. Leaders have been in the unenviable position of making difficult tradeoffs between sustaining public health and protecting the healthcare system from unmanageable spikes in COVID-19 cases, versus ramifications on the social and economic wellness of the population.
As of today, there is no vaccine or effective treatment for COVID-19. It is not known with certainty when one will be available. The approach of the fall and flu season will likely bring added burdens to the healthcare system with a further surge in COVID-19 cases. The degree to which these impacts happen will differ from geography to geography. A myriad of factors will affect the geographic variation in COVID-19 cases, including differences in policy decisions and the compliance of local populations to those policies and guidelines.
One likely possibility is that different geographies will go through an “Accordion Effect,” experiencing multiple cycles of reopening, reclosing, and reopening again until a vaccine becomes available, and the world starts recovering and moving toward a new equilibrium. The impact on local economies is also likely to oscillate during this uncertain period, as employers make decisions that shift in risk-appetite over time based on how their industry sector is evolving.
The following blog has been written by Shikha Singhal, Axtria’s People Practices leader. Shikha is passionate about building positive workplaces that exude success, happiness, and pride. During the COVID-19 pandemic, she has endeavored to ensure Axtrians remain productive, motivated, engaged, and connected.
There is no denying that these are unprecedented times, times of high stress, and uncertainty across the globe. Unemployment rates are at an all-time high. There is vast distress resulting from delayed or deferred decisions and processes – be it in hiring or onboarding or performance appraisals. The pandemic is forcing businesses across the globe to slow down with the consequent impact on employee morale and overall workplace culture.