Business Strategy: There's a Hole in My (Revenue) Bucket! Revenue Leakage in Life Sciences — Who's Plugging the Holes, and How Can They Help?
This IDC Health Insights report provides illustrative examples of how life science companies today are working to reduce their exposure and improve their approach to revenue leakage and provides insight into how several key technology vendors and consulting firms are helping life science companies along this journey. Pharmaceutical manufacturers recognize that reconciliation process leakage exists and are eager to improve their bottom line by correcting these issues. Awareness around chargeback-related revenue leakage has continued to rise, with 63% of manufacturers considering this issue to be a large or medium-sized problem as long ago as 2009 and likely higher today.Reducing revenue leakage remains a major opportunity for pharmaceutical manufacturers to improve their bottom line while under top-line pressure from regulation, patent expiration, and industry consolidation. Headlines scream about out-of-control drug prices, especially for specialty and rare disease formulations. By addressing chargeback reconciliation and other sources of revenue leakage more thoroughly, efficiently, and accurately, pharmas can ameliorate some of the effects of these converging forces.Michael Townsend, research manager for Life Science Business Systems Strategies at IDC, says, "Revenue leakage and revenue management automation remain an important issue for both manufacturers and distributors for pharmaceutical, biotech, and medical device products. We have seen that through the careful study, documentation, and improvement of processes, coupled with robust software and analytics solutions, companies can significantly reduce their exposure to revenue leakage and improve their bottom lines. As regulation concerning serialization and product tracking takes effect, we expect continued innovation and improved automated solutions from vendors and systems integrators, leading to greater savings."
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