There is a Russian proverb that tells of two fools in every market, one whose price is too low and one whose price is too high. Regrettably, there is no mention of a third player whose price is just right, perhaps for good reason. But if we think about the challenges of establishing an optimal pricing strategy for an innovative medicine or health technology, it is hard to see how we could get to the “right price”.
To do so, we need to aim for one price that meets the expectations of all relevant stakeholders – national governments, insurance companies, providers, physicians, patients, industry, investors et al.
Pricing that’s all things to all people – is it attainable?
In many markets, national, regional and/or local payer organizations dominate the market access process, while the influence of prescribers on both access and uptake has been significantly eroded. Industry has learned to engage with payers to understand not simply what they are willing to pay for a new technology but how they will come to that decision – against what comparator, and in which patient population, as well as how any incremental benefits are likely to be valued.
A pricing and market access strategy based solely on the prescriber and payer perspectives risks significantly undervaluing the pharmaceutical or health technologies in question. We believe that an optimal pricing and market access strategy has to build on a solid understanding of all relevant stakeholder groups.
Clearly, the starting point with any pricing research is to gain an understanding of the views of these stakeholders on:
- current standard of care and level of unmet need
- likely clinical, HTA and pricing comparators
- potential or actual incremental clinical (and non-clinical) value that the new medicine or technology can deliver
- patient and funding flow
- key budget holders and decision makers
- willingness to pay and/or co-pay
Never have so many strategies been used to explore so many drivers for just one definitive pricing solution
As we progress to more formal pricing research, especially with third–party payers, it is important to use a range of strategies to explore value drivers, price and potential patient access scenarios.
We favor a multilayered approach to qualitative payer research that explores:
Although physicians’ ability to directly influence initial pricing or access decisions may be limited, their role in determining uptake of “listed” products remains and is a key factor in demand assessment and forecasting.
With experience gained in both the prescription and consumer health markets to develop evidence-based pricing, demand assessment and forecasting tools, we have been able to guide our clients to make informed decisions on pricing and market access strategies against so many odds.
Tim Fitzgerald is the Managing Director of Market Access at GfK. Please email email@example.com or leave a comment below to share your thoughts.
Most Recent Posts
- Demystifying quantitative methods: Three easy steps to drive your pharmaceutical pricing strategy
- Putting payers in the spotlight: Shifting the market access mindset to focus on shaping payer attitudes
- The rise of patient-centricity, clinicians seeking knowledge – the role of the internet
- How consumer research innovations can help boost health intelligence
- Dispatches from eyeforpharma: Digitizing patient and professional engagement