Cutting Edge Information Study Finds Pharma Pricing Research Being Conducted Earlier

Main Category: Pharma Industry / Biotech Industry
Article Date: 26 Sep 2008 - 3:00 PDT

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Pharmaceutical and biotech companies conduct pricing research much earlier in drug development than they once did. The new study, "Outcomes-Based Pharmaceutical Pricing: Meeting Stakeholder Needs," published by competitive intelligence firm Cutting Edge Information, finds that 56% of companies begin pricing-focused market research before Phase III of product development (http://www.pharmapricingstrategy.com).

Whereas 35% of surveyed companies initiate pricing research efforts during Phase IIIa or Phase IIIb, 32% begin during Phase II. Meanwhile, 24% kick off pricing research during Phase I or during Pre-Clinical development. Another 9% wait until registration and launch to do so.

According to the study, third party payers, government entities and independent watchdog groups have all amplified their requests for specific efficacy, cost efficiency and health outcomes data -- these groups want to see a compelling value story that dates back to the formative stages of clinical development. In response to such demands, life sciences companies have begun to quantify and to meet desired clinical endpoints earlier than ever before.

"Market research campaigns that were once a thing of Phase III are now taking place during Phase II, and even earlier in some cases," said Haley Wynn, lead author of the study. "These companies want to get to know their primary customers as well as possible, as soon as possible, in order to make informed pricing decisions."

The 124-page report provides an in-depth analysis of pharmaceutical pricing planning, processes, decision making and resources. Based on these findings and surveyed companies' best practices, CEI analysts offer action points to guide companies to set the right prices and optimize their profits.

The report contains 400+ metrics. Data focus on pricing teams' structures; phase-by-phase pricing processes and methodology; and spending and staffing resources.

Metrics include the following:

-- Resource support, innovative versus me-too drugs
-- Cross-functional involvement in pricing decisions
-- Share of companies with dedicated pricing departments
-- Lifecycle entry and exit points for functions involved in the pricing process
-- 2008 pricing budgets and headcounts, by company size
-- 2008 headcounts broken down by geographic market and by company size

Cutting Edge Information