MGT 103

MGT 103 - Michael
Pollock
...

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Unformatted text preview: Michael
Pollock
 Reynolds
Pollock
&
Associates
 [email protected] REYNOLDS POLLOCK & ASSOCIATES EXPERIENCE | INSIGHT | STRATEGY •  •  •  •  •  Back
to
marke:ng
basics
 Pharmaceu:cal
pricing
 Price,
Value
and
Affordability
 Pharmaceu:cal
pricing
process
 Discussion
 REYNOLDS POLLOCK & ASSOCIATES EXPERIENCE | INSIGHT | STRATEGY •  •  •  •  Product

 Place
 Promo:on
 Price
 REYNOLDS POLLOCK & ASSOCIATES EXPERIENCE | INSIGHT | STRATEGY •  Product
–
minimal
degrees
of
freedom
 –  Defined
by
the
results
of
pre‐clinical
and
clinical
research
 –  Ability
to
re‐define
the
product
depends
on
further
research
 •  Place
–
minimal
degrees
of
freedom
 –  With
the
cost
of
pharmaceu:cal
development
marke:ng
in
all
 developed
countries
is
essen:al
 –  Distribu:on
channels
in
developed
countries
are
highly
 regulated
 •  Promo:on
–
minimal
degrees
of
freedom
 –  Highly
regulated
and
becoming
more
so
 •  Price
–
some
degrees
of
freedom
 –  Flexibility
in
price/volume
agreements
 –  Downward
movement
is
always
an
op:on
 REYNOLDS POLLOCK & ASSOCIATES EXPERIENCE | INSIGHT | STRATEGY = Total Revenue X Unit Price No. of Units Constrained by: indication; number of patients; comparative efficacy and safety; guidelines; competitive activity; etc. REYNOLDS POLLOCK & ASSOCIATES EXPERIENCE | INSIGHT | STRATEGY Report constructed in two phases: Phase One: •  >100 Life Sciences industry commentators •  11 life science industry sectors •  20 academic disciplines •  Asked about the risks facing the leading global firms in their sector Phase Two: •  Panels for each sector made up of CEOs, strategic planners, analysts, journalists •  Panels asked to rank top 10 risks for each sector REYNOLDS POLLOCK & ASSOCIATES EXPERIENCE | INSIGHT | STRATEGY 6
 #1
 #9
 REYNOLDS POLLOCK & ASSOCIATES EXPERIENCE | INSIGHT | STRATEGY Objec:ves
of
the
Pricing
Department
or
 Func:on:
 –  Maximize
revenue
 •  Maximize
global
price
/
price
per
region
 •  Maximize
sales
volume
(reimbursement/u:liza:on)
 •  Minimize
parallel
importa:on
 –  Support
product
posi:oning
and
value
story
 –  Achieve
internal
financial
hurdles
for
RoI
 –  Minimize
nega:ve
press
 REYNOLDS POLLOCK & ASSOCIATES EXPERIENCE | INSIGHT | STRATEGY External
Environment
 Product
Characteris8cs
 Price
 Market
Characteris8cs
 Internal
Requirements
 REYNOLDS POLLOCK & ASSOCIATES EXPERIENCE | INSIGHT | STRATEGY Price
 External
Environment
 •  Government
Pricing
Regula:ons
 •  Reimbursement
Regula:ons
/
 Requirements
 •  Reimbursement
System
 •  Strength
of
the
economy
 •  Exchange
rates
/
PPP
 •  Parallel
importa:on
 •  Public
percep:ons
 REYNOLDS POLLOCK & ASSOCIATES EXPERIENCE | INSIGHT | STRATEGY Price
 Internal
Requirements
 •  Financial
Hurdles
–
internal
rates
of
 return
 •  Financial
strength
and
outlook
of
the
 company
 •  Business/management
philosophy
 REYNOLDS POLLOCK & ASSOCIATES EXPERIENCE | INSIGHT | STRATEGY Price
 Product
Characteris8cs
 •  Target
Product
Profile
–
degree
of
benefit
and

