Challenging the status quo is never easy. Neither is being the underdog. Startups face both of these challenges when trying to break into existing industries dominated by well-established players.
Differences in the size, speed, processes, and culture of a company make it challenging for all startups to compete, regardless of the industry. For newcomers or smaller startups in their respective industries, this competition may seem daunting and the road to funding difficult, but this doesn’t need to be the case. What the legacy, established companies gain in size, they lack in flexibility and creativity.
Startups can capitalize on the gaps in the market, and become experts at doing that one thing well. In the Pharmaceutical industry, one of the major gaps is an effective, and personalized customer experience.
There have been three major societal shifts in recent years that are bringing to light the gaps with the traditional pharmacy model. A changing consumer sentiment and the use and adoption of technology are creating a wider opening for startups to enter the market and provide today’s consumers with a more personalized, and effective pharmacy solution.
Consumers want to have more agency in their medical decisions
The Deloitte Center for Health Solutions’ conducts a biennial survey to understand consumer behavior and attitudes in the U.S. healthcare system. The 2020 survey found that consumers are increasingly willing to seek information outside of their doctor to understand costs and treatment plans when considering tracking and treating their health conditions. In fact, 51% of consumers surveyed said they were very or extremely likely to tell their doctors when they disagree with them. Consumers are instead turning to the latest tech tools to gather information and track their health conditions, and are then using that data in conjunction with their medical record data to make decisions.
Adopting and Leveraging Technology
The COVID-19 pandemic drastically affected the way consumers prefer to receive medication and medical services. The health-safety concerns made more consumers want to have their medications delivered to their door and with the breadth of direct-to-consumer brands in the market today, consumers demand their health care be delivered the same or the next day.
The pandemic was a seismic catalyst for digital transformation with the adoption and acceptance of an array of new digital technologies. Patients and providers welcomed the accelerated pace of technology adoption to make their lives easier, including the widespread acceptance of telemedicine. With 68% of physicians stating they believe virtual visits will have a lasting impact on how doctors see patients, more organizations are working to incorporate telemedicine as a part of their ongoing business model. For patients that used telemedicine in 2020, there was a reported increase in the access to Rx information than from in-office visits in 2018.
Utilizing existing technology to serve new purposes
In addition to the adoption of new technologies, during the COVID-19 pandemic consumers turned to existing technologies to complete tasks they previously completed in person. To eliminate the risk of the grocery store, consumers completed more grocery shopping purchases via apps, and items that used to be picked up at the local drugstore were now ordered online.
In addition to an increase in online shopping for essentials and home-related categories, McKinsey’s research indicates that over-the-counter (OTC) medicine purchases are expected to grow by 44% in 2020.
And now, the answer is consumer-focused startups
Due to the changing consumer sentiment towards the health care process, access to and utilization of technology, new health tech startups finally have room to address the gaps in the healthcare industry that consumers are looking for.
There’s room for new players to ask “why” we’re approaching problems a certain way and challenge the way things have historically been done. Today’s startups have a chance to make a name for themselves by seeking to solve the same problems with new solutions.
While there is still undoubtedly an uphill battle to climb, the current climate offers more opportunities for nimble, fast-acting startups, including:
– Niche offering/clientele: Startups in the space focused on certain offerings such as women’s sexual health or LGBTQ patients are poised for strong growth through their unique corner of the market.
– Meeting consumers where they want: There is a growing demand for more accessible services and products to make it easier than ever for consumers to take control of their health. Startups that operate at the intersection of timely delivery and accessibility will be able to push through against antiquated pharma businesses.
– Understanding the market before acting: Unlike traditional pharma companies, startups have a unique opportunity in that they have the time to understand and perfect their target audience before ever going to market. Take the time to understand what your goal consumer wants and how they want it, and then build your business model and go-to-market strategy around this. Startups that use their “greenness” to their ability will be the ones still standing years down the road.
The U.S. pharmaceutical industry will be worth $685.45 billion by 2023. The growth in this market is predicted on the basis of various factors like market drivers, current and upcoming trends, current growth patterns, and market challenges. By understanding the market, meeting consumers on a personal level when and where they want, and offering a niche product or targeted audience, startups can begin to outpace their larger competitors.
About Aaron Ferguson
Aaron Ferguson is the Chief Operating Officer and Co-founder at Vytal. Vytal offers comprehensive, compliant technology solutions that enable businesses to manage, grow, and scale their healthcare operations. Our data-driven, direct-to-patient eCommerce platform enables healthcare manufacturers to reach patients and boost brand awareness.