The increasing pressure on Healthcare budgets worldwide is placing Pricing on top of most Life Sciences leaders’ agendas: understanding and owning Pricing, and its intrinsic complexity, is indeed becoming a strategic capability in the industry.
This 5 part articles’ series will discuss Pricing Excellence in Life Sciences, and the ways to achieve and implement it in your company.
Payers, providers and Life Sciences companies have long strived to deal with the ever-growing budget pressure autonomously; each trying to place the other on the chopping block. It is only recently that some started implementing innovative cooperation models aimed at solving the issue together (Figure 1).
Figure 1: Stakeholder’s reactions to market trends
Life Sciences companies able to walk on the cooperation stage can gain relevant benefits. On top of the obvious impact on profitability, the following should be considered:
- Improving Corporate image and preventing “Shkreli effects”
- Obtaining faster formulary inclusion and better reimbursement
- Developing innovative offering and business models leveraging on Pricing
- Ensuring long-term business sustainability, limiting price erosion effects
Despite the tempting benefits of Pricing, establishing solid and effective Practices in such field is not a simple task. Complexity mainly stems from the substantial number of external and internal stakeholders impacted by Pricing; on top of that, such complexity increases due to a variety of Country-specific regulations and organizations (Figure 2).
Figure 2: Stakeholders and interactions relevant for Pricing
How can you achieve Pricing Excellence? What are the practical steps towards obtaining it? Click here and read about the first step of the journey – how to establish a corporate pricing practice, in the next part of this articles’ series.
Written by Paolo Correale, a Director at Tefen Italy, and the Head of Pricing at global level