Is Pharma’s Business Model like McDonald’s? Are Pharma Managers Graduates in Hamburgerology?

Is Pharma’s business model like McDonald’s? Doing things over & over again without innovation?

McDonald’s is famous for its Hamburger University, a training facility at the McDonald’s Corporation global headquarters in Chicago, Illinois. It instructs high-potential restaurant managers in restaurant management.

More than 5,000 students attend Hamburger University each year and over 275,000 people have graduated with a degree in Hamburgerology.

Sounds familiar? Pharma’s training has been on similar lines – hire people continuously and put them through the grind of mugging up essentials of drugs for diseases that the particular company sells.

While the McDonald’s model is ideal for its business of replication, it has outlived its utility in healthcare and drug companies are in danger of being reduced to mere suppliers of drugs to new digital platform businesses unless they learn to innovate.

Hamburger is a commodity, McDonald’s hamburger is a branded hamburger, much like the branded generics of Indian Pharma.

McDonald’s ensures loyalty because of its repetitive process and product integrity that ensure the same customer experience at any outlet. A customer does not have to think much about the product’s cost, taste and quality while ordering, unlike when he visits a gourmet restaurant where each restaurant has it own unique menu based on its chef’s expertise.

McDonald’s hires and trains people to become good managers, who are adept at ensuring process integrity and customer delight. The hygienic ambience, friendly and efficient staff, clean restrooms are the add-on services that keeps the customer coming back for more.

Indian Pharma has something similar on offer – assurance of quality drugs at a reasonable cost and a plethora of goodies via the CRM – customised to the Rx potential of doctors and discounts for retail pharmacies ensure that the RoI is well managed.

However, McDonald’s has begun to stumble and you can read about it in this Forbes article

What lessons can pharma learn from McDonald’s?

Lesson No.1 – Managers are good at ensuring repetitive functions. It takes leaders to innovate.

Lesson No.2 – When the world changes, managers keep doing what they know best and fail.

Lesson No.3 – What Got You Here Won’t Get Your There. Pharma will have to move from managing and creating managers to developing leaders who will understand the changes that are happening around them in terms of changing customer behavior and innovate newer business models to engage customers and create great experiences for them.

And this is what digital transformation is all about – not webinars and WhatApp and emails but to offer services that enables HCPs to deliver better patient care.

Key Point: Indian Pharma needs leaders who are aware of the changing HCP and patient behaviors and are willing to experiment and innovate to create pill plus services and not managers who flog the dead horse.