Pricing for pharmaceuticals continues to grow in complexity for the industry due to a variety of factors. A few of the prominent challenges our clients face include:
- Just one chance to get it right. Once a price strategy is in place, course corrections are difficult and sometimes even impossible; for example, price increases in ex-US markets. Not just leaving money on the table is a concern. Also when exceeding a price threshold, a change in price strategy might not even correct payer and prescriber perception and change behavior to the expected extent.
- More competitive markets. Many indications, even in oncology and specialty care, have become crowded market spaces between brand, generic and biosimilar players these days. Standing out in the crowd from a value perspective can be challenging; thus pricing becomes even more important.
- Continuously growing price pressure. Healthcare budgets keep expanding and payers look for savings potential, in particular with drugs. A popular concept is shifting budgetary risk to manufacturers, either based on spend or measured by outcomes. In the US, also patient exposure to cost is a growing market access hurdle.
- Prescriber price sensitivity. Beyond payer influences on utilization, prescribers are more aware than ever of drug prices and more likely to chime in for the discussion in the media. In the US, value frameworks have become an instrument to convey different perspectives of measuring value which payers start to look at when making drug coverage decisions.
To provide robust input for a pricing strategy, three components are key:
- Overall approach of the pricing research to reflect the strategic objectives for your product
Earlier stage and a less complex marketplace suggest a streamlined, quick turnaround approach with an essential sample of payers and a concise N sample with physicians, for example 30 by market, with a focus on direct pricing methods.
Launch strategy and/or highly complex/competitive markets require not just larger samples for payers and physicians (ideally 100/market), but also more sophisticated indirect methods; e.g., DCM and complex market models.
- Pricing methods adequate for the research objectives
Direct methods such as Van Westendorp and Gabor Granger address fundamental price reaction, while indirect methods provide higher precision. For very early development assessments, pure price/value perception can be sufficient, while a more developed profile requires a multi-method approach. Indirect methods such as adaptive conjoint are also the method of choice for a larger number of product concepts to test.
- Integrated findings representing all P&R stakeholders
Critical is an adequate approach to combine product and price-related behavior for payers’ reaction to price, physicians reacting to restrictions, patient response to out-of-pocket costs to derive a resulting price/volume relationship and identify optimal pricing.
We offer a unique profile to support quantitative pricing research
Our team has developed a tried-and-tested pricing approach addressing the specific objectives for your product. We leverage country-level price and market access expertise in the US and globally with an integrated team of experts in healthcare, quantitative methods and primary research. Moreover, our project approach is direct and efficient in close contact with your project team.
Through our quantitative pricing approach, we provide the most in-depth understanding of the pricing and reimbursement opportunity of your product.
Meet with us at ISPOR!
Our team of market access experts will be at ISPOR in Glasgow, November 4 to 8 in booth #207 and would welcome a discussion around our quantitative pricing approach and how it can generate optimal output for your pricing strategy!
Michael Kuehn is a Vice President of Market Access at GfK. Please email Michael.Kuehn@gfk.com or leave a comment below to share your thoughts.