The ideal pricing strategy for your medication
How to find the right price using combined approaches
When it comes to high-cost prescription drugs, having an optimal pricing strategy at market entry is a key success factor. But how do you find the right price for your product? In pricing research, Produkt + Markt focuses on a combination of different approaches.
An ideal price enables a smooth market entry, produces the best possible profit, and can additionally be used to set an initial price during negotiations. Lately, pricing has not exactly become any easier under current market conditions. The Act on the Reform of the Market for Medicinal Products (AMNOG), the German Joint Federal Committee (G-BA), etc., as well as ever growing clinic associations and consequently larger purchasing associations are taking their toll.
Pricing research faces a wide variety of different issues under current conditions. Therefore Produkt + Markt does not focus on just ONE method to determine the optimal price. Instead, a combination of the following approaches has proven successful in practice:
- We use the Price Sensitivity Meter (PSM) according to Van Westendorp to determine the width of the price corridor: What is the maximum price accepted? Which price facilitates rapid market penetration? At what price point is a product considered to be so cheap that consumers doubt its quality?
- In order to determine the prescription probability at different price levels we use the Garbor Granger method.
- We apply various visual methods to evaluate appropriate prices in relation to other options, no matter if those prices are known beforehand.
- When it is necessary to consider as many influencing factors as possible in the market (i.e. the emotional relation to the brand and its competition), we fall back on a combination of traditional attribute conjoint analysis and price-brand-conjoint analysis. This subsequently enables us to simulate different scenarios, which in turn may present particular benefits, i.e. if the profile of properties of the new product has not yet been determined, or when measuring the impact of different focal points in communication.
Thorough preparation is essential
Thorough preparation is particularly relevant for pricing studies. Hence we always plan a personal briefing if possible. It should go without saying that we also thoroughly familiarise ourselves with the underlying market conditions beforehand. Furthermore, it is equally important to find a clear as well as commonly used definition of „price“ for the doctors. For this purpose we consult our pool of experts whenever necessary. This way we get a quick and non-bureaucratic impression of how the doctors assess the respective issue.
But even if there’s only little time left or a small budget for your pricing, you won’t have to do without our research expertise. Even under those circumstances we will provide you with competent solutions to all aspects of pricing Research.