Life Sciences – A Journey to Pricing Excellence, Part 3

February 28, 2018 - 3 minutes read
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In the previous part of this articles’ series we’ve discussed the way to establish a corporate pricing practice. But after establishing it, how can you integrate the pricing practice in your company?


Establishing the backbone may not be sufficient if Pricing practices are not integrated with a variety of other commercial practices. In the present part, we describe some examples of what this pragmatically means (Figure 7); examples are naturally not exhaustive, as they tend to vary according to each company and business peculiarities. Examples of Pricing Practices applied to Tefen’s Commercial Excellence Wheel ™

Figure 7: Examples of Pricing Practices applied to Tefen’s Commercial Excellence Wheel ™


Value-based pricing is a key methodology in new product launch, as it allows to translate outcomes.



International Reference Pricing (IRP) and parallel trade mechanism are key market factors to be monitored. Life Sciences companies need to facilitate Pricing Practice collaboration with regulatory / compliance structures, as well as with distribution and supply chain organizations.


Different accounts (including GPOs) and distribution channel actors perceive value differently, impact the company’s business differently and therefore demand for different Pricing strategies. Pricing segmentation should therefore be aligned with the overall commercial segmentation.


Proper Pricing-by-segment strategies cannot be fully realized if not supported by effective stakeholder management actions, such as pre-tender influencing (e.g. SoW allowing to quote according to pricing strategy) and channel negotiation (e.g. structuring and managing the interface map for negotiation).


Monitoring and reviewing Pricing performance (e.g. as part of sales productivity measures or periodic business reviews) not only creates accountability and improvement opportunities, but also allows companies to make informed decisions on how to update Pricing strategies.


Competitive pricing intelligence enables wiser pricing strategies. Companies should therefore leverage their Sales Force to gain competitor’s information, establishing simple processes and data collection tools and integrating them in the Sales Force’s usual market feedback activities.

9_8Including pricing / margin indicators in the Sales Force incentive schemes, up to Sales Rep level ensures continuous and widespread focus on pricing execution. Mechanisms to monitor and review price performance are a key enabler for such incentive schemes.

The ultimate goal of this step is to nurture a Company’s Pricing Culture: pricing implications should be intuitively observed across commercial practices and have a key role in decision-making.


In the next part of this articles’ series we will discuss the way in which your company can turn Pricing to a competitive advantage.

Written by Paolo Correale, a Director at Tefen Italy, and the Head of Pricing at global level

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