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The software company Model N (NYSE:MODN) has released its fifth annual State of Revenue report that found many pharma companies are grappling with staffing and economic challenges. In particular, 92% of pharmaceutical firms reported difficulties hiring qualified personnel.
A number of pharma companies are cutting staff this year.
Almost half, 47%, of pharma execs believed outsourcing was a permanent need for business operations and to address the staffing shortfall. In particular, nearly all pharmaceutical executives (99%) plan to use Business Process Outsourcing (BPO) to support their business. About two-thirds consider BPO to play a “substantial” or “significant” role. Another 31% expect BPO to have a “moderate” role.
Regulatory compliance concerns
In addition to staffing concerns, the survey also reflected that pharma companies face significant regulatory compliance challenges affecting their revenue management programs. A total of 97% of executives said they were adapting their financial controls to deal with those hurdles.
A total of 38% said that increasing price transparency requirements would affect their revenue management programs. Nine of ten pharma execs reported concerns that data collected through price transparency reporting could hurt their operations. Of those, 34% said such state pricing transparency mandates were a major concern.
Inflation Reduction Act remains unpopular
Many pharma executives have balked at the pharma provisions of the Inflation Reduction Act. In an earnings call, Novartis CEO Vas Narasimhan said the industry might pursue legislative action to reduce the legislation’s impact on the pharma industry. Narasimhan is the incoming chairman of the PhRMA trade association.
The 2023 State of Revenue Report from Model N was conducted by research partner Dimensional Research. It surveyed more than 300 executives responsible for revenue management at large pharmaceutical, medtech, high-tech manufacturing and semiconductor companies.
A total of 84% of cross-industry executives surveyed deemed inflation to be the most significant impact on innovation.
In addition, seven out of ten executives across the survey agreed that their industry is losing billions as a result of poor revenue management practices such as ineffective pricing and quoting. All the executives surveyed reported a strong interest in pursuing data-driven technologies to improve revenue management.