Pharma seeks strong medical and strategic thinking, creativity and innovation, backed by quality delivery from its agency partners. But it also rightly wants value for money and, in a time of increasing financial pressure on pharma, also need to demonstrate cost-efficiency.

Now look at that from the agency perspective where its most significant cost is the people whose expertise it sells. And recognise that as a specialist sector we are desperately short on talent across the board. This means that salary inflation is already high, before being further compounded by the current global economic climate. Consequently, to be able to provide the best people, the agency cost base is going up significantly.

Can and should pharma support the relative fee increases needed to keep everything in equilibrium? If not, how do agencies operate sustainably in that scenario, and what impact does that therefore have for pharma?

The challenge in this scenario – if agencies receive the same money or less for the same work, and if nothing else changes – is that for a sustainable business model, agencies will need to provide more junior teams for project delivery.

This, in turn, has the danger of decreasing quality of work, something nobody in our ecosystem wants or will accept.

Agencies are, of course, acutely aware of these challenges and are already working on sustainable business models. Like pharma they can look to drive efficiencies in their non-salary costs to help compensate. The agency sector also needs to be careful that, in its thirst to retain existing talent and recruit new talent, it is not adding more heat to the challenge of salary inflation.

With significant merger and acquisitions in the agency environment, it is important that consolidation savings are made and that growth and margin expectations remain realistic.

So agencies have much to do, but likewise, for the reasons already mentioned, pharma needs to listen to the challenges facing the agency sector and work together to support and find solutions.

To achieve this, a partner rather than supplier mindset is needed, looking collaboratively at their respective operating models and helping to identify areas where ways of working can be streamlined to the benefit of all.

There are, just for example, areas that instantly come to mind where a focus for fresh approaches would be valuable. The pitch, although with some tweaking around the edges, is still fundamentally the same process as it was when I first joined the industry.  But pitches and the preceding RFIs are often bigger and therefore more resource intensive for all parties.

Initially, perhaps the benefits of agency continuity needs to be emphasised, something very much valued in the consumer sector. Also, when a pitch is appropriate, can processes be standardised across the industry (RFI for example) or are there different pitch methodologies that can provide pharma with the same or better insight into the strengths and abilities of a potential agency partner, but at a lower resource and therefore cost burden for all.

Environmental, Social and Governance (ESG) considerations are now embedded within modern business with additional cost and resource needed in the short term, even if delivering savings in the long term. Pharma rightly expects agency partners to be equally robust in these areas and as a result they face similar financial and resource implications. In our symbiotic relationship, are there ways agencies and pharma can address common ESG goals more collaboratively to reduce the overall burden in delivering them?

AI is certainly a topic of the moment and, I suspect, will continue to be so for some time to come. But although there is no suggestion that it will replace the need for the skills and insight agencies provide pharma, it may help reduce some of the more manual administration elements of agencies such as contact reports or first draft literature searches. When and where AI fits in would seem another appropriate area for discussion.

A strong pharma sector values a strong and sustainable agency sector to partner with. It is surely time we proactively and constructively share our respective challenges and work collectively to ensure our ecosystem remains in great health.

Mike Dixon is CEO of the Healthcare Communications Association (HCA) and a communications consultant