 value
over
standard
of
care
 •  Indica:on
&
target
popula:on
(orphan
drug?)
 •  Burden
of
Illness
 •  Chronic
or
Acute
treatment
 •  Add‐on
or
replacement
therapy
 •  Route
of
Administra:on
 •  Patent
exclusivity
 REYNOLDS POLLOCK & ASSOCIATES EXPERIENCE | INSIGHT | STRATEGY Price
 Market
Characteris8cs
 •  Price
point
of
market
leader
or
 standard
of
care
(SOC)
 •  Level
of
unmet
medical
need
 •  Number
of
compe:tors
/
level
of
 compe::on
 •  Product
posi:on
rela:ve
to
market
 leader
/
SOC
 •  Patent
exclusivity
of
market
leader
 REYNOLDS POLLOCK & ASSOCIATES EXPERIENCE | INSIGHT | STRATEGY Price
 External
Environment
 •  Government
Pricing
Regula:ons
 •  Reimbursement
Regula:ons
/
 Requirements
 •  Reimbursement
System
 •  Strength
of
the
economy
 •  Exchange
rates
/
PPP
 •  Parallel
importa:on
 •  Public
percep:ons
 REYNOLDS POLLOCK & ASSOCIATES EXPERIENCE | INSIGHT | STRATEGY Constrained healthcare budgets €
 Increasing healthcare
costs REYNOLDS POLLOCK & ASSOCIATES EXPERIENCE | INSIGHT | STRATEGY REYNOLDS POLLOCK & ASSOCIATES 2024
 2022
 2020
 2018
 2016
 2014
 2012
 2010
 2008
 2006
 2004
 2002
 2000
 1998
 1996
 1994
 1992
 1990
 1988
 1986
 1984
 1982
 1980
 1978
 1976
 1974
 1972
 1970
 1968
 1966
 1964
 1962
 1960
 % of GDP 20.0
 15.0
 10.0
 5.0
 0.0
 Source: CMS, Office of the Actuary, National Health Statistics Group. Na8onal
Health
Expenditures
as
a
Share
of
 
 Gross
Domes8c
Product
(GDP)
to
2008 
 25.0
 Projection EXPERIENCE | INSIGHT | STRATEGY The number of people Medicare serves will nearly double by 2030. Disabled & ESRD Elderly 76.8 Medicare Enrollment (millions) 80 8.6 70 61.0* 60 8.7 45.9 50 39.6* 30 28.4* 20.4 20.4 5.4 68.2 3.3 3.0 20 10 7.3 34.3 40 25.5 52.2 31.0 34.1 38.6 0 1970 1980 1990 2000 Calendar Year 2010 2020 2030 * Numbers may not sum due to rounding. Source: CMS, Office of the Actuary. REYNOLDS POLLOCK & ASSOCIATES EXPERIENCE | INSIGHT | STRATEGY Projection $5,000,000
 15.00%
 Millions $4,000,000
 $3,500,000
 10.00%
 $3,000,000
 $2,500,000
 $2,000,000
 5.00%
 $1,500,000
 $1,000,000
 $500,000
 $0
 % of Total Health Expenditure $4,500,000
 0.00%
 1982
 1987
 1992
 1997
 Health
Expenditures
 2002
 2007
 2012
 2017
 Prescrip8on
Drugs
 Source: CMS, Office of the Actuary, National Health Statistics Group. REYNOLDS POLLOCK & ASSOCIATES EXPERIENCE | INSIGHT | STRATEGY •  Demographic
shifs
–
growing
propor:on
 of
older
people
 •  Higher
cost
of
healthcare
 •  Greater
intensity
of
medical
treatment
 •  Higher
cost
of
new
technology
 •  More
people
living
with
chronic
diseases
 
 REYNOLDS POLLOCK & ASSOCIATES EXPERIENCE | INSIGHT | STRATEGY REYNOLDS POLLOCK & ASSOCIATES EXPERIENCE | INSIGHT | STRATEGY Purchasing
power
pari8es
(PPPs)
are
the
rates
 of
currency
conversion
that
eliminate
the
 differences
in
price
levels
between
countries.
 For
example,
consider
a
laptop
computer
that
costs
€1,500
in
 Germany
and
an
exchange
rate
of
€2

to
US$1.
If
the
same
laptop
 cost
$1,000
in
the
U.S.,
U.S.
consumers
would
buy
the
laptop
in
 Germany.

