SOURCE: Cutting Edge Information

Cutting Edge Information

July 20, 2011 09:20 ET

46% of Health Economics and Outcomes Groups Kick Off Pricing Work in Phase II

RESEARCH TRIANGLE PARK, NC--(Marketwire - Jul 20, 2011) - A new study by Cutting Edge Information finds that about half of health economics and outcomes (HEOR) groups begin work on product pricing during Phase II of clinical development -- more than at any other stage.

The new study, "Pharmaceutical Pricing Strategy," examines trends that impact pharmaceutical reimbursement strategies. The study includes timelines for various teams to enter and exit the pricing process. It also provides benchmarking metrics for pharmaceutical and medical device companies' pricing departments.

For most companies, the HEOR department or team provides stakeholders with information about a product's ability to prevent negative, cost-intensive outcomes among patients. This data in turn helps to establish product value. By modeling the budgetary impact of a range of prices, the group helps to target an appropriate final price for the therapy. HEOR also focuses on the impact of that price on patients, such as increased or reduced therapy access.

"HEOR teams are having a growing impact on product performance by providing the economic information and market assessment that make drug launches successful and forge better payer relationships," said Adam Bianchi, chief operating officer at Cutting Edge Information. "HEOR executives often have experience in more scientific and technical disciplines, which is perfect to support new drug pricing initiatives."

Because health economics and pricing activities are often aligned, the two functional groups both begin work relatively early during drug development. The HEOR group's time spent with a product might be short, however. The new study finds that 46 percent of companies withdraw their HEOR teams from the pricing process once a product has launched.

Pricing's elevated role in the drug lifecycle reflects the growing importance of a sound and well-planned pricing strategy. "Pharmaceutical Pricing Strategy: Maximize Revenue in an Evolving Economic Climate" (http://www.cuttingedgeinfo.com/research/market-access/pricing-reimbursement/) explores benchmarks for pricing departments' team structure, staffing and budgets and gives a detailed view of key trends including:

* Growing company and payer experience with risk-sharing agreements
* Government-specific price cuts
* The United Kingdom's move away from NICE's veto authority and toward value-based pricing
* Increasing focus on comparative effectiveness
* Parallel trade/re-importation in both developed and emerging markets

For more information about pricing, reimbursement and market access management, contact Elio Evangelista at +1 919-403-6583.

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    Elio Evangelista
    919-403-6583