Health care and pharmaceuticals consultants are hired by medical and pharmaceutical businesses to help them manage their businesses better. Health care consultants review the organization's business structure, its financial records, and its services, and then make recommendations for steps the organization can take for improvements, such as streamlining or having more specialized staff for greater efficiency. Pharmaceutical consultants work with companies that are in the pharmaceutical, biotechnology, or consumer health business. They help these companies with finding new customers and increasing their sales. Health care and pharmaceutical consultants are also responsible for ensuring that their clients' business practices and services are in compliance with current regulations and laws.
The health care consulting industry is a more than $6 billion industry, with more than 18,100 businesses that employ more than 27,612 people, according to the research group IBISWorld. The health care consulting companies with the largest market share in the industry are Accenture PLC, Deloitte Touche Tohmatsu LLC, United Healthcare, Huron Consulting Group Inc., and PricewaterhouseCoopers.
The pharmaceutical contract management consulting industry brought in more than $12 billion in revenue in 2018, with about 7,843 businesses and 58,482 employees. The pharmaceuticals industry is having particularly strong growth in recent years due to what’s known as the “patent cliff,” which is when the patents for major, well-known drugs are about to expire, allowing for companies to replicate these drugs and sell them for cheaper prices. This has generated a great deal of research and development work for biotechnology companies and generic pharmaceutical companies. As of December 2019, the pharmaceutical contract management company with the largest market share was IQVIA Holdings Inc.
The healthcare and pharmaceuticals consulting industry has origins in both the business management consulting and healthcare worlds. The healthcare industry started to formalize in the late 1800s, with the growth of hospitals, medical breakthroughs, and the establishment of education programs for various healthcare professions. Business consulting has roots dating back to the late 1800s and early 1900s, due to the Industrial Revolution and the high demand at that time for advisors on production and management operations. Early consultants and consulting firms included Arthur D. Little, Ivy Ledbetter Lee, and McKinsey & Company, founded by James McKinsey. In contemporary times, Bain & Company, founded in 1973, has grown to become among the top management consulting companies, working in healthcare, pharmaceuticals, and medical technologies.
Legislation that has impacted the healthcare and pharmaceuticals industry includes the Sarbanes-Oxley (SOX) Act, which was passed in 2002, and the Patient Protection and Affordable Care Act (PPACA), which was enacted in 2010. The SOX Act was introduced to crack down on fraudulent activities by corporations, creating greater transparency in corporate accounting practices to protect investors. Healthcare professionals must have internal procedures, controls, reports, etc., that comply with the SOX Act. The PPACA has made healthcare insurance more affordable and accessible to more people. Millions of people have since been able to have medical exams, treatments and prescriptions, and procedures, which has only added to the need for the expertise of healthcare and pharmaceuticals consultants.