SOURCE: Cutting Edge Information

Cutting Edge Information

October 29, 2015 10:35 ET

Life Sciences Companies Use Strategic Pricing to Maximize Product Sales

RESEARCH TRIANGLE PARK, NC--(Marketwired - October 29, 2015) - Life sciences companies use a wide variety of market enhancement strategies to maximize an existing product's profits and reach. According to a study by pharmaceutical intelligence provider Cutting Edge Information, 38% of surveyed companies use strategic pricing at the end of a product's lifecycle to maximize product sales.

By lowering prices, companies make their products available to a wider audience. Toward the end of a product's lifecycle, lower prices also help the company maintain market share in the face of growing generic competition. On some occasions, companies may raise their prices before patent expiration to gain more profit before generics enter the market. Other times, companies need to participate in strategic pricing to obtain payer reimbursement.

"Our survey results indicate that the majority of companies use strategic pricing to focus on faster market introductions," said Natalie DeMasi, senior research analyst at Cutting Edge Information. "Strategic pricing may have helped these companies get reimbursement from payer groups, expediting product launch."

The majority of small/affiliate companies that used strategic pricing had the overarching goal of a faster market introduction. Small companies' products may need to reach the market quickly to make return off of money invested in developing them. In contrast, Top 10 companies typically have more resources and can withstand marginal market share gains longer than small companies without resorting to price cuts.

According to Pharmaceutical Lifecycle Management: Expand and Extend Portfolio Value with a Well-Integrated LCM Strategy, available at, another common goal of strategic pricing is slower market share decline after loss of exclusivity. As already stated, strategic pricing can help companies maintain market share by offering their products at prices close to generics' prices. Similarly, strategic pricing can allow a company to quickly reach peak market share.

With this report, LCM executives will understand how top life science companies:

  • Build a robust LCM strategy by combining market enhancement and line extension tactics
  • Create a dedicated LCM team and cross-functional committee to develop the most effective lifecycle management plans
  • Implement strong leadership to ensure a successful LCM strategy
  • Generate excitement with cost-effective publications strategies
  • Invest in a next-generation drug development to yield a large return

To learn more about Cutting Edge Information and its research report offerings, please visit

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