If
done
on
a
large
scale,
the
influx
of
US
dollars
would
 drive
up
the
price
of
the
Euro,
un:l
it
equalized
at
€1.5
to
US$1
‐
 the
same
ra:o
of
the
price
of
the
laptop
in
Germany
to
the
price
 of
the
laptop
in
the
U.S.
*

 * Thanks to Wikipedia REYNOLDS POLLOCK & ASSOCIATES EXPERIENCE | INSIGHT | STRATEGY The
PPP
theory
only
applies
to
tradable
goods,
not
to
immobile
goods
 or
local
services.
The
theory
also
discounts
several
real
world
factors,
 such
as
transporta:on
costs,
tariffs
and
transac:on
costs.
It
also
 assumes
there
are
compe::ve
markets
for
the
goods
and
services
in both
countries.*
 For
example,
housing
prices
can
vary
greatly
in
adjoining
 neighborhoods;
prices
of
services
can
vary
greatly
in
nearby
loca:ons
 (some:mes
in
step
with
house
prices).
 PPP
is
assessed
using
a
“basket
of
goods”
that
can
be
purchased
in
all
 countries.
The
PPP
exchange‐rate
calcula:on
is
controversial
because
 of
the
difficul:es
of
finding
comparable
baskets
of
goods
to
compare
 purchasing
power
across
countries.

 * Thanks to Wikipedia REYNOLDS POLLOCK & ASSOCIATES EXPERIENCE | INSIGHT | STRATEGY PPP
‐
November
2009
 140
 120
 100
 80
 60
 40
 20
 0
 http://www.oecd.org/dataoecd/48/18/18598721.pdf REYNOLDS POLLOCK & ASSOCIATES EXPERIENCE | INSIGHT | STRATEGY The Big Mac index is based on the theory of purchasing-power parity (PPP)—exchange rates should equalise the price of a basket of goods in different countries. The exchange rate that leaves a Big Mac costing the same in dollars everywhere is our fair-value benchmark. So our light-hearted index shows which countries the foreign-exchange market has blessed with a cheap currency, and which has it burdened with a dear one. http://www.economist.com/daily/chartgallery/displaystory.cfm?story_id=15210330 REYNOLDS POLLOCK & ASSOCIATES EXPERIENCE | INSIGHT | STRATEGY The currencies listed below are compared to the US Dollar. A green bar indicated that the local currency is overvalued by the percentage figure shown on the axis; the currency is thus expected to depreciate against the US Dollar in the long run. A red bar indicates undervaluation of the local currency; the currency is thus expected to appreciate against the US Dollar in the long run. REYNOLDS POLLOCK & ASSOCIATES EXPERIENCE | INSIGHT | STRATEGY http://www.haiweb.org REYNOLDS POLLOCK & ASSOCIATES EXPERIENCE | INSIGHT | STRATEGY REYNOLDS POLLOCK & ASSOCIATES http://www.haiweb.org/medicineprices/pdf/originator_brand_products_all%20countries.pdf EXPERIENCE | INSIGHT | STRATEGY Price
Varies
by
Markets'
Ability/Willingness
to
Pay
 250
 Price
 200
 150
 100
 50
 0
 A
 B
 C
 D
 E
 F
 G
 I
 Country/Region
 Using PPP to help determine the optimal price for each country/region, but this may encourage parallel importation REYNOLDS POLLOCK & ASSOCIATES EXPERIENCE | INSIGHT | STRATEGY “Parallel
impor:ng
…
occurs
when
a
product
 placed
on
the
market
in
one
country
is
bought
 by
an
intermediary
who
exports
it
to
a
second
 country.

