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Business Strategy: Revenue Leakage — Pharma's $11 Billion Problem
| Author: | Eric Newmark |
| Document # | HI220793 |
| Published | December, 2009 |
| Document Type | Market Overview |
| Number of Pages | 25 |
| Number of Figures | 3 |
Overview
This Health Industry Insights report examines process inefficiencies surrounding claims management and drug reconciliation within the pharmaceutical sales channel, and discusses the primary pain points causing revenue loss. Questions answered within this document include:
- What is causing revenue leakage?
- What are companies doing to reduce leakage exposure?
- How large is the problem? Where is this money going?
Industry serialization and pedigree initiatives offer longer-term promise, but there are several process improvements that companies can make now to better align information flow and financial transactions with physical product flow, thereby reducing revenue leakage.
Eric Newmark, research manager for Health Industry Insights' commercial life science practice, comments: Revenue leakage causes pharmaceutical companies to lose approximately 4.4% of overall revenue on an annual basis. For 2009, most forecasts predict U.S. pharma sales will be roughly $252 billion. That means as an industry, pharma manufacturers will collectively lose over $11 billion through channel inefficiencies. That's equivalent to total revenue for a top 20 pharma simply disappearing each year."
Life Science Business Systems Strategy
Insights: Health Industry, Pharma
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