Chapter 3Old Models and NewIt's the end of one era and the beginning of another. Four new business models are emerging in the pharmaceutical field; companies with roots in other industries are crossing into the healthcare market; and entrepreneurs are coming on scene, powered by digital technologies and motivated by the promise of growth, profit, and bragging rights for expanding the definition of “care.”

Some companies have already made significant strategic choices; as a result, several highly differentiated business models are solidifying. Some of these are opportunistic, leveraging managerial talent and capabilities with a focus on value for shareholders. Many represent substantial transformations—wholesale changes focused on improving patient outcomes and on creating value for the health system overall through high levels of engagement with patients and consumers, a redefinition of what a product offering includes (as the therapeutic, technologies, and digital enablement), and revenues tied tacitly or explicitly to outcomes.

Given the scope of these changes, most if not all of these new models will rely on new kinds of business-to-business relationships and collaborations, some with long-trusted customers that will evolve into partners and risk-sharers, and some with entirely new companies and agreements.

This chapter describes the four models we have observed at a high level; in Chapters 4 through 7, we will discuss each one in turn in more depth, assessing in greater ...

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