The State as a Customer

Strategies for Pharmaceuticals Companies

In the Iliad, Homer describes a battle between the heroic Bellerophon and a fantastic monster called a chimera. Part lion, part goat and part serpent, the creature is striking not only for its fearsome attributes, but for the incongruity of its parts. How do a lion, goat and serpent fit together? And how can one craft a strategy for dealing with such a difficult-to-define threat?

The challenges of dealing with many moving parts and defining amorphous risks are still relevant in business today (albeit in a less life-threatening context). For pharmaceutical companies in the United States, some of their biggest customers—state governments—are among the most powerful and complex any industry could face. They have multiple roles, from buyer to regulator to legislator. And each of the 50 states is organized and operated differently, which means that pharma companies’ strategies must be tailored accordingly.