History is littered with examples of industry transformation that has left iconic companies in the dust. Kodak, Blockbuster Video, Borders Books and many others underscore how the failure to innovate and anticipate changing market conditions can lead to corporate demise.

But what happens when goods and services are priced beyond the reach of the average person? Pandemic-fueled unemployment and inflation, and looming electricity, food and water shortages caused by climate emergencies, have provided an unsettling reminder that the basic things many people depend on to live can become unaffordable.

For most Americans and their employers, however, one of the single greatest threats to prosperity – even survival – is the uncontrolled cost of healthcare. In the past 20 years, the cost of the average family insurance premium has increased twice as fast each year as the annual rate of wage growth. In real terms, the average American family in 2002 paid $7,954 for health insurance but saw that figure skyrocket to $22,463 last year. Within a couple of decades, the cost to insure a family could be three to four times higher if nothing changes.

To put perspective to that calculation, assuming wage growth remains the same, it will require one parent to work full time just to cover the cost of protecting their family’s health. For many American households, this already is the case. Left unchecked, healthcare costs will significantly constrain economic growth as employers pass on costs to consumers and curtail investments, while governments at every level see a decrease in tax revenues that would fund a range of essential programs.

This bleak outlook should force a reckoning for the global pharmaceutical industry. While health companies must remain profitable to continue to fuel innovation, maintaining business as usual cannot come at the expense of the very customers who depend on functional healthcare to prosper. Such a conundrum poses a unique opportunity for pharma companies to live up to the credo of truly putting patients first by redefining how they lead on areas that are fundamental to strengthening health access and affordability for the long term. Among the many ways to achieve this outcome, some areas stand out:

Fostering greater cross-industry collaboration

Contrary to the views of some policymakers, the solution to averting the worst-case scenario of pricing most Americans out of affordable healthcare is not to increase competition. A better path may be to create greater incentives for collaboration between industry peers and government agencies through all stages of the value chain, from early discovery through manufacturing to patient administration.

The Covid-19 pandemic illustrated how collaboration can deliver speed and scale during an emergency. But despite the active involvement of the National Institutes of Health (NIH) in sponsoring early research for the most successful vaccine candidates and heavy government intervention to waive or reduce the costs of vaccination in many countries, the success of intra-industry collaboration has been muted by headlines of windfall profits from vaccine sales.

While many pharmaceutical and biotechnology companies already participate in the NIH’s Accelerating Medicines Partnership (AMP), more can be done to use this program as a launch pad for cooperation among industry leaders. With greater funding for the AMP and a commitment by participating companies to leverage the partnership to deliver cost-effective therapeutics, we could see a groundswell of pioneering products that provide lifesaving benefits without bankrupting patients. Such a push would support specific companies in their efforts to strengthen reputation among a variety of audiences.

Using digital tools to deliver increased transparency

From the rapid growth of electronic health records to the increase in clinical trial management solutions, information technology has been fully integrated into nearly every aspect of the pharmaceutical industry. But how can the array of digital tools be used to benefit patients?

As the health industry faces ever greater scrutiny over soaring costs, leading companies could forge a different approach by leveraging the power of their IT and storytelling capabilities to provide patients, advocacy groups and policymakers with important details on the drug delivery process. By bringing R&D to life and engaging patients in the various facets of drug development, companies may be able to spark a new dialog with informed audiences about realistic ways to lower the costs of care and focus on therapeutics with the greatest potential for public benefit without sacrificing the profits that are necessary to support medical breakthroughs.

Achieving health access equity by innovating for all

More than two decades ago, Merck’s CEO at the time, Dr. Roy Vagelos, took the bold step of restricting the company’s drug prices to match inflation. Under his leadership, Merck made efforts to price its drugs according to the economic benefits to patients. Years later, Allergan CEO Brent Saunders announced a social contract to adhere to single-digit percentage increases no more than once a year.

Few would argue that Merck or Allergan set themselves up for failure by staking patient-first positions on cost management and drug pricing. In fact, Merck’s stock price rose 22% annually during the Vagelos years. The moves likely strengthened employee morale and public perception, while serving as reputational insurance for each company against future issues.

These examples – and others – show that there is a middle path to developing innovative products with patient access and affordability at the center. This is the foundation to supporting a level field in healthcare, where patients enjoy equitable care and the health ecosystem becomes more accessible and sustainable.

It’s easy for health leaders to look at the growing crisis and kick the can down the road. That’s the playbook oil companies employed when confronted with clear evidence that their actions were causing global warming and fueling a public health crisis. Alternatively, they can recognize the moral imperative to move quickly and stake out bold pipeline, communications and pricing strategies that put cost sustainability and equitable access to care squarely in the center of everything they do. It’s worked before; it can work again.