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Bain & Company research in multiple therapeutic areas has shown that when physicians prescribe a drug, the efficacy, safety and side-effect profile of the drug account for only 50% to 60% of the physician’s choice—and that figure has declined over time. The other 40% to 50% is based on a range of physician and patient experience factors that leading companies target to differentiate their products. Looking at the past three years, only 8% of healthcare executives agreed that the best product no longer wins; instead, innovating in the services, information and customer experience around the product is critical. That number jumps almost fourfold, to 28%, when executives look ahead to the next three years. The product matters, but other innovations are increasingly important.
Dave Fleisch and Kalyan Jonnalagadda are partners with Bain & Company’s Healthcare practice; both are based in Bain’s New York office.
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