Global Lifecycle Price Management – A 360 Degree Approach

When launching a new product, companies are often met with a series of challenges. Any error or miscalculation could end up costing your company a significant amount of market share. One of the biggest hurdles to overcome is pricing. Finding a price that is both competitive in the global market, as well as profitable, can be more difficult than companies realize. The key is having access to accurate and current prices of the competition, while at the same time being able to set and maintain effective prices with minimal manual upkeep. Another concern with global lifecycle price management is price erosion with products that have been on the market for a longer period of time.

For example, according to a study by the EPP (European Pricing Platform), 42% of organizations are operating on the most basic level pricing maturity. Approximately 48% are functioning on a higher level, having the right prices on the right products to the right people, but still aren’t fully integrating the commercial process of alignment with marketing and sales. While this second tier is more desirable than the first, it is still far from optimal.

Global lifecycle price management issues can typically be broken down in 3 subcategories.

Product Launch Challenges

These issues can be some of the toughest to deal with when launching a new product. An effective launch starts by determining the best country sequence in which to launch your product, where a mere 1% in price difference can end up costing millions of dollars in net present value, or NPV. Managing all the details and data for launch planning is also critical, especially in knowing the effect they have on pricing. Also, you must take into account the need for change as the project develops, and often times manage this with changing parameters, to keep pace with the project evolution.

Price Maintenance & Compliance Challenges

The next obstacle is maintaining the strength of products that are already on the market. As conditions change, so too must the price on a product. This helps to avoid price erosion, which can cost millions of dollars every year. Here you must also be able to quickly and accurately check reference prices, which is a crucial step in being able to set an effective price in any country. This is a highly effective way to protect your company from any errors in government price publications, as well as to assist in generating accurate reports.

Loss-Of-Exclusivity & Mature Products

When managing older products, the key is to be able to monitor and manage with minimal manual effort and resources. Once a product launch is successful to the point of near self-sufficiency, it’s time to move on to the next project. Having to divert resources to an old project means diverting time and energy away from new ventures, and this can be costly in the long run. Your business must be equipped with the right tools. Software that can efficiently predict the potential impact of price erosion means adjustments can be made before they end up becoming costly issues.

Prevention is Key

What it all comes down to is the proper amount of preparation. By planning ahead and exercising the proper caution and forethought, charting a course to success is easier than one might think.

In the study conducted by the EPP, 88% of organizations declared intention to invest in pricing software for reasons such as, price monitoring, reporting, price guidance and deal making. Alliance Life Sciences specializes in helping life sciences companies operate at peak efficiency with a full suite of global lifecycle price management software designed and developed to aid in managing your business and making sure you hit the right price for maximum profit.

For more information, an on-demand webinar is available on market access operational excellence. http://youtu.be/KEg55rrBfh0

Video Series on Pricing & Market Access Issues in Pharma

Sophie Murdoch, VP of Consulting Services for ALSCG, is featured in a 3-part video series from Health Network Communications on Pricing & Market Access Issues in Pharma. The videos answer key questions that pharma manufacturers are facing today:

  • How are global austerity measures impacting pharma?
  • How can the industry work with payers to ensure that the best treatments get to patients?
  • What developments do you foresee over the next 12 months that will impact pharmaceutical uptake?

Watch the videos below!

Global Pricing Data and Advanced Analytics for Better Decisions and Competitor Edge

This is an excerpt from our whitepaper, “Global Pricing Data and Advanced Analytics for Better Decisions and Competitor Edge”. To read the full paper, please click here.

Increasing price transparency and global competition are key challenges faced by companies across all industries. Today’s pricing decisions cannot be based on instinct or informal methods due to the high level of risk incurred through inaccurate practices.

Analytical pricing strategies are used across all global industries. Strategic decisions based on pricing data and advanced analytics have been long-established and are an integral part of price setting for the financial industry. Benchmarking competitor prices on an hourly basis and ensuring pricing decisions are optimized are practices used by the travel industry. So why not apply the same principles to pharmaceutical pricing? Basing decisions on data and analytics empowers the decision maker and allows full confidence in the choices made.

Data and analytics have become powerful tools for pharmaceutical organizations in their strive to stay ahead of competitors. Best practice shows that better data and analytical models improve decision making and thus provide better business outcomes. Within the pharma industry, data forms the basis of many decisions; clinical data defines whether or not a drug is effective; sales data defines market share; and advanced data models drive cost effectiveness decisions made by health technology authorities.

So how does pricing data play a part in strategic pricing and market access? With so many new innovative pricing schemes and tactics, pharmaceutical competitor price intelligence is crucial in optimizing prices and staying ahead of the competition. The use of data analytics can help move pricing behavior from reactive to proactive decisions based on predicted market conditions.

How can pricing data and analytics be used within pharma?

Test for Competitor Response: Competitors do not evolve in isolation—they are responding to the relevant companies in the industry, if they have the freedom, knowl­edge, and capability to do so. Knowing how the launch of a direct competitor affects the price of your product across markets is essential in knowing how to react.

Business Transformation: Data allows you to visualize what is happening in the outside world and to shape competitor actions. Modeling allows you to make the best use of the data to help predict competitor actions and optimize business strategies. Transforming business decisions based on data and models enables organizations to keep ahead of competitors and make business processes more efficient. This is particularly essential for capturing growth in emerging markets where policy and pricing is not so clear.

To read more, click here to download our whitepaper.

One Week In

Welcome to our ALSCG Blog!

I am very excited to take the helm of Alliance Life Sciences and bring it together with the Adjility Health organization. It’s a privilege to serve both groups of employees, and all our customers.

Collectively, we have a lot to offer. We are solving complex problems across a lot of functions. We are doing great work in pricing, HEOR, contract management, clinical operations, and sales operations. We are introducing new algorithms to help our customers compete on analytics, we are creating some great technology and technology capabilities, and so on.

But what is most important in all of this is that we help our customers innovate in their work, and that we innovate in our own work. And by innovate, I mean real productivity gains and real shifts in ways of doing business. This is the source of real gain, this is how cash flow is freed up for the innovation that really matters: the research that brings new health therapies to market.

How do we show decision makers that a global trial can be executed for 3% – 5% less by optimizing site usage globally? How can a mobile app extend a pharmaceutical product into a service that has greater impact on patient outcomes?

We will spend time talking about how we are driving down the cost of our business and our customer’s business, helping manufacturers service patients and physicians better. Its not just solving a skill shortage or helping our clients with areas that are not core skills for them. Those things are nice – but we have to aim much higher, because the pressure to deliver on the industry has never been greater.

There are a lot of “first things” to get done, but one of the very first things we are doing is to get our leadership team up and active on all forms of social media, including our company blog. We have a very talented group with a lot of things to share.

Sharing these ideas with all of you, engaging in a dialogue with everyone more efficiently, is the first step in this process.

I look forward to what comes next!