For
parallel
trade
to
exist,
profits
for
 the
trader
have
to
be
sufficiently
large
to
be
 aqrac:ve
–
this
occurs
where
there
are
 significant
price
differences
between
countries.”
 ABPI Report on Parallel Trade in Medicines, March 2006 REYNOLDS POLLOCK & ASSOCIATES EXPERIENCE | INSIGHT | STRATEGY “ The
medicines
market
operates
on
a
different
 basis
from
most
other
compe::ve
markets.
 Instead
of
prices
being
set
by
pharmaceu:cal
 companies,
individual
governments
ofen
 determine
them.
Most
EU
countries
control
 pricing
but
the
ways
in
which
they
control
them
 result
in
wide
varia:ons.
Currency
fluctua:ons
 also
contribute
to
this.”
 ABPI Report on Parallel Trade in Medicines, March 2006 REYNOLDS POLLOCK & ASSOCIATES EXPERIENCE | INSIGHT | STRATEGY •  The
UK
pharmaceu:cal
market
is
one
of
the
most
affected
by
 parallel
importa:on
–
due
largely
to
the
pricing
differen:als
 and
the
EU
regula:ons
on
free
movement
of
goods
 •  Up
to
70%
of
EU
parallel
importa:on
is
into
the
UK
and
it
has
 been
es:mated
that
almost
1
in
5
prescrip:ons
is
filled
with
a
 parallel
import
 •  This
can
have
a
significant
impact
on
company
profitability,
 sales
performance
evalua:on
and
company
morale
 •  There
is
some
parallel
importa:on
of
pharmaceu:cal
 products
into
the
US,
but
regula:ons
limit
the
amount
 REYNOLDS POLLOCK & ASSOCIATES EXPERIENCE | INSIGHT | STRATEGY •  Parallel
importa:on
may
be
minimized
by
a
number
of
 factors:
 •  Regula:ons
–
where
trade
or
product
approval
regula:ons
 prohibit
or
limit
the
importa:on
of
finished
pharmaceu:cals,
 due
to:
 –  IP
regula:ons
 –  Manufacturing
quality
regula:ons
 –  Product
iden:fica:on
and
labeling
regula:ons
 •  •  •  •  Limits
on
supply
to
a
parallel
expor:ng
country
 Poli:cal
pressure
on
parallel
expor:ng
country
 Trade
associa:on
pressure
on
parallel
expor:ng
country
 Tighter
pricing
bands


 REYNOLDS POLLOCK & ASSOCIATES EXPERIENCE | INSIGHT | STRATEGY Launch
Price
Constrained
by
"Price
Bands"
 250
 Opportunity Cost Price
 200
 150
 120
 100
 
80
 50
 0
 A
 B
 C
 D
 E
 F
 G
 I
 Country/Region
 Ideal
Price
 REYNOLDS POLLOCK & ASSOCIATES Launch
Price
 Potential Reimbursement Issue EXPERIENCE | INSIGHT | STRATEGY Maximum
Price
America
 Global
Maximum
Price
 Maximum
Price
Europe
 Maximum
Price
Asia
 Minimum
Price
America
 Minimum
Price
Europe
 Global
Minimum
Price
 Minimum
Price
Asia
 European
Countries
 American
Countries
 Asian
Countries
 
Op:mal
Solu:on: 
1.)
Differen:ate
prices
as
much
as
possible
 
 
 
 
 
 
 
2.)
Harmonize
prices
as
much
as
necessary
 
3.)
Define
target
price
for
major
countries
 Source:
Simon
∙
Kucher
&
Partners
 REYNOLDS POLLOCK & ASSOCIATES EXPERIENCE | INSIGHT | STRATEGY •  A
Global
Price
Corridor
or
Band
will
work
for
 introductory
prices
 •  Due
to
price
ceilings
and
limita:ons
on
price
 increases,
prices
may
fall
out
of
the
“Corridor”
 because
of
currency
fluctua:ons
 •  Also,
required
price
reduc:ons,
and
post‐ launch
price
increases
(in
a
limited
group
of
 countries)
will
move
products
out
of
the
 “Corridor”

 REYNOLDS POLLOCK & ASSOCIATES EXPERIENCE | INSIGHT | STRATEGY 2.50
 2.00
 2.00
 1.83
 1.84
 1.82
 1.84
 +22% 1.63
 1.50
 1.51
 1.44
 1.50
 1.37
 1.24
 1.24
 1.46
 1.25
 1.13
 1.00
 0.92
 0.89
 0.94
 0.50
 0.00
 2000
 2001
 2002
 2003
 US
 REYNOLDS POLLOCK & ASSOCIATES 2004
 UK
 2005
 2006
 2007
 2008
 Euro
 EXPERIENCE | INSIGHT | STRATEGY +58% •  External
price
referencing
is
widespread,
especially
 across
EU
 –  Not
UK,
DE,
DK,
SE
 –  May
use
average,
%
of
average,
lowest
in
basket,
etc.
 •  External
price
referencing
looks
at
exchange
rate
 conversions,
not
PPP
 •  External
price
referencing
is
an
important
input
to
 pharmaceu:cal
launch
sequence
strategy

 •  External
price
referencing
creates
:ghter
pricing
 bands
and
may
contribute
to
reduc:ons
in
parallel
 importa:on
 REYNOLDS POLLOCK & ASSOCIATES EXPERIENCE | INSIGHT | STRATEGY Ireland links its drug price by formula to those of nine other EU Member States Finland Netherlands Britain Denmark Germany Belgium France Spain Austria http://ppri.oebig.at/Downloads/Publications/PPRI_Report_final.pdf REYNOLDS POLLOCK & ASSOCIATES EXPERIENCE | INSIGHT | STRATEGY Decision‐
 maker
 REYNOLDS POLLOCK & ASSOCIATES Payer
 Consumer
 EXPERIENCE | INSIGHT | STRATEGY Payer Decision-maker REYNOLDS POLLOCK & ASSOCIATES Consumer EXPERIENCE | INSIGHT | STRATEGY Decision‐
 maker
 Consumer
 Payer
 Shift from the Individual customer to the Institutional customer, and from the traditional decision-maker (physician) to the consumer (patient) REYNOLDS POLLOCK & ASSOCIATES EXPERIENCE | INSIGHT | STRATEGY Price
 Product
Characteris8cs
 •  Target
Product
Profile
–
degree
of
benefit
and

 value
over
standard
of
care
 •  Indica:on
&
target
popula:on
(orphan
drug?)
 •  Burden
of
Illness
 •  Chronic
or
Acute
treatment
 •  Add‐on
or
replacement
therapy
 •  Route
of
Administra:on
 •  Patent
exclusivity
 REYNOLDS POLLOCK & ASSOCIATES EXPERIENCE | INSIGHT | STRATEGY = Total Revenue X Unit Price No. of Units Value and Affordability REYNOLDS POLLOCK & ASSOCIATES EXPERIENCE | INSIGHT | STRATEGY Value-based price $ Quality of Care Quality of Life Cost offsets Safety Efficacy Comparator (SOC) price REYNOLDS POLLOCK & ASSOCIATES EXPERIENCE | INSIGHT | STRATEGY X X WiFi Streaming Menu Remote Sound Std Def Model Price Score LG 50PK750 1050 82 Samsung 50C6500 1200 81 LG 50PK540 780 76 Panasonic P50U2 800 76 Samsung 50C450 700 67 LG 50PJ350 720 67 Insignia 50P650A11 600 63 Sanyo DP50740 650 60 High Def Test Results Ease of Use Internet O O Excellent Very Good Good Fair Poor REYNOLDS POLLOCK & ASSOCIATES EXPERIENCE | INSIGHT | STRATEGY Price
 Score
 $1,400

 100
 90
 $1,200

 80
 $1,000

 70
 60
 $800

 50
 $600

 40
 30
 $400

 20
 $200

 10
 0
 $0

 LG
50PK750
 Samsung
 50C6500
 LG
50PK540
 Panasonic
 P50U2
 REYNOLDS POLLOCK & ASSOCIATES Samsung
 50C450
 LG
50PJ350
 Insignia
 50P650A11
 Sanyo
 DP50740
 EXPERIENCE | INSIGHT | STRATEGY The “Easy No” (More expensive and less effective) Standard of care Change in costs Unattractive The Challenge (More expensive and more effective) Cost per QALY threshold Attractive Change in effects The Dilemma (Less expensive and less effective) REYNOLDS POLLOCK & ASSOCIATES The “Easy Yes” (Less expensive and more effective) EXPERIENCE | INSIGHT | STRATEGY $16.00

 $14.00

 $12.00

 $10.00

 $8.00

 $6.00

 $4.00

 $2.00

 $0.00

 LG
50PK750
 Samsung
 50C6500
 LG
50PK540
 REYNOLDS POLLOCK & ASSOCIATES Panasonic
 P50U2
 Samsung
 50C450
 LG
50PJ350
 Insignia
 50P650A11
 Sanyo
 DP50740
 EXPERIENCE | INSIGHT | STRATEGY 90% confidence limits Trend Line Clinical Value REYNOLDS POLLOCK & ASSOCIATES EXPERIENCE | INSIGHT | STRATEGY Ref.: Easton Associates, LLC Cost per Course of Therapy Overall Cost per Course of Therapy at Launch vs. Clinical Value $1,400

 $1,200

 $1,000

 $800

 $600

 $400

 $200

 $0

 50
 55
 60
 REYNOLDS POLLOCK & ASSOCIATES 65
 70
 75
 80
 EXPERIENCE | INSIGHT | STRATEGY 85
 •  Budget
Impact
Analysis
 •  Cost
Sharing
/
Shifing
 •  Risk
Sharing
 –  Ref.:
I.V.
MS
Drugs
in
the
UK

 –  Velcade
agreement
in
the
UK
 REYNOLDS POLLOCK & ASSOCIATES EXPERIENCE | INSIGHT | STRATEGY •  NICE
originally
rejected
J&J
pe::on
characterizing
Velcade
as
 not
cost
effec:ve
 •  NICE
has
now
modified
its
posi:on:

the
products
is
an
 effec:ve
use
of
NHS
resources
when
the
drug
is
con:nued
 beyond
4
weeks
in
pa:ents
that
have
shown
a
complete
or
 par:al
response
 •  J&J
and
NICE
have
therefore
agreed
to
a
4
cycle
trial
period
 –  If
the
pa:ent
does
not
show
at
least
a
par:al
response
afer
4
cycles
of
 Velcade,
the
NHS
receives
reimbursement
for
the
cost
of
the
drug
 –  If
the
pa:ent
does
respond,
then
he/she
will
be
treated
for
an
addi:onal
8
 weeks,
and
the
NHS
will
pay
for
all
12
weeks
of
treatment
 •  There
is
s:ll
some
discussion
and
disagreement
about
the
 defini:on
of
“respond”
 –  According
to
NICE,
the
standard
was
to
be
>50%
reduc:on
in
serum
M‐protein
 levels
afer
four
weeks
of
treatment
 REYNOLDS POLLOCK & ASSOCIATES EXPERIENCE | INSIGHT | STRATEGY REYNOLDS POLLOCK & ASSOCIATES EXPERIENCE | INSIGHT | STRATEGY •  Global
Marke:ng/New
Product
Development
‐
to
 ensure
alignment
of
pricing
and
product
posi:oning
 objec:ves
 •  Global
Health
Economics
‐to
ensure
pricing
is
 consistent
with
value
and
affordability
assessments
 •  Decision
Support
‐
for
payer/pa:ent/physician
 willingness‐to‐pay
research
 •  Finance
‐
to
ensure
that
pricing
is
in
alignment
with
 internal
rates
of
return
 •  US
Managed
Markets
‐
US
payer
perspec:ve
 •  Interna:onal
‐
Key
markets
and
global
perspec:ve
 REYNOLDS POLLOCK & ASSOCIATES EXPERIENCE | INSIGHT | STRATEGY •  •  •  •  •  •  •  •  Tradi:onal
customer
research
 Degree
of
medical
need
 Degree
of
innova:on
 Compe::ve
prices
 Regula:ons
–
e.g.
pricing
or
reimbursement
 Price
/
volume
analysis
 $/QALY
 Affordability
/
Budget
Impact
 REYNOLDS POLLOCK & ASSOCIATES EXPERIENCE | INSIGHT | STRATEGY •  Pa:ents?
 –  Based
on
their
co‐pay
 –  What
propor:on
don’t
have
co‐insurance?
 •  Providers?
 –  Are
they
really
affected
by
higher
prices?
 –  Some
perverse
incen:ves,
e.g.
oncology
 •  Payers?
 –  Will
they
try
to
“game
the
process”?
 REYNOLDS POLLOCK & ASSOCIATES EXPERIENCE | INSIGHT | STRATEGY •  •  •  •  •  •  Tragedy
of
the
commons
 Price
/
Volume
Agreements
(PVAs)
 Risk
sharing
 Clinical
trial
design
 Health
economics
research
 Modelling
 REYNOLDS POLLOCK & ASSOCIATES EXPERIENCE | INSIGHT | STRATEGY NB – Figure in parenthesis after country name represents the number of molecules assessed in each country * Average Time Delay Between Marketing Authorisation and Market Access, Hospital and Retail Delays Combined - all molecules with marketing authorisation between 1 January 2002 to 31 December 2005; Source: EFPIA / IMS, Patients W A I T Indicator Phase 6 Final Report, February 2007 REYNOLDS POLLOCK & ASSOCIATES EXPERIENCE | INSIGHT | STRATEGY 58
 Importance
of
Time
to
Reimbursement
 % of EU market accessed Source: Analysis from PharmaProjects and EU Member States’ government information – Jim Furniss, April 2007 Best in class 100 Worst performer 75 Revenue gain +38% over 3 year period 50 25 There Is Significant Variation In Time to Reimbursement Achieved by Pharmaceutical Companies in Europe 0 Registration Year 1 Year 2 Year 3 Delay in achieving Reimbursement REYNOLDS POLLOCK & ASSOCIATES EXPERIENCE | INSIGHT | STRATEGY •  Many
factors
need
to
be
taken
into
considera:on
when
 se{ng
the
ini:al
price,
including
the
ability
and
 willingness
to
pay
of
key
markets
 •  Purchasing
Power
Parity
is
a
considera:on
for
price
 determina:on
 •  A
balance
needs
to
be
struck
between
maximal
price,
 product
reimbursement
status
and
parallel
importa:on
 risk
–
op:mal
price
band
 •  Except
in
rare
circumstances
(e.g.,
orphan
diseases),
 pricing
regula:ons
limit
the
introductory
price
of
drugs
 •  Introductory
pricing
is
of
cri:cal
importance
–
there
is
 only
one
chance
to
get
it
right
 REYNOLDS POLLOCK & ASSOCIATES EXPERIENCE | INSIGHT | STRATEGY ?
 ? ? ? ? REYNOLDS POLLOCK & ASSOCIATES ? ? ? ? ? EXPERIENCE | INSIGHT | STRATEGY Michael
Pollock
 Reynolds
Pollock
&
Associates
 [email protected] REYNOLDS POLLOCK & ASSOCIATES EXPERIENCE | INSIGHT | STRATEGY REYNOLDS POLLOCK & ASSOCIATES EXPERIENCE | INSIGHT | STRATEGY •  Quality
Adjusted
Life
Year
–
it
takes
one
year
 of
perfect
health
to
generate
one
QALY
 •  A
year
spent
at
less
than
full
health
will
 generate
a
frac:on
of
a
QALY
 •  The
u:lity
of
that
health
state
(valued
 between
zero
and
1.0)
is
mul:plied
by
the
 amount
of
:me
spent
in
that
health
state
to
 generate
the
QALYs
associated
with
the
health
 state
 REYNOLDS POLLOCK & ASSOCIATES EXPERIENCE | INSIGHT | STRATEGY ...
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This note was uploaded on 12/11/2011 for the course MGT 103 taught by Professor Nelson during the Fall '08 term at UCSD.

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