Pharmaceutical pricing is extremely complex, given the varying regulatory and competitive environments found across the globe. In particular, reference pricing schemes in Europe (and increasingly elsewhere) mean that price-setting cannot be contained nationally, but must be managed "top down". This is particularly important during launches.
Our consultants have on several occasions developed global pricing simulation and forecasting models incorporating:
- Detailed reference pricing rules
- Dynamic parallel trading assumptions
- Launch sequence optimizers
The tools are typically built in Excel, adding an intuitive user interface layer (graphical output and custom menus) on top of the well-known spreadsheet functionality. When applicable, the tool is built with an interface to existing IT (e.g. proprietary pricing databases).
Clients are able to:
- Produce and manage consistent price forecasts for all markets
- Assess the global impact of local price changes
- Explore pricing scenarios
- Optimize product launches
It is not uncommon in these kinds of analyses to find that two seemingly similar options differ by tens of millions of euros in NPV.
Graphical representation of reference pricing rules for the 60 most important markets and a given therapeutic area. Each arrow indicates an impact of the price in one country on the price in another country.
Example output showing launch and price developments for key markets in Europe – enables visual comparison of scenarios.
Example custom menu for pharma pricing